The share of U.S. mortgage originations associated with alternative or non-traditional mortgage products tumbled in early 2008 as the ongoing mortgage credit crisis forced both lenders and borrowers into conventional mortgage financing.
According to numbers compiled by Inside Mortgage Finance, just 9 percent of mortgage originations in the first quarter were interest-only, payment-option ARMs, 40-year balloon loans, or some other type of Alt A mortgage product. This compared with a 30 percent share for all of 2007 and a record high 32 percent share in 2006. The most popular alternative mortgage product in early 2008 was the interest-only ARM and most of these loans were sold to either Fannie Mae or Freddie Mac.
