The big year to watch for refinancings of interest-only mortgage loans will be 2007, according to Doug Duncan, chief economist of the Mortgage Bankers Association.Speaking at a news briefing at the group's annual convention in Orlando, he said 2007 is when $15 billion of 3/1 IO loans will reset. Consumers have become good at optimizing the benefits and the timing when they switch mortgage products, he said. In the past, 15% was the traditional baseline for the ratio of refinancings to total production, but now it is around 20%-25% because the cost to restructure a mortgage is much lower, he said. Jay Brinkmann, the MBA's vice president of research and economics, said he has heard of loan officers who go back to their IO clients and solicit them to refinance, but he said consumers are more likely not to act until the trigger date.

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