Fannie Gets More Bearish on '04 Production

Blaming rising mortgage rates, Fannie Mae has cut its residential origination forecast for this year and next, predicting that production will plunge by a stunning 56% in 2004.The mortgage giant believes that refinancings will fall to $400 billion next year but that the "purchase money" market will remain strong. Fannie Mae is now forecasting production of $1.5 trillion for 2004, down from a recent forecast of $1.7 trillion. Earlier, it had forecast about $2 trillion. Fannie's downward revision comes a day after the Mortgage Bankers Association of America cut its origination forecast for this year and next. The MBA believes production will total $1.5 trillion next year and $3.2 trillion this year. Fannie is predicting $3.4 trillion for this year. According to figures compiled by National Mortgage News, lenders funded $2.03 trillion through the first six months of the year. (See the Aug. 18 issue of NMN for more details.)