July 22nd-housing earthquake

Thanks to Seattle Bubble for pointing out that

"New guidelines making it tougher to qualify under interest only mortgage terms begins on July 22nd...In summary: “any mortgage containing an interest-only feature be underwritten at the highest possible interest rate or subsequent amortizing payment, and that any mortgage containing a negative-amortizing feature be underwritten at the highest possible balance and interest-rate adjustment”"

It may take a while for the effects of this to filter through the market, depending on ARM reset dates, but it will surely put severe pressure on home prices nationwide.