As you all are aware by now, Fannie Mae has increased their 2006 maximum loan limits. For a copy of Fannie Mae's announcement, click here. The increased Fannie Mae loan limits for 2006 are: $417,000 for a single unit dwelling, $533,850 for a 2-unit dwelling, $645,300 for a 3-unit dwelling, and $801,950 for a 4-unit dwelling. Many state high cost loan laws and regulations reference the Fannie Mae loan limits, usually in the form of a ceiling above which the state specific high cost loan provisions do not apply. Here is a quick and brief recap of the impact of Fannie Mae's maximum loan limit increases on state specific high cost calculations:

• California - California's Covered Loan Law now applies to consumer loans in which the original principal balance of the loan does not exceed the most current conforming loan limit for a single-family first mortgage loan established by Fannie Mae (increased from prior $250,000 ceiling)
• D.C. - high cost loan law applies only to loans that do not exceed Fannie Mae limits for comparable dwellings (for all properties other than 1-4 family properties, the amount is $417,000; for 1-4 family properties, the amount is $801,950)
• Georgia - Fair Lending Act applies only to loans that do not exceed Fannie Mae loan limit for a single family dwelling in Georgia
• Indiana - high cost loan law applies only to loans that do not exceed Fannie Mae loan limit for a single family dwelling
• New Mexico - high cost loan law applies only to loans that do not exceed Fannie Mae loan limit for a single family dwelling
• South Carolina - high cost loan law applies only to loans that do not exceed Fannie Mae loan limit for a single family dwelling
• Texas - high cost loan law applies only to loans equal to or less than one-half of the maximum Fannie Mae limits for first mortgages (for all properties other than 1-4 family properties, the amount is $208,500; for 1-4 family properties, the amount is $400,975)

Accordingly, we have updated the high cost memos for the above States and the District of Columbia posted to our Predatory Lending page.