Wells Fargo & Company (NYSE:WFC) and Wachovia Corporation (NYSE:WB) said today they have signed a definitive agreement for the merger of the two companies including all of Wachovia’s banking operations in a whole company transaction requiring no financial assistance from the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

Under the agreement, Wells Fargo will acquire all outstanding shares of common stock of Wachovia in a stock-for-stock transaction. In the transaction, Wells Fargo will acquire all of Wachovia Corporation and all its businesses and obligations, including its preferred equity and indebtedness, and all its banking deposits.

Under terms of the agreement, which has been approved unanimously by the boards of both companies, Wachovia shareholders will receive 0.1991 shares of Wells Fargo common stock in exchange for each share of Wachovia common stock. The transaction, based on Wells Fargo’s closing stock price of $35.16 on October 2, 2008, is valued at $7.00 per Wachovia common share for a total transaction value of approximately $15.1 billion. Wachovia has almost 2.2 billion common shares outstanding. The agreement requires the approval of Wachovia shareholders and customary approvals of regulators.

WASHINGTON, DC – U.S. home prices fell in the second quarter of 2008 according to OFHEO’s seasonally-adjusted purchase-only house price index. The index, which is based on data from home sales, was 1.4 percent lower on a seasonally-adjusted basis in the second quarter than in the first quarter. This decline was less steep than the 1.7 percent decline in the prior quarter. Over the past year, prices fell 4.8 percent between the second quarter of 2007 and the second quarter of 2008. The decline is the largest in the purchase-only index’s 17-year history, but is much smaller than those of other indexes.

OFHEO’s all-transactions House Price Index (HPI) fell 1.4 percent in the latest quarter and was down 1.7 percent over the four-quarter period.

The figures were released today by OFHEO Director James B. Lockhart, as part of the quarterly report analyzing housing price appreciation trends.

“Tighter credit conditions and relatively high inventory levels led to some sharp price declines in the second quarter,” said Lockhart. “However, the majority of Metropolitan Statistical Areas (MSAs) posted positive four-quarter growth.”

The monthly index, which is a purchase-only measure of price changes, was flat between May and June on a seasonally-adjusted basis, but was down 5.0 percent since the April 2007 peak. In June, seasonally-adjusted prices in thePacific Census Division were 17.6 percent off their early 2007 peak, making it the worst performing Division. By contrast, June prices in the West South Central Division reached a new high.

While the national purchase-only house price index fell 4.8 percent between the second quarters of 2007 and 2008, prices of other goods and services increased 5.3 percent. Accordingly, the inflation-adjusted price of homes fell approximately 10.1 percent over the latest year.

“The most overbuilt areas of the country–including California, Nevada, Arizona, and Florida–contrast greatly with most other states, where prices are declining more moderately or even increasing,” said OFHEO Chief Economist Patrick Lawler. “Nationally, the substantial declines in the weakest markets have driven seasonally adjusted prices down to late-2005 levels.”

Read the entire report here

It appears that HUD is trying to pilot a FHA Foreclosure Prevention but as simple as it appears, why has it taken so long?

The Department of Housing and Urban Development is starting a pilot program in Detroit to purchase Federal Housing Administration single family loans from lenders after all loss mitigation options have been exhausted and foreclosure is the next step.

“Under this program, we will create means for lenders or investors to sell their non-performing mortgages before foreclosure to HUD and a joint venture partner who will be responsible for servicing the loan and helping families stay in their homes,” HUD Secretary Steve Preston said.

HUD expects to purchase the FHA loans at a “significant discount” so the joint venture partner can modify the loans and make it more affordable for the homeowners.

Mortgage rates dipped last week to a two month low. But we will likely see them bounce back up in response. Additionally, there is no indication they will go down any further. Inflation is the key driver here, and it is not letting up as the summer gets into full swing. We recommend getting a rate locked now, as they are still historically low.

>>Lock today

Bankrate
When the stock markets lose triple digits and mortgage bonds don’t blink, it’s a pretty good sign we have greater odds for less bond demand — and higher rates. Still no indication that rates are breaking out of the channel they’ve been trading in for weeks. In a phrase, it’s the underlying value of the assets to which mortgage bonds are attached.

Rates fell last week, but they’ll bounce back up. Inflation hasn’t gone away, despite the weak economy. Mortgage rates respond to inflation.

HSH Market Trends
Mortgage rates staged a minor improvement last week, with HSH’s Fixed Rate Mortgage Indicator (FRMI) sliding by six basis points, landing at a flat 6.50%. The FRMI includes rates from conforming, jumbo and the new “expanded conforming” loans. Hybrid 5/1 ARMs also dipped, shedding five basis points to land at 6.11%.

