Federal regulators tried to rein in the mortgage industry Friday, directing banks to better explain to borrowers the risks posed by interest-only and other nontraditional mortgages.

Regulators and consumer advocates worry that consumers don't understand the risks involved in these mortgages, including rising interest rates that could greatly increase their monthly payments.

Aggressive lending has exploded. The Government Accountability Office told Congress last week that from 2003 to 2005, such mortgages rose from less than 10 percent of all mortgages to about 30 percent.

The increase has raised worries about the risks to the financial system should there be a sizable number of defaults, as well as the consequences for Americans who lose their homes.

"Mortgage delinquency rates are rising and foreclosure rates are also beginning to pick up. This could begin to affect the financial health of the banking system," said Mark Zandi, chief economist at Moody's Economy.com.

But the Mortgage Bankers Association said foreclosure rates remained "well with the range of historical norms." The organization criticized the action. "The guidelines propose a one-size-fits-all underwriting standard that will unnecessarily choke industry innovation and diminish consumer choice," said Regina Lowrie, mortgage group chair.

Interest-only mortgages let homeowners pay interest but no principal for some period. Option adjustable rates let homeowners decide how much to pay each month, including amounts that don't even cover the full interest. In both cases, a honeymoon period is followed by higher payments.

The mortgages are appealing to people who don't have the money to pay the full cost of a mortgage. But they are basically a form of gambling. If housing prices drop, their loan could be worth more than their property. And even if housing prices rise, the increased payments can be unaffordable.

Former Federal Reserve Chairman Alan Greenspan issued a number of warnings about these loans last year and other banking regulators have as well. These mortgages were highly concentrated on the East and West Coasts, the GAO said.

The new guidance was issued by the Office of the Comptroller of the Currency, the Federal Reserve, the Federal Deposit Insurance Corp., the Office of Thrift Supervision and the National Credit Union Administration.

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