SACRAMENTO - State lawmakers this week began considering restrictions on unorthodox mortgage-lending practices that have allowed hundreds of thousands of Californians to buy homes they otherwise could not afford.

About half of all new home loans in California are something other than the traditional 30-year fixed loan. They use features such as no money down and variable interest rates, while giving borrowers creative monthly payment options — such as paying only the interest or even less than that.

Such low introductory payments — or teaser rates — are offered in exchange for higher bills that will kick in years later, sometimes tripling or quadrupling monthly payments. Regulators said many of those loans were taken out in 2004 and 2005 and will start resetting to higher rates this year.

“The exposure to these sorts of products, the growth, is unprecedented,” Raphael Bostic, an associate professor at the University of Southern California School of Policy, Planning and Development, told a Senate committee. “The regulatory oversight of these types of practices is relatively lax.”

Such loans have been offered to home buyers with shaky credit or lower incomes. In other cases, middle-income home buyers turned to them as California housing prices soared in recent years. Those buyers used option-payment adjustable loans and interest-only loans to purchase houses they would have difficulty affording using 30-year fixed mortgages.

In September, five federal regulatory agencies issued guidelines calling on federally regulated lenders to better gauge borrowers’ ability to pay before using the non-traditional loans. About a third of such home loans nationwide are non-traditional.

Those guidelines tell lenders to avoid making loans that encourage home buyers to rely on selling or refinancing their homes into more traditional mortgages before they are caught by higher interest rates and monthly payments.

California is considering similar rules for state-regulated lenders, as have 24 other states, said state Sen. Michael Machado, D-Stockton, chairman of the Senate Banking, Finance and Insurance Committee.

California is among states where such lending practices were used aggressively, as housing prices soared beyond most people’s ability to buy.

The median price of a home in California was $474,000 in December, according to San Diego-based DataQuick Information Systems. Nationwide, the median price last year for existing homes was $222,000 and $241,600 for new homes, according to the National Association of Realtors.

About 60 percent of sub-prime loans in California — those given to the highest-risk borrowers — allowed them to pay only the interest or gave them that option on an adjustable rate mortgage, the Federal Deposit Insurance Corporation estimated in a September report.

When the housing market softened last year, it left many borrowers unable to sell or refinance. They are facing the prospect of soaring monthly mortgage payments.

Many of those borrowers are at risk of losing their homes as the market continues to stagnate, witnesses said during Wednesday’s hearing.

About 12.5 percent of riskier mortgages nationwide were delinquent by last fall. Nearly 1 million homeowners nationwide either lost their homes or missed monthly payments from July to September, according to the Mortgage Bankers Association.

“The market did not save them,” testified Pam Canada, executive director of Neighborhood Works Home Ownership Center in Sacramento. “This was a nightmare with no happy ending.”

The trend will worsen, the Center for Responsible Lending predicted in a December report.

The center estimated that nearly 20 percent of those who took out risky mortgages will lose their homes nationwide. In California, more than 21 percent are likely to default, with a foreclosure rate as high as 25 percent in some areas.

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