The CALIFORNIA ASSOCIATION OF REALTORS® reports that home sales decreased 40.2 percent in October in California compared with the same period a year ago, while the median price of an existing home fell 9.9 percent.

The conforming loan limits will stay at current levels of $417,000 for single-family mortgages in 2008, according to the Office of Federal Housing Enterprise Oversight (OFHEO) and hinted that it could lower the limits in 2009 if home prices continue to decline.

The conforming loan limit determines the maximum size of a mortgage that Fannie Mae and Freddie Mac can buy or guarantee.  Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan, increasing the monthly payment and negatively impacting affordability for households in California.

Tip from a reader:  Put your car keys beside your bed at night.  If you hear a noise outside your home or someone trying to get into your house, just press the panic button for your car.  The alarm or horn will be set off.  Next time you come home for the night and you start to put your keys away, think of this: It’s a security alarm system that you probably already have and requires no installation.  It could also be useful for any emergency, such as a heart attack or where a person is unable to reach a phone.

If you are looking for a new mortgage or to refinance:  try to raise your credit score in the months before you apply for a mortgage.  Lenders look at a person’s credit score, a numerical summary of a person’s credit record, when deciding on loan applications.  Protect your existing credit score by making all of your credit card and other bill payments on time. Review your credit reports for incomplete or erroneous information and get it corrected.  By federal law, you are entitled to one free copy of your credit report every year from each of the three nationwide credit bureaus.  Go to www.AnnualCreditReport.com or call toll-free 1-877-322-8228 to order free credit reports or for more information.  (Source: FDIC)

If you are having problems paying your mortgage, HUD’s website at www.hud.gov provides information to help borrowers avoid foreclosure and keep their homes.  The FDIC and other financial regulators also are encouraging borrowers facing payment problems to talk to their lenders as soon as possible, and to consider getting help early from a reputable housing counselor by contacting HUD (1-800-569-4287) or the Homeownership Preservation Foundation (1-888-995-4673).

New standard forms have been released by the CALIFORNIA ASSOCIATION OF REALTORS®:

q  Short Sale Addendum (SSA): This new form may be used to make a sales transaction contingent upon the seller’s lender accepting a loan payoff of less than the balance owed.  This form also addresses other important issues pertaining to short sales, such as whether the seller can present other offers to the lender and whether the buyer may cancel during the short sale process.  This form may be attached as an addendum to the California Residential Purchase Agreement (RPA-CA) or other C.A.R. purchase agreements.

q  Notice of Transfer Fee (NTF):  This new form may be used to comply with a new law, currently slated to take effect on January 1, 2008, that requires the disclosure of private transfer fees.  This disclosure law will generally apply to, without limitation, private transfer fees for newer homes built by developers.  Exceptions include transactions exempt from the Transfer Disclosure Statement (TDS) law, transfer fees imposed by governmental agencies, and transfer fees authorized by the Davis-Stirling Common Interest Development Act.