Duncan: Originations Will Fall Below $2T in '08

Mortgage originations will fall below the $2 trillion level in 2008 for the first time since 2000, Mortgage Bankers Association chief economist Doug Duncan told reporters Oct. 16 during a news briefing at the group's annual convention in Boston.Originations were $2.7 trillion in 2006 and are projected to be $2.3 trillion for this year. Next year, volume will fall to $1.9 trillion, the MBA economist said. Regarding the credit crunch, "if it is all about subprime, why did Cerberus have a problem" getting the funding for its eventual acquisition of Chrysler, Mr. Duncan asked. The real issue, he said, is leverage, although issues with subprime mortgages were the trigger. Mortgage industry job losses will top 100,000 and possibly go as high as 110,000, he predicted. Back in 2004, when there was a brief market slowdown, Mr. Duncan predicted there would be job losses of 80,000. While there were some initial job cuts back then, growth in the asset-backed business led to an increase in employment. Now we are seeing those cuts being made, enhanced by the new hires, he said. The MBA can be found online at http://www.mortgagebankers.org.