Mortgage brokers slash 2009 forecast

Today the Mortgage Bankers Association put out a revision in its 2009 originations forecast. A big revision. A $700 billion revision. “$84 billion of the drop is due to lower purchase originations and the rest is due to lower rate/term refinances and very low volumes in the Fannie Mae and Freddie Mac Home Affordable Refinance Program (HARP).” That’s big too.

The MBA had raised its forecast by over $800 billion in March following the drop in interest rates associated with the Fed’s announcement on the Treasury bond and mortgage-backed securities purchases programs as well as the implementation of the HARP. But at the time it warned that rates might not stay low, and guess what? They didn’t.

The refi’s dropped off for two reasons, one being the interest rate rise, and the second being the poor results on the HARP.>SOURCE: CNBC