What’s the scoop on the latest news on conforming loan limits? First, remember that OFHEO, who oversees FNMA and FHLMC, sent out a press release in mid-October stating that, in spite of declines in many markets, the conforming loan limits would not be decreased.

http://www.ofheo.gov/newsroom.aspx?ID92&q10&q20

In addition, for those curious about how states like California or New York compare to national averages, OFHEO sent out a document which includes this information:

http://www.ofheo.gov/media/mmnotes/MMNOTE072.pdf

Yesterday morning I called OFHEO’s press room to ask about when the official announcement would be made. Their answer was “tomorrow” (which is now today, Tuesday). I then asked about whether or not that announcement would include any state-dependent language (i.e., “Will New York, Florida, or California be broken out in a similar fashion to Hawaii or Alaska?”) She replied “no”. (“Our release will not vary in language from those of previous years.”) As I understand it, OFHEO’s hands are tied unless Congress enacts legislation directing them, which has not happened. And the last news on this was that “Governor Schwarzenegger has fired off a letter to the leaders in the U.S. Senate and the House of Representatives urging them to support legislation that would raise the loan limit for conforming loans. The current loan limit for lenders is $417,000, while the median price for a home here is more than $586,000. "This disparity makes these products practically irrelevant in California. This means that for the majority of California homebuyers, the only option is to obtain a larger 'jumbo' loan and pay higher interest rates and fees," said the governor. Most mortgage professionals say that raising the limit would be the biggest boost for the real estate market possible here in the Golden State.” Unfortunately there is probably not much taxpayer support in the rest of the nation for this…

Company news:

• Paul Financial “has decided to temporarily suspend the acceptance of new loan submissions effective Monday, November 26, 2007.  All loans that are currently in process will be evaluated based on current underwriting guidelines, and completed as appropriate.” Paul Financial was known for providing niche lending programs to match the needs of high credit quality borrowers.
• Who is Sheikh Ahmed Bin Zayed Al Nahayan? He’s the Managing Director of ADIA, which is the investment arm of the Abu Dhabi government. (Considered the richest city in the world, and, along with Dubai, is one of the seven United Arab Emirates.) They are buying $7.5 billion of CitGroup’s stock. As a result of the deal, the investment authority known as ADIA will become one of Citigroup's largest shareholders, with a stake of no more than 4.9%. The stake will exceed that of Saudi Prince Alwaleed bin Talal, long known as one of Citigroup's largest shareholders.
• Yesterday Wells Fargo Wholesale Home Equity Lending discontinued offering non-Wells Fargo simultaneous second liens, i.e. piggybacks with any lender other than Wells Fargo will not be accepted, standalone second liens where the existing first mortgage is not already with Wells Fargo, i.e. standalones behind any lender other than Wells Fargo will not be accepted, and standalones in the first lien position.
• According to Freddie Mac, among borrowers with one-year, adjustable-rate mortgages who refinanced in the third quarter, 85% switched to fixed-rate loans. The figure was slightly lower, 82%, among borrowers who refinanced out of hybrid ARMs, in which rates are fixed, sometimes at very low levels, for a longer initial period. Those figures are little changed from 86% and 85% in the second quarter. They indicate that even the most creditworthy borrowers continue to shy away from riskier loans as home prices fall.

Why did we see a rally (improvement) in mortgage prices yesterday? Continued credit concerns, a sinking stock market (led by financial stocks), and subprime headlines were the motivating factors, sending the 10-yr Treasury yield to its lowest point in more than three years (3.83%). Mortgages performed better early in yesterday's session due to some servicer buying, but money managers and hedge funds emerged as sellers once the 10-yr yield dropped below 3.85%. Lock volumes picked up a little after last week’s slowdown and we’ll see if that continues with mortgage prices worse by .125 and the 10-yr at 3.86%.

A man in Phoenix calls his son in New York the day before Christmas and says, "I hate to ruin your day, but I have to tell you that your mother and I are divorcing; forty-five years of misery is enough.”
"Pop, what are you talking about?" the son screams.
“We can't stand the sight of each other any longer," the father says. "We're sick of each other, and I'm sick of talking about this, so you call your sister in Chicago and tell her."
Frantic, the son calls his sister, who explodes on the phone. "Like heck they're getting divorced," she shouts, "I'll take care of this!"
She calls Phoenix immediately, and screams at her father, "You are NOT getting divorced. Don't do a single thing until I get there. I'm calling my brother back, and we'll both be there tomorrow. Until then, don't do a thing, DO YOU HEAR ME?" and hangs up.
The old man hangs up his phone and turns to his wife. "Okay," he says, "they're coming for Christmas and paying their own way."