The so-called "conforming" loan limit is based on the Federal Housing Finance Board's Monthly Interest Rate Survey, which includes an analysis of average home prices. According to the latest version released, home prices have declined 3.1 percent in the 12 months through September. The limit for 2007 will be calculated upon release of October data on Nov. 28.

These agencies put money into circulation that makes it possible for lending institutions to service all segments of the market. They do so by packaging the mortgages they buy and reselling them to investors. A smaller limit may match a broad decline in loan sizes, but disadvantage the companies in areas where prices remain above the 2006 limit of $417,000.

If the loan limit drops significantly, the loans that fall within their purview will be irrelevant in the higher priced markets. The median price of a home in the San Francisco Bay Area was over three quarters of a million dollars in June of 2006. In some counties within the metro area, the median was higher than that. I

The so-called "conforming" loan limit is based on the Federal Housing Finance Board's Monthly Interest Rate Survey, which includes an analysis of average home prices. According to the latest version released, home prices have declined 3.1 percent in the 12 months through September. The limit for 2007 will be calculated upon release of October data on Nov. 28.

These agencies put money into circulation that makes it possible for lending institutions to service all segments of the market. They do so by packaging the mortgages they buy and reselling them to investors. A smaller limit may match a broad decline in loan sizes, but disadvantage the companies in areas where prices remain above the 2006 limit of $417,000.

If the loan limit drops significantly, the loans that fall within their purview will be irrelevant in the higher priced markets. The median price of a home in the San Francisco Bay Area was over three quarters of a million dollars in June of 2006. In some counties within the metro area, the median was higher than that.

These agencies put money into circulation that makes it possible for lending institutions to service all segments of the market. They do so by packaging the mortgages they buy and reselling them to investors. A smaller limit may match a broad decline in loan sizes, but disadvantage the companies in areas where prices remain above the 2006 limit of $417,000.

If the loan limit drops significantly, the loans that fall within their purview will be irrelevant in the higher priced markets. The median price of a home in the San Francisco Bay Area was over three quarters of a million dollars in June of 2006. In some counties within the metro area, the median was higher than that.

If the loan limit drops significantly, the loans that fall within their purview will be irrelevant in the higher priced markets. The median price of a home in the San Francisco Bay Area was over three quarters of a million dollars in June of 2006. In some counties within the metro area, the median was higher than that.

Loans within the conforming limit cost borrowers up to 0.5 percentage point less than a non-conforming “jumbo” loan. If the limit is cut, the former cap figure of $417,000 would cost an additional $100 dollars per month as a non-conforming loan.

Some analysts believe that it is possible the loan limit will remain static while home prices in the most highly inflated areas come down. But since the soft market essentially spans all housing sectors, it is likely that the limit will be reduced at the end of November according to analysts.

During the home buying mania of 2000-2005, the cost of money seemed to be secondary to getting into the home. Many buyers saw home ownership as the most lucrative form of investment available to them, and were willing to live with adjustable rate mortgages that carried very expensive premium payments if they lived beyond the initial low interest rate. Now that refinancing out of these ARMs is mu