Wachovia Reports $23.9b Loss, Conforming Loan Limits Of $625k, Oil Below $70, Rates Lower

Wachovia, being acquired by Wells Fargo, reported a loss of $23.9 billion in the third quarter, its third straight quarterly loss. Wells, who never made a market in the neg-am, pick-a-pay loans, is paying about $14 billion for Wachovia. Wells is also restructuring some balance sheet items in order to stay under the “no bank can control more than 10% of nationwide deposits” regulations.

Loan Apps Down
Applications for loans dropped 16.6% last week, according to the MBAA. The purchase index fell 10.9%, and refinancing apps were down 23.5%! Hopefully the lower rates this week will help applications pick back up

Conforming Loan Limits Look Like They’ll Be $625,500
Speaking of the Mortgage Bankers Association, they have asked the Federal Housing Finance Agency to increase the limit for Fannie Mae and Freddie Mac purchases or guarantees of single-family mortgages to $625,500. This is obviously higher than the $417k limit in many areas, but below the $729,750 limit currently enjoyed in many markets. The $625,500 is 50% above the current $417k limit, and although it is bad news for lenders in states like CA, NY, or FL, it is viewed as helping most other areas. (Hawaii and Alaska would still be 50% above the $625,500.) Remember that Congress approved raising the limit temporarily to $729,500, but it expires at the end of the year and lawmakers would decide whether to raise the limit permanently.

HSBC Eliminates Stated Income
Due to “market conditions”, HSBC is eliminating Freddie Mac Stated Income loans.

Oil Below $70, Rates Lower
There is incredibly little economic news today, aside from the stock market looking lower. For anyone who has a car, or uses heat, they’ll be happy to know that oil prices are continuing lower. We’re actually below $70 per barrel, so in spite of your 401(k) program turning into a 301(k) program, it’ll cost you a few bucks less every time you fill up your H2. Rate-wise, we’re also continuing lower. The 10-yr yield is down to 3.66%, and mortgage prices are better by roughly .125.

Daily Humor
I have an uncle down at Wall Street. He used to have a corner on the market. Now he has a market on the corner.

How can you get the attention of your broker?
Say, “Hey, waiter!”

What’s the difference between an investor and a pigeon?

The pigeon can still make a deposit on a house.