These nontraditional mortgage product illustrations were developed by the Federal Financial Institutions Examination Council to assist institutions in implementing the consumer information recommendations of the Interagency Guidance on Nontraditional Mortgage Product Risk. Credit unions may utilize these illustrations to provide consumers with information that is designed to help them make informed decisions when selecting and using nontraditional mortgage products.
Exhibit 1- Important Facts About Interest-Only and Payment Option Mortgages. This illustration provides written narrative explaining the features of Interest-Only and Payment Option Mortgages. (English/Spanish)
Exhibit 2- Sample Mortgage Comparison. This mortgage payment table can be used with sample loan amounts to help demonstrate the potential payment shock in Interest-Only and Payment Option ARMs. (English/Spanish)
Exhibit 3- Monthly Payment Options. This illustration can be utilized to demonstrate the potential for negative amortization in Payment Option loans. (English/Spanish)