Posted by Ronnie_WA on 5/2/11 5:04pm
Msg #381948
LPS/MBS report on loan activity and projections
The LPS report found that mortgage origination activity continues to be dampened, primarily due to ongoing reduction in refinance activity. As interest rates rise and credit requirements remain more exacting, the majority of homeowners eligible to refinance may have already done so.
MBS:We expect declines in refinance activity will be the primary factor impacting our originations forecast for the full year 2011, with total mortgage originations decreasing to $1.07 trillion in 2011. However, we have increased our forecast for refinance originations given the dip in rates associated with global uncertainties. Increases in purchase originations will not be enough to offset the drop in refinances over the year, as mortgage rates reach 5.6 percent by the end of 2011. We expect that the refinance share of originations will drop from 70 percent in 2010 to 48 percent in 2011, and then 24 percent in 2012 as rates climb to 6
percent. We project that originations will be below $1 trillion in 2012.
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