Yesterday mortgage rates pipped upward around a tenth of a percentage point, but now they're back near where they were in the second half of last week. Nationwide, that means an average rate on a conforming, 30-year fixed around 6 3/8 or 6.5 percent.

FLAIL, HAIR SHIRT, ETC.: I've gotten a few e-mails from readers inquiring about the changes in the jumbo conforming limits, and I gotta confess -- I fell down on the job with this topic. I beg a thousand pardons. We'll have a more detailed article on Thursday.

Suffice to say that in the nation's most expensive housing markets -- the Bay Area, Los Angeles, the District of Columbia metro area (including the Maryland and Virginia suburbs), New York City and its suburbs and Long Island, and super-expensive resort areas such as Jackson Hole, Wyo. -- the jumbo conforming limit is going way down. This might mean that you'd better get moving on a purchase loan or refinance now. I hope it's not too late. (The prognosis is better on a refi than on a purchase loan.)

In the above-listed areas, the jumbo conforming limit is $729,750 this year, and is dropping to $625,500 on Jan. 1. You can see where this leads. Some folks' needs fall into that area between those two sums. If you're in that group, and if you want to avoid paying a high rate for a jumbo loan, you need to get a loan before year's end.

But that doesn't mean that you have until the end of the year to close your loan. Some lenders want to close on Dec. 15 at the latest. In some cases, that means you needed to have finished your application and locked your rate by Nov. 15. Which is, of course, a date in the past.

If you find the right lender, you might still have time to get your jumbo conforming paperwork moving through the pipeline. Get moving -- preferably faster than I write articles about changes in jumbo conforming limits.

THEY DIDN'T CALL: The Wall Street Journal reports today (Page C1) that Bank of America didn't talk to mortgage investors before the bank announced its plan to modify billions of dollars' worth of mortgages.

The loans in question were originated by Countrywide, which Bank of America acquired in July. A bunch of state attorneys general had filed suit against Countrywide, and BofA's mass-modification plan was intended to put an end to that legal hassle. But did Bank of America invite legal trouble from the investors who own those Countrywide loans?

Chase and Citi recently have announced mass-mod plans recently, and the federal government has jumped on the bandwagon, too. But Chase, Citi and (through the government) Fannie Mae and Freddie Mac will proactively modify only mortgages that they own. They say they're not going to reach in and change mortgages belonging to investors.

BofA went one step further, and plans to modify mortgages belonging to investors. The bank says that it has the authority to do so. Investors complain that BofA should have bought predatory loans out of investors' loan pools and made the modifications on the bank's dime.

Friday, Nov. 14
Posted 4 p.m. EST
PATERNALISM: In a blog like this one, which mixes reporting and opinion, sometimes the reporting looks like opinion. My fault, not yours. I wrote something confusing yesterday, in a post about what the feds were and weren't trying to accomplish when they revamped the good faith estimate of closing costs. I wrote:

"And then there's what they didn't do. The Department of Housing and Urban Development chose not to advise borrowers. In other words, at a time when we're going through a foreclosure crisis because people got toxic mortgages, the feds have formulated new mortgage disclosures that don't advise consumers whether they should get a certain loan or walk away from it."

And then I quoted Alex Pollock, a scholar at the American Enterprise Institute who believes that mortgage disclosures should let borrowers know if they're about to get unaffordable loans. Mind you, this is from someone at the libertarian-leaning American Enterprise Institute. When an AEI scholar thinks the government should get all paternal on us, that's newsworthy. I don't agree with Pollock (although I could be convinced), but I wanted to air his viewpoint. The above paragraph is confusing because it sounds like I'm making my own argument, when I'm introducing Pollock's.

More important, I gave a perspective that no other reporter did: I explained what HUD was trying to do, and what the agency chose not to do. They chose to reject paternalism, at a time when even some conservatives would like to see some paternalism.

Reader Michael Becker weighs in:

Are you kidding me? Since when is it the government's responsibility to advise people whether they should get a loan or not? Are people so irresponsible today that they can't determine whether or not they should buy a home or refinance it? Come on now -- life is tough and no matter how many laws are passed it will never be "fair." Whatever happened to personal responsibilty?

First of all, I don't think it's government's responsibility to advise people whether to get a loan or not, although I can see where someone could draw that conclusion from what I wrote. As I said, my fault, not the readers'.

But Becker's next question -- "Are people so irresponsible today that they can't determine whether or not they should buy a home or refinance it?" -- has been answered by the mortgage meltdown. Yes, millions of people were so irresponsible that they couldn't determine whether it was wise to buy or refinance. Isn't that obvious? Even so, I agree with Becker: It's not the government's decision to make. It's a free country, and people are free to fail.

Now we're getting to the part of this blog post that's going to freak out my copy editor, as I address the role of ideology in this mess. There's no name-calling here, no denunciations, no campaigning or sloganeering. I think it's appropriate to use this space to talk about the origins of the mortgage debacle, and how conservative and liberal viewpoints differ.

Becker takes offense at my criticism of conservatives and how they blame Fannie Mae and Freddie Mac for the mortgage meltdown, instead of blaming the private-label securitizers, mostly on Wall Street, who own an estimated 80 percent of delinquent mortgages. When Fannie and Freddie own or guarantee more than half of the mortgages, but just 20 percent of the delinquent mortgages, one would think that Fannie and Freddie aren't as culpable in this mess as Wall Street is.

