by Calculated Risk on 3/24/2009 10:20:00 AM
Tuesday, March 24, 2009
From Paul Jackson at Housing Wire: MBA: Originations Could Top $2.7 Trillion in 2009
[T]he Mortgage Bankers Association, which said that it had increased its forecast of mortgage originations in 2009 by over $800 billion, due to a refinancing boom ... The MBA said it now expects originations to total $2.78 trillion, which would make 2009 the fourth highest originations year on record, behind only 2002, 2003, 2005.It sounds like the mortgage brokers will be busy this year!
“This boost is due entirely to the expected increase in mortgage refinancing activity motivated by the drop in interest rates following last week’s Federal Reserve’s announcement on the Treasury bond and mortgage-backed securities purchases programs and the Fannie Mae and Freddie Mac refinance programs,” the mortgage lobbying and trade group said in a press statement.
This origination boom, however, will differ from recent years past — while previous record origination years of 2002, 2003 and 2005 had large amounts of subprime loans and jumbo loans, the MBA said it expects 2009 originations to consist almost entirely of conforming and/or FHA-eligible mortgages.
The MBA projected that total existing home sales for 2009 will drop 2.5 percent from 2008 to 4.8 million units, while new home sales will decline a far sharper 39 percent in 2009 to 293,000 units.
This refinance boom will lower the payments for homeowners with conforming loans, but that doesn't help much in the higher priced areas.
Posted by Calculated Risk on 3/24/2009 10:20:00 AM