Conforming 30-year fixed rates declined by eight basis points (.08%), while jumbo 30-year FRMs shed seven basis points for the week. It is strange to say, but we should be cheering the lousy growth pattern. If the economy was moving upward, the additional demand would push inflation and interest rates higher. At present, all we can hope for is that the economy breaks inflation before inflation completely breaks the economy.

Overall mortgage interest rates managed a little improvement last week, surprisingly. More or less, rates have been generally flat for weeks, and that stability is a welcome stance in a weary market. Not much likelihood of a huge movement this week, but we may see rates rise a couple of basis points or so.

Mortgage Commentary
The Conference Board started this week’s economic releases with their Consumer Confidence Index (CCI) May. It showed a weaker than expected level of confidence with a reading of 57.2 when it was forecasted to stand at 60.0. This was the lowest reading in 16 years, indicating that consumers are not very optimistic about their personal financial situations. This is considered good news for bonds and mortgage rates because it usually means consumers are less likely to make large purchases in the near future.

April’s New Home Sales data was also released today, revealing a higher level of sales than was expected. However, today’s report also revised March’s sales lower. This means that sales were weaker than thought in March, but the month to month increase was fairly large. This is bad news for bonds because a weak housing sector usually translates into weaker economic conditions in general.

Tomorrow morning we will see April’s Durable Goods Orders data. This report gives us an indication of manufacturing sector strength by tracking orders at U.S. factories for big-ticket products. It is currently expected to show a decline in new orders of approximately 1.5%. If this report shows a stronger than expected reading, we should see mortgage rates rise because it indicates manufacturing growth.

>>Apply and lock today to secure your low rate.

If you have found the right home to buy, secure your financing today.

If you have an adjustable rate or need to get cash out of your home, don’t wait for rates to go up even more.

Pockets of Strength Remain; Coasts, Midwest Show Biggest Declines

WASHINGTON, DC – U.S. home prices fell in the fourth quarter of 2007 according to OFHEO’s seasonally-adjusted purchase-only house price index. The index, which is based on data from home sales, was 1.3 percent lower on a seasonally-adjusted basis in the fourth quarter than in the third quarter of 2007. This decline was substantially greater than the 0.3 percent price decline between the second and third quarters. Over the past year, prices fell 0.3 percent, as the fourth quarter decline erased earlier price gains.

OFHEO’s all-transactions House Price Index (HPI), which includes data from home sales and appraisals for refinancings, showed less weakness than the purchase-only index. The all-transactions HPI rose 0.1 percent over the latest quarter and 0.8 percent over the latest year.

The figures were released today by OFHEO Director James B. Lockhart, as part of the quarterly report analyzing housing price appreciation trends. “Although prices for home purchases in the quarter fell in every state except Maine, only 16 states plus the District of Columbia showed price declines for the full year 2007,” said Lockhart. “While the market weakness is most significant in areas that saw the greatest price run-ups during the boom, other states have clearly not been immune to recent declines.”

“The year 2007 showed the first four-quarter decline in the purchase-only index since its earliest data in 1991,” Lockhart added. “However, both OFHEO’s purchase-only index and the all-transactions index show relatively greater house price stability than do other nationwide house price indexes. That may reflect, in part, the greater stability in the prime, conforming mortgage market served by the Enterprises than in other segments of the mortgage market,” said Lockhart.

New in this release are monthly purchase-only indexes through December 2007 for the nine Census Divisions and the U.S. The new series indicates that seasonally adjusted prices declined 0.2 percent in December across the U.S., on average. This is the sixth consecutive monthly decline, bringing the total drop from the April 2007 peak to 2.4 percent.

“Given the recent turmoil in housing markets we thought it would be helpful to provide a greater amount of information about price trends,” Lockhart said.

Beginning in March and on a monthly basis thereafter, OFHEO will provide news releases containing updated monthly indexes, with a two-month lag. For example, the March release will include January data. OFHEO’s quarterly house price releases will continue and will include both the quarterly and monthly information.

Nationally, house prices grew at a much slower rate over the last year than did prices of non-housing goods and services. While the national purchase-only house price index fell 0.3 percent between the fourth quarters of 2006 and 2007, prices of other goods and services rose 4.3 percent. The real price of homes thus fell 4.6 percent over the latest four quarters.

“While the declines are significant and quite large in some areas, the market still needs to work through its overhang of unsold inventory,” said OFHEO Chief Economist Patrick Lawler. “How much further down that inventory will ultimately push prices will depend on a number of factors, including what happens to interest rates and the overall health of the U.S. economy,” Lawler said.

Significant Findings:

Purchase-only Index:

1. The four-quarter decline in the purchase-only index was the first since at least 1991Q1 (the first period covered by that index).

