Mortgage Originations in 2012 Could See Lowest Volume Since ’97

Mortgage originations may surpass initial estimates for 2011, but the the outlook for 2012 is weaker, and is expected to be the lowest volume since 1997, according to the Mortgage Bankers Association’s Economic and Mortgage Finance Forecasts, released Friday.

The MBA’s forecast projects $1.1 trillion in residential mortgage origination in 2011, which is roughly $100 million more than initially forecast. However, MBA also revised its outlook for 2012 with a  $30 billion reduction to $931 billion—the lowest in nearly 15 years.

“We have lived through a series of unprecedented events over the past month:  the debt ceiling crisis, S&P’s downgrade of US Treasury debt, the ongoing sovereign debt crisis in Europe, a commitment by the Fed to keep rates near zero for the next two years and stock market volatility that has reached levels not seen since the fall of 2008,” said Jay Brinkmann, senior vice president of research and education and chief economist for MBA. “While there is substantial uncertainty about how these events will impact consumer and business behavior, we do not believe that the economy is facing the same types of risks as in 2008.”

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The sliver lining, Brinkmann said, is that mortgage rates are approaching historic lows, with low rates continuing to boos refinances above earlier projections.

“Relative to our prior forecast, we have boosted our refinance forecast estimate for 2011 to $697 billion, up almost $100 billion, and increased our refinance estimate for 2012 by more than $150 billion, to $400 billion,” he said.

Written by Elizabeth Ecker

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  • As to HECMs, with case number assignments for June, 2011 and July, 2011 running at 9% lower than last year, the applications for the next fiscal year are already running behind the same total last year.  So while it is shaping up that industry endorsements will be down next fiscal year from where we are this fiscal year, our totals should be higher than in 2005.  Through ten months of this fiscal year we are less than 62,000 endorsements and the total is 4,800 endorsements lower than for the same ten month period last fiscal year.  

    There is real question if the endorsements for this fiscal year will reach 75,000. Last fiscal year they were about 79,000.

    Applications which receive assignments in June and July of this year and eventually get endorsed will generally be endorsed in the last quarter of this calendar year.  Right now endorsements for the seven months ended July 31, 2011 is running about 1,600 ahead of the endorsements for the same seven month period last year.  

    With fewer applications with assignment numbers in the endorsement process than at this time last year, unless there is substantial increase in case number assignments this month, it is doubtful if  the endorsements for this calendar year will even reach 72,000.  They were about 72,700 for calendar year 2010.  Some are even questioning if endorsement totals for the current calendar year will reach 70,000.

  • As to HECMs, with case number assignments for June, 2011 and July, 2011 running at 9% lower than last year, the applications for the next fiscal year are already running behind the same total last year.  So while it is shaping up that industry endorsements will be down next fiscal year from where we are this fiscal year, our totals should be higher than in 2005.  Through ten months of this fiscal year we are less than 62,000 endorsements and the total is 4,800 endorsements lower than for the same ten month period last fiscal year.  

    There is real question if the endorsements for this fiscal year will reach 75,000. Last fiscal year they were about 79,000.

    Applications which receive assignments in June and July of this year and eventually get endorsed will generally be endorsed in the last quarter of this calendar year.  Right now endorsements for the seven months ended July 31, 2011 is running about 1,600 ahead of the endorsements for the same seven month period last year.  

    With fewer applications with assignment numbers in the endorsement process than at this time last year, unless there is substantial increase in case number assignments this month, it is doubtful if  the endorsements for this calendar year will even reach 72,000.  They were about 72,700 for calendar year 2010.  Some are even questioning if endorsement totals for the current calendar year will reach 70,000.

  • As to HECMs, with case number assignments for June, 2011 and July, 2011 running at 9% lower than last year, the applications for the next fiscal year are already running behind the same total last year.  So while it is shaping up that industry endorsements will be down next fiscal year from where we are this fiscal year, our totals should be higher than in 2005.  Through ten months of this fiscal year we are less than 62,000 endorsements and the total is 4,800 endorsements lower than for the same ten month period last fiscal year.  

    There is real question if the endorsements for this fiscal year will reach 75,000. Last fiscal year they were about 79,000.

    Applications which receive assignments in June and July of this year and eventually get endorsed will generally be endorsed in the last quarter of this calendar year.  Right now endorsements for the seven months ended July 31, 2011 is running about 1,600 ahead of the endorsements for the same seven month period last year.  

    With fewer applications with FHA Case Number assignment in the endorsement process than at this time last year, unless there is a substantial increase in case number assignments this month, it is doubtful if  the endorsements for this calendar year will reach 72,000.  They were about 72,700 for calendar year 2010.  At least one cynic is questioning if endorsement totals for the current calendar year will reach 70,000.

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