A House-passed mortgage reform bill makes it tough for borrowers to get traditional adjustable-rate mortgages that are considered safe enough so lenders don't have to retain 5% of the credit risk when they sell or securitize the ARM.

Originally the bill (H.R. 1728) provided this exemption or safe harbor only for prime fixed-rate mortgages and mortgages guaranteed by government entities. But the House expanded the safe harbor to include ARMs — provided borrowers are qualified at the fully indexed rate at the end of seven years.

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