Say the 20% is 50K (a very conservative estimate, based on the median home price), if you are in a 28% bracket, it still amounts to $5,600... I would imagine one has to be in at least a 28% bracket in order to be able to "afford" a $250K home, even on a teaser, interest only loan to begin with.
I personally think those who go into interest only loans have a lot to be blamed themselves too. What did those people thinking that they could always refinance in a lower rate at 2 years down the road? If they could not afford any loan that would at least pay in principal portion over time, they should never buy the homes to begin with. This is just plain common sense. While there is predatory lending practice out there, the borrower needs to take personal financial responsibility as well.