2. Prices fell between the third and fourth quarters in every state except Maine.

3. Every Census Division also experienced a price decline between the third and fourth quarters. Prices were weakest in the Pacific Census Division, which experienced a 4.5 percent price decline in the quarter.

All- transactions HPI:

4. The states with the greatest rates of appreciation between the fourth quarter of 2006 and the fourth quarter of 2007 were: Utah (9.3%), Wyoming (8.3%), North Dakota (7.9%), Montana (6.9%), and Alaska (6.0%). The states with the lowest rates of appreciation for the same period were: California (-6.6%), Nevada (-5.9%), Florida (-4.7%), Michigan (-4.3%), and Rhode Island (-2.6%).

5. The Metropolitan Statistical Areas (MSAs) with the greatest rates of appreciation between the fourth quarter of 2006 and the fourth quarter of 2007 were: Wenatchee, Washington (13.7%), Houma-Bayou, Louisiana (12.2%), and Grand Junction, Colorado (12.0%). The MSAs with the lowest rates of appreciation for the same period were: Merced, California (-19.0%), Modesto, California (-15.5%), and Stockton, California (-15.3%).

6. Of the 291 cities on OFHEO’s list of “ranked” MSAs, 192 had positive four-quarter appreciation and 99 had price declines.

7. Of the 20 ranked cities with the greatest price declines over the latest four quarters, all but two were in California or Florida (Nevada and Michigan accounted for the remainder).

The complete list of state appreciation rates can be found on pages 25 and 26. The complete list of city (MSA) appreciation rates is available on pages 32 – 49.

Highlights

Details concerning the new monthly indexes can be found in the “Highlights” section of this report.

The Highlights section also includes a description of some technical changes that have been made to the way in which OFHEO’s national indexes are computed. The changes improve the weighting system that is used in constructing the index, but generally do not have a dramatic impact on index estimates.

Background

OFHEO’s purchase-only and all-transactions house price indexes track average house price changes in repeat sales or refinancings of the same single-family properties. The purchase-only index is based on more than five million repeat sales transactions, while the all-transactions index includes more than 34 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 32 years.

OFHEO analyzes the combined mortgage records of Fannie Mae and
Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased in 2007 was $417,000 and remained at that level in the first month of 2008. Legislation enacted earlier this month has raised it on a temporary basis to as much as $729,750 in high cost areas. The data reported here do not reflect this change.

This HPI report contains four tables: 1) A ranking of the 50 States and Washington, D.C. by House Price Appreciation; 2) Percentage Changes in House Price Appreciation by Census Division; 3) A ranking of 291 MSAs and Metropolitan Divisions by House Price Appreciation; and 4) A list of one-year and five-year House Price Appreciation rates for MSAs not ranked.

OFHEO’s full PDF of report is at:
www.ofheo.gov/media/pdf/4q07hpi.pdf. Also, be sure to visit www.ofheo.gov to use the OFHEO House Price calculator. Please e-mail ofhe...@ofheo.gov for a printed copy of the report. The next monthly house price index report will be released on March 25, 2008 and the next quarterly HPI report will be posted May 22, 2008.

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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.

Fannie Mae Ties 3Q Losses to Alt A Mortgage Market

Over 25% of Fannie Mae’s credit losses in the third quarter came from its book of guaranteed alternative A mortgages, according to the company’s president and chief executive officer, Daniel Mudd.

The giant secondary market agency has guarantees on $324.7 billion in alt A mortgage backed securities, which had a serious mortgage delinquency rate of 1.36% as of Sept. 30.

“Alt A drove about 28% of Fannie Mae’s total credit losses in the most recent period,” Mr. Mudd told a Goldman Sachs investor conference. “this book gets an awful lot of attention”.

Only 40% of its guaranteed alt A loans have credit enhancements, which suggests many are piggy backed with second liens. The weighted average credit score is 719.

Fannie took $1.2 billion in credit related expenses in the third quarter, including a $670 provision for credit losses on delinquent loans it purchased out of Fannie-guaranteed MBS.

Today’s Current Mortgage Interest Rates December 7 2007. Fixed mortgage rates are DOWN from Thursday December 6 2007, while adjustable mortgage rates are DOWN - Today’s 30 Year, is UP and 15 Year Fixed are DOWN - while as the 5/1 is DOWN the 3/1 ARM Mortgage Interest Rates are UP. The 10 year treasury bond is UP to 4.05%.

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Today’s Current Mortgage Interest Rates November 29 2007. Fixed mortgage rates are UNCHANGED from Wednesday November 28 2007, while adjustable mortgage rates are UNCHANGED - Today’s 30 Year, is DOWN and 15 Year Fixed are DOWN - while as the 5/1 is UNCHANGED the 3/1 ARM Mortgage Interest Rates is UNCHANGED as well . The 10 year treasury bond is DOWN 3.96%.