Final regulatory guidance for federally chartered bank lenders on so-called non-traditional mortgage products came forth to a relatively receptive market late last month. The guidelines were little changed from those proposed last December.

One particular aspect of the regulations that are expected to bear most heavily on the market, however, is the possibility that lenders will no longer be able to qualify interest only and option ARM borrowers on their ability to pay a product's low introductory rate - a practice that has helped shoe horn a number of borrowers into homes, and one that will now not be available to financially exhausted borrowers in coming years, some speculated.

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