U.S. residential mortgage originations are expected to plummet 40 percent in 2010 to their lowest level in a decade, eclipsing a forecast drop made just one month ago, the industry’s main trade group said Tuesday.
Lenders will underwrite $1.28 trillion in home loans this year, down from $2.11 trillion in 2009, the Mortgage Bankers Association said in its latest forecast. That would be the lowest since $1.14 trillion in 2000.
The forecast was downgraded from December, when the MBA predicted originations would fall about 24 percent.
The forecast decline is worse than what Chase Home Mortgage, one of the largest U.S. lenders, had seen in October.
Itsts chief executive officer, David Lowman, had forecast mortgage originations falling to about $1.5 trillion, saying that a rise in interest rates from record lows would bring mortgage originations “to a pretty hard stop.”Interest rates are expected to rise when the Federal Reserve completes its pledge to support the mortgage securities market with $1.25 trillion in purchases. …
via US Mortgage Originations Seen Plunging in 2010 – CNBC.
What is a Mortgage origination?
The making of a new mortgage, including all steps taken by a lender to attract and qualify a borrower, process the mortgage loan, and place it on the lender’s books. – id
In other words, there will be far fewer people getting home loans this year. Therefore, we should definitely all ________.