Industry NewsMortgage

Bloom is off the refi boom

MBA backs off forecasted surge in lending

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Rising interest rates and a slow start to the Obama administration's Making Home Affordable loan refinance program have the Mortgage Bankers Association retreating from an earlier prediction of a big surge in mortgage originations in 2009. In March, the MBA boosted its forecast for 2009 mortgage originations by $824 billion, saying it expected $1.96 trillion in refinancings would push total loan originations to $2.78 trillion. Now, the MBA is taking back more than $700 billion of that projected increase, saying refinancings will total closer to $1.3 trillion and that total originations will barely break the $2 trillion mark. With the government on a path to issue billions in Treasuries to finance record budget deficits, investors have shied away from purchasing government debt because of fears of inflation and a decline in the dollar, the MBA said. That's driving up long-term interest rates, including mortgages, and has cooled the demand for refinancings. Another factor driv...