The financial services watchdog AFM is ‘extremely concerned’ about the number of interest-only mortgages where the borrowed sum exceeds the value of the house, chairman Hans Hoogervoorst says in an interview with the Volkskrant.
Almost half of the mortgages in Holland are interest-only, Hoogervoorst said. Some two-thirds of new mortgages extended over the past few years are for more than the value of the property.
The AFM has been critical of banks for lending too much for some time.
Irresponsible lending to high-risk, low income families in the US is a major cause of the current credit crisis.
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