U.S. home lenders brace for bad news, legislation (Patrick Rucker)

Created by : Francis Goodwin View profile

By Patrick Rucker

WASHINGTON (Reuters) Dec. 11 -- During the recent U.S. housing boom, mortgage lenders touted so-called exotic mortgages that allowed people to buy houses they could not otherwise afford. Now those lenders are bracing for the not-so-happy story of borrowers like Jesline Jean-Simon.

The Miami woman bought her two-bedroom condo a year ago on a 3 percent adjustable rate mortgage with flexible payments.

When home prices in the city were blasting off two years ago, Jean-Simon was sitting pretty.

But now prices have eased and she works three jobs just to manage a mortgage that has ballooned into interest rates of around 10 percent.