Private-label, subprime mortgage originators will have a more difficult time selling Wall Street investors risky loans in 2007, experts say, even as they face tougher underwriting and disclosure standards from regulators. But don't expect "exotic" loans to become extinct as the mortgage lending industry copes with slackening demand for all types of loans through layoffs, consolidation and modernization. The Mortgage Bankers Association projects home loan originations will fall 11 percent this year, to $2.21 trillion, followed by an additional 7.4 percent decline to $2.05 trillion in 2008. By comparison, lenders funded $3.03 trillion in mortgage loans in 2005, the second-highest year on record, and an estimated $2.48 trillion in 2006. A slowdown in home sales is likely to translate into fewer home purchase loans, while rising interest rates and slower or negative home price appreciation could also make refinancing less attractive to many borrowers. MBA economists expect purchase o...
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