Mortgage originations could take off again in 2008, according to Countrywide Home Loan's chief economist, Jeff Speakes.Noting that loan production has shot higher every five years since the mid-1990s, Mr. Speakes told mortgage brokers meeting at their annual convention in Philadelphia that if they can hold on through next year, brighter days are on the horizon. Of more immediate concern to the economist, however, is the fear that the Federal Reserve Board won't stop ratcheting up short-term interest rates until it goes too far and sends the economy spinning into a recession. Mr. Speakes said he believes the Fed should "stop right here" by bumping the federal funds rate 0.5% at its next meeting in July and "be done with it." He voiced hope that the Fed "will get itself off the treadmill. Otherwise, it's going to overdo it." As for whether the bottom will fall out of the housing market, the economist agreed with most of his colleagues. "No kerplunko," he said. But he warned that price appreciation could slip below income growth for the first time in years. "Not negative. It's never been negative," he told the National Association of Mortgage Brokers. "But in the low single digits."

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