If you've gotten off the fence and are just beginning your search for a home, get away from the fence and into a home as quickly as possible--especially if you found it difficult to qualify for a mortgage.

Federal monetary regulators are turning up the pressure on mortgage lenders to make home loans more difficult to acquire, especially riskier home loans that come with rates that don't sit still.

With interest rates already ratcheting up on existing adjustable rate mortgages, regulators would like to see fewer of the loans in the future and they are scrutinizing the level of loans that require little or no documentation about a borrower's income, expenses or ability to repay the mortgage.

Years of low interest rates, combined with a growing number of easy-money mortgages including interest-only loans, option ARMs and others have allowed buyers to cope with record-setting, skyrocketing home prices. Conditions also have been favorable for existing home owners to dig deep into home-equity generated wealth to purchase necessities, but also to raise their standard of living beyond what incomes allow.

ARMs for both purchases and refinances come with initially lower rates, hence smaller payments that lend borrowers more leverage to buy more expensive homes, to buy homes for which they may not have otherwise qualified and to land larger home equity loans.

In the land of high home prices, fixed-rate mortgages with their higher rates and higher mortgage payments often price would-be home buyers out of the market.

Now, however, interest rates are rising and ARMs could also begin to price existing home owners out of their home.

ARMs' cheaper initial rates are tied to a variety of home loan indexes. Indexes are the interest rate starting point to which margins are added to set and move the actual ARM rate. All mortgage indexes were up and rising in 2005 and nearing levels that are double what they were in early 2004.

The popular prime rate, for example, was at 7.25 percent at the end of 2005 compared to just 5 percent a year earlier. Before the Federal Reserve began raising interest rates to beat back inflation, the prime was locked in at 4 percent for the last half of 2003 through the first half of 2004.

Federal monetary system experts are concerned too many home owners may soon be saddled with home loans they can't afford as their monthly payments rise beyond their financial reach.

In the third quarter of 2005, mortgage research firm Loan Performance said 33 percent of first mortgages approved by lenders were nontraditional loans, compared with 1 percent five years ago.

By early 2006, federal monetary officials planned to release a second set of guidelines aimed at lenders with portfolios heavy with the riskier loans. The feds want lenders to roll back the number of originations on riskier loans through tighter underwriting standards. That will make it more difficult for home buyers to land a loan, especially home buyers already on the borderline of qualifying for a mortgage.

"Too many consumers have been attracted to products by the seductive prospect of low minimum payments that delay the day of reckoning, but often make ultimate repayment of growing principal far more difficult," said the comptroller of the currency, John C. Dugan, in an early December speech to the Consumer Federation of America.

"At the same time, too many lenders have been attracted to the product by the prospect of booking immediate revenue without receiving cash in hand, a process that often masks underlying credit problems that could ultimately produce substantial losses," Dugan added.

On May 16, 2005, coinciding with a heightened level of warnings about escalating home prices, industry fraud, the potential for higher interest rates and other concerns, the Federal Reserve, along with the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision and the National Credit Union Administration, issued a joint "Credit Risk Management Guidance For Home Equity Lending" advisory.

The advisory said the quality of lenders' home equity portfolios was of concern, especially if "interest rates rise and home values decline. Sound underwriting practices and effective risk management systems are essential to mitigate this risk."

Months later, in the face of persistent interest rate increases, rather than tighten requirements for home loan approvals, almost 40 percent of domestic banks reported they had done quite the opposite and increased the maximum size of mortgages they offered. Approximately 30 percent of lenders said during the same two-year period they had increased the maximum size of second mortgages, according to the Federal Reserve Board's "October 2005 Senior Loan Officer Opinion Survey on Bank Lending Practices."

In his speech, Dugan dissected a payment-option mortgage to reveal what could be a very rude awakening for some borrowers.

Dugan also asked, "And are lenders really prepared to deal with the consequences--including litigation risk--of providing such products in markets where real estate prices soften or decline, or where interest rates substantially increase?" Time will tell.

Real estate writer Broderick Perkins, executive editor of San Jose-based DeadlineNews.Com, writes regularly for this newspaper.