OFHEO NEWS RELEASE

FOR IMMEDIATE RELEASE

October 16, 2007

NO DECLINE IN 2008 CONFORMING LOAN LIMIT

Additional Comments Sought on a Revised Loan Limit Guidance

New Mortgage Market Note on Historical Trends in

Conforming Loan Limit

Washington, DC – The Office of Federal Housing Enterprise Oversight (OFHEO) announced today three actions regarding the calculation of the conforming loan limit, which establishes the maximum mortgage loan value eligible for purchase by Fannie Mae and Freddie Mac.

OFHEO Director James Lockhart announced that, based on provisions in the proposed guidance, the current conforming loan limit will not be reduced for 2008. If the index used to calculate the maximum loan level should increase, the amount of the increase in 2008 would be reduced by the decline calculated in 2006 of 0.16%. Under no circumstance, however, would the maximum loan level for 2008 drop below the 2006 and 2007 limit of $417,000.

OFHEO Director Lockhart also announced that OFHEO has transmitted to the Federal Register a revised Examination Guidance for procedures relating to the calculation of the conforming loan limit and implementation of increases or decreases in the limit. A proposed guidance was subject to public comment earlier this year and OFHEO has made changes to the proposed guidance in several areas. OFHEO is seeking additional comment on the revised guidance within 30 days of its publication in the Federal Register.

Key provisions of the revised Examination Guidance entitled Conforming Loan Limit Calculations proposed for public comment are the following:

-- As previously proposed, any decreases in the limit would be deferred one year.

-- Decreases would have to total cumulatively more than three percent before a decrease would be implemented, a change from the proposed one percent de minimis amount.

-- As proposed and clarified, if a loan is conforming at the time of origination, it remains conforming regardless of declines in the conforming loan limit, providing greater certainty for markets and asset securitization.

-- As proposed, for simplification, the conforming loan limit will be rounded down to the nearest $100.

The Guidance, as transmitted to the Federal Register for publication, may be found on OFHEO’s website at www.ofheo.gov/media/guidance/CLL101607FR.pdf. The notice for the Federal Register contains a summary of the proposed and final guidances, the revised guidance as well as an Appendix setting forth various scenarios relating to possible loan limit decreases.

OFHEO also announced the publication of a new Mortgage Market Note on the conforming loan limit. The Note provides background information on the history of the conforming loan limit. It traces the growth in the loan limit relative to other key economic variables, such as household income. The Note also describes how the national loan limit has changed as compared with regional and state-level measurements of home price appreciation. The Mortgage Market Note is available on OFHEO’s website at www.ofheo.gov/media/mmnotes/MMNOTE072.pdf.

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Link to PR: http://www.ofheo.gov/newsroom.aspx?ID=392&q1=1&q2=None

OFHEO's mission is to promote housing and a strong national housing finance system by ensuring the safety and soundness of Fannie Mae and Freddie Mac.

Today's Interesting Articles

1. WASHINGTON, DC - A proposal by the Office of Federal Housing Enterprise Oversight (OFHEO) that could lower the conforming loan limit ("CLL" - calculations establish the maximum size limit for loans that Fannie Mae and Freddie Mac are allowed to purchase and they are also used to set limits for FHA and VA loans - important to home buyers looking to put 3%-5% down with government subsidized loans especially when the subprime market is deteriorating) as early as 2009 and would establish new guidance for calculating the annual limit so that it could be reduced in the future would have adverse consequences for the nation’s home buyers, according to National Association of Home Builders... In NAHB’s response, David Crowe, the association’s senior staff vice president for regulatory and housing policy, noted that the conforming loan limit remained unchanged in 1993 and 1994, years in which the home price index registered declines, because “the current law does not require a decline in the limit when the price index declines.” These declines were subsequently netted out of future increases in the limit. Authority to increase or decrease the conforming loan limit is included in H.R. 1427, The Federal Housing Finance Reform Act of 2007, and NAHB opposes that provision, Crowe said. “Pending enactment of this authority, NAHB maintains that the loan limit can only be increased, but not decreased, under current statutory authority,” he said. View article..

2. NEW YORK - Kimco Realty (KIM - Cramer's Take - Stockpickr - Rating) is third on the list of high-yield stocks with recently raised dividends. The real estate investment trust, which develops and manages shopping centers, pays a yield of 4.3%, having recently increasing its dividend by 11.1%. Kimco has a P/E of 19.3 and a PEG of 1.8. It just reported a 38% increase in funds from operations, a common real estate performance metric that adds back depreciation and other noncash items to net income. Kimco is also on Stockpickr's Dividend Growth portfolio, which lists stocks that raise their dividends on a regular basis.

3. STOCKTON - On Aug. 10, the Krispy Kreme sign on the doughnut shop at March Lane and Interstate 5 might read something like "Krispy Klosed." The Stockton store, which opened to great hoopla and hurrahs in August 2002, will shut down along with other company-owned stores in Fresno, Citrus Heights and Concord. This will mean a Krispy Kreme-less Central Valley. Stores closed in Roseville and Elk Grove last fall and in Modesto before that. Brian Little, director of corporate communications for Winston-Salem, N.C.-based Krispy Kreme Doughnut Corp., also said Krispy Kreme products will no longer be available in local grocery and convenience stores. He said in a statement that the closures are part of the company's "turnaround." View article..

4. CENTRAL VALLEY - (As a father of two children diagnosed with autism related disorders and the continuing challenges that my wife and I face everyday, this article "struck home") Pregnant women from the Central Valley who were exposed to high levels of pesticides were up to six times more likely to give birth to a child with autism or a related disorder, state health officials said Monday. California Department of Public Health researchers studied 465 children with autism spectrum disorders in 19 counties born between 1996 and 1998, comparing them with a control group of nearly 7,000 other children. They found that women who lived close to fields with the highest use of a group of pesticides known as organochlorines were the most likely to bear children with the disorders, which range from mild to severe and cover a wide array of neurological and developmental problems, including difficulties with speaking, social interaction and motor skills. View article..