Want an Interest-Only Loan? No Problem

Some mortgage lenders still haven't cleaned up their act.

Despite the financial-market fallout sparked by subprime mortgages gone bad, several banks continue to offer the types of loans that caused so much trouble in the first place.

At an open house this summer in Brooklyn, N.Y., for example, one could find financing offers from mortgage provider Countrywide Home Loans, a division of Countrywide Financial(CFC Quote). Incidentally, shares of Countrywide have dropped from the low $40s in May to $27.35 on Tuesday.

One document featured a pitch for a Payment Advantage ARM (adjustable-rate mortgage), which showed a monthly expense of $1,962, noted as "minimum payment." Also included in the examples were estimates of monthly costs of interest-only loans, the lowest of which was $2,556, based on a rate of 5.875%. ...