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During the past several years, interest-only mortgages were re-introduced to enable borrowers to qualify for certain purchases. These mortgages have been criticized as being asymmetrical
During the past several years, interest-only mortgages were re-introduced to enable borrowers to qualify for certain purchases. These mortgages have been criticized as being asymmetrical in risk, as the mortgagor (the borrower) has no incentive to make payments if the value of their property drops materially. Would a standard amortizing mortgage provide a greater incentive to continue making payments? Explain in detail.
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