Mortgage Daily

Published On: February 21, 2012

A key outlook for home-loan originations during the first three months of 2012 was raised, though business is expected to fall for the rest of the year. There is no end in sight for continued contraction in the country’s collective outstanding mortgages.

Last year’s final tally for U.S. residential originations was $1.362 trillion, according to Fannie Mae’s Housing Forecast: February 2012. Lenders saw less production than the $1.701 trillion closed during 2010.

In the three months ended March 31, the secondary lender projects that $300 billion in mortgages will have been funded, an upward revision from the $290 billion predicted in last month’s outlook. But volume is expected to stumble each quarter for the rest of the year to $222 billion by the fourth quarter.

The full-year 2012 forecast was lifted to $1.051 trillion from the previous projection of $1.011 trillion. Next year’s business is expected to come in at $1.053 trillion.

First-quarter refinance share will sink from 69 percent to 49 percent in the second quarter, the report said.

Full-year refinance share will go from two-thirds last year to 54 percent this year then drop to 39 percent in 2013.

Home loans outstanding will decline from $10.272 trillion as of end of last year to $10.222 trillion this quarter then fall to $10.161 trillion by Dec. 31. When the end of 2013 rolls around, just $10.079 trillion will be outstanding.

The March 31, 2012, figure included $9.367 trillion in first liens, down from $9.403 trillion at the end of last year.

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