Becker concludes:

I am in the mortgage business and I consider myself conservative. I think Mr. Lewis misses the point. Myself and other conservatives that I spoken with aren't blaming the Freddie and Fannie for all of the mortgage troubles. We are blaming the liberals in Congress for forcing Fannie and Freddie to make loans to borrowers who wouldn't otherwise have qualified for a Fannie or Freddie loan. Had the liberals in Congress listened to the warnings issued by some of the conservatives in Congress perhaps Fannie and Freddie wouldn't have needed to be taken over by the Federal government. There is plenty of blame to go around for this mess, but as recently as one month prior to the collapse of Fannie and Freddie Barney Frank was assuring the public (and investors) that they were fine.

I know that it's an article of faith among conservatives that Fannie and Freddie were forced "to make loans to borrowers who wouldn't otherwise have qualified for a Fannie or Freddie loan." But I see very little evidence of that. Marginal borrowers were encouraged to apply for subprime or Alt-A mortgages. And mortgage lenders were eager to underwrite these loans and sell them on the secondary market as quickly as possible. They didn't sell those loans to Fannie or Freddie.

Here's another e-mail, forwarded by my company's CEO, from a reader who wants him to "rein in" the likes of me and my dastardly liberalism:

Mr. Lewis's intolerance of conservative views comes through loud and clear in his "analysis" of the mortgage meltdown. It seems all too convenient for him to pretend that mortgage companies are not forced to compete with banks when those same banks, in turn, are forced by the government to make loans to people who cannot afford them.

I quote conservatives in my articles and in this blog and sometimes give them the last word here, even when I disagree. That hardly constitutes "intolerance" of their views. I welcome comments from smart, forceful conservatives. I'm merely pointing out where dogma conflicts with the facts. They can repeat over and over that lenders "are forced by the government to make loans to people who cannot afford them," but that doesn't make the assertion true.

I've never had a lender show me a promissory note and tell me, "I wanted to reject this loan, because the borrower couldn't afford it, but the government forced me to approve it." C'mon. Bankers are big boys and girls. They know how to say no.

Lenders made these loans because they wanted to make profits, not because of government pressure.

Thursday, Nov. 13
Posted 11 a.m. EST
WARNING: Last Friday, I posted a blog item about the new conforming limits for 2009. A ton of stuff has happened in the mortgage universe since then, and I haven't had time to write a more complete article about the conforming limits. Some of you could suffer as a result.

It's going to take a few paragraphs to explain why.

This year, in an effort to boost home sales, the federal government introduced something called the "jumbo conforming" limit. This jumbo conforming limit will fall in some places at the beginning of 2009. Unfortunately, this reduction in the jumbo conforming loan size could harm some borrowers as early as this week.

Until this year, there were two mortgage sizes. Conforming loans were mortgages for $417,000 or less. Jumbo mortgages were loans for larger amounts than that. Rates on jumbos are higher. Lately they've been a lot higher.

Then, this year, Congress created a new, in-between category -- the jumbo conforming -- for counties where houses are expensive. Rates on jumbo conforming loans are lower than rates for jumbos.

The jumbo conforming limit varies according to housing costs. In the most expensive places, such as San Francisco, the jumbo conforming limit was raised to $729,750 -- but only until the end of this year.

Starting Jan. 1, the conforming limit in San Francisco (and a few other expensive places) will drop to $625,500. Last Friday, I pointed this out here in the blog, and told people to get moving if this change will affect their purchase or refinance transaction. It didn't occur to me that this might be truly urgent.

And then yesterday I got this e-mail from a reader:

Recently got this e-mail from a broker:
"The conforming-jumbo temporary limit increases this program is on, expires 12/31/08 and all loans must be registered by 11/15/08 and closed and funded by 12/15/08."
Is it true? Meaning if you get the house under contract 11/16/08 the limit will be 625k?

Yes, it's true. Although the new loan limit goes into effect six weeks from now, it's affecting borrowers this week. My e-mail correspondent has to get his loan locked by Saturday. If it's a purchase transaction, that means the purchase contract has to be finalized by Saturday, too.

I should have foreseen this -- should have known that lenders would want to get these loans closed well before the end of the year. But I've been so busy writing about other stuff that I never thought about it. I hope this doesn't catch you short.

NEW FORMS TO READ: You know that hard-to-understand good-faith estimate of closing costs that you get when you apply for a mortgage? And that even-harder-to-understand HUD-1 statement of closing costs you get at closing? The feds are making them longer and, one hopes, easier to understand, I explained yesterday.

The government's main goal was to make it easier for consumers to choose the least-expensive mortgage deal. The secondary goal was to make it easier to comparison-shop. The tertiary goal was to make it easier to compare the estimate of closing costs with the final, real closing costs.

I think the feds succeeded in their first two goals. They swung and missed when they tried to make it easier to compare the estimates with the final numbers.

And then there's what they didn't do. The Department of Housing and Urban Development chose not to advise borrowers. In other words, at a time when we're going through a foreclosure crisis because people got toxic mortgages, the feds have formulated new mortgage disclosures that don't advise consumers whether they should get a certain loan or walk away from it.

The new disclosures will help people pick the loan with the lowest closing costs, but the documents are silent on whether it's wise to get the loan in the first place. It's like buying a vehicle: You might get a great price on a Hummer, but if you can't afford to fuel it for your 100-mile commute, then buying a Hummer is a foolish choice.

Alex Pollock, a scholar at the American Enterprise Institute, put it well. The mortgage disclosures, he said, "should help you, the borrower, clearly answer the single most important question about the mortgage: Can I afford this loan? You may get the lowest-cost loan and not be able to afford it."

RATES: Mortgage rates declined slightly this week, as the recent period of volatility took a breather.