|While forecasts for government originations this year have increased, projections for conventional production sank.U.S. residential originations were $0.405 trillion during the third quarter, according to revised estimates in Freddie Mac’s November Economic Outlook. Last month’s outlook had third-quarter production at $0.400 trillion.
The revised projection has fourth quarter volume tumbling to $0.325 trillion from last month’s estimate of $0.380 trillion. An analysis of earnings data by MortgageDaily.com indicated that third-quarter residential originations tumbled 31 percent from the second quarter.
For all of 2008, residential originations are estimated to amount to $1.786 trillion, Freddie said in its latest outlook — down from $1.836 trillion estimated a month earlier. Next year’s production is projected at $1.650 trillion, down from last month’s projection of $1.920 trillion.
The lowered expectations were driven by conventional business, which was forecast at $0.315 trillion for the third quarter, $0.245 trillion for the fourth quarter and $1.310 trillion for 2009 in Freddie’s November report.
October’s report had conventional originations at $0.315 trillion during the third quarter, $0.305 trillion in the fourth quarter and $1.620 trillion next year.
Government volume, which includes the origination of loans insured by the Federal Housing Administration or guaranteed by the Department of Veterans Affairs, is projected at $0.090 trillion in the third quarter, $0.080 trillion in the fourth quarter and $0.286 trillion for all of 2008. Government business is expected to reach $0.340 next year.
Last month, Freddie projected government activity would be $0.085 trillion in the third quarter, $0.075 trillion in the fourth quarter and $0.300 trillion for all of 2009.
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