Fannie Forecasts Half a Loaf in '04

Mortgage originations will drop by 50% from the third to the fourth quarter, and mortgage lenders can expect loan volume in 2004 to be half of this year's (projected) record $3.67 trillion harvest, according to Fannie Mae economists.Fannie Mae's mortgage market outlook shows loan production dropping from $1.18 trillion in the third quarter to $615.9 billion in the fourth quarter. Meanwhile, Fannie Mae chief economist David Berson is warning lenders that they will have to get used to half a loaf in 2004. He is predicting that loan volume will total $1.75 trillion, down 52% from this year's projected total. "Refinance originations will plunge in 2004 as mortgage rates rise -- down by about 77% to only 590.3 billion," according to the secondary-market agency's latest forecast. Home sales will continue at a strong pace in 2004, but fall short of this year's record. Purchase originations in 2004 will be "close to this year's estimated record of $1.17 trillion," Fannie said. Fannie Mae can be found online at http://www.fanniemae.com.