From a risk-management and capital perspective, institutions should employ stress tests and other  2  BIS Review 7/2006  exercises to help identify CRE vulnerabilities, including potential correlations with non-CRE exposures that might move in the same direction during a downturn. Nontraditional mortgage products The U.S. banking agencies have also issued draft guidance on certain mortgage products.
Over the past few years, the agencies have observed an increase in the volume of originations for residential mortgage loans that allow borrowers to defer repayment of principal and, sometimes, interest.