Mortgage Bankers Cut U.S. Loan Origination Forecast by $700 Billion in 2009

June 22, 2009 by · Leave a Comment
Filed under: Industry News 

This makes sense, with the fall in home prices we should see smaller loans and that should translate into less loan orgination in general.  It will be interesting to see if we actually meet the MBA’s estimate of 4.8 million homes sold in the U.S. in 2009.

News (Bloomberg):

Mortgage originations in the U.S. may total $2.03 trillion this year, 27 percent less than earlier forecast, as rising interest rates reduce home refinancings, the Mortgage Bankers Association said.

Today’s forecast cuts $700 billion from the Washington- based group’s March estimate, a change MBA Chief Economist Jay Brinkmann said came because the Federal Reserve’s pledge to buy as much as $300 billion in U.S. Treasuries hasn’t been enough to keep Treasury yields and mortgage rates down.

Rates for a 30-year fixed home loan rose to 5.47 percent on June 19, according to Bankrate.com.

“The Fed’s in a difficult spot,” said Kenneth Rosen, chairman of the Fisher Center for Real Estate and Urban Economics at the University of California, Berkeley. “If I were the Fed, I would try very hard to do everything in my power to keep that long-end down.”

The new estimate for 2009 mortgage originations includes about $737 billion for home purchases and $1.297 trillion in refinancings, the mortgage bankers said in a statement.

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