The chief regulator of Fannie Mae and Freddie Mac says the mortgage giants' conforming loan limit for 2004 is $2,300 too high because of an "improper calculation."However, the agency will not reduce the current loan limit -- which is $333,700 -- and instead will incorporate a change in next year's loan limit. The Office of Federal Housing Enterprise Oversight said it has issued a "supervisory guidance" establishing a "regulatory process" for annual adjustments. The agency says it determined several months ago that the 2004 loan limit adopted by Fannie and Freddie "failed to incorporate a necessary adjustment factor brought on by methodological changes" in the Federal Housing Finance Board's monthly interest rate survey.

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