I live in Georgia and I have looked at the purchase prices and loans amounts for properties comparable to mine in my vicinity (all the recorded documents are available online), and I have been amazed to see how many people do not opt for 30-year, fixed rate loans. They may not qualify for them. In any event, people get all kinds of interest-only, ARM, and piggyback loans. A few of my neighbors even borrowed every penny of their purchase price plus closing costs, and got ARMs to boot. If you are certain you will sell before your payments jump I can see getting riskier financing, but otherwise, why roll the dice and risk foreclosure and ruining your credit rating?
I live in Georgia too, and the problem is exactly these sub-prime, risky mortgages offered in the last few years. Just today I got a come-on letter from a predatory lender who wants to pay off all my debts and leave me with $42,000 cash in hand, and an unbeleivably lower monthly payment. It says no income verification is necessary. Thousands of people took these offers only to find out that the payment is interest-only or even less, and their mortgage actually grows each month at that payment. The lenders don't care if I get in trouble, apparently.