Lenders living off of refinancings will be sorely disappointed by a new forecast from Fannie Mae. The GSE sees refinancings falling to just 34% of total production in fourth quarter, the lowest reading in almost a decade. (The third quarter of 2008 was a near disaster for refinancings with a reading of 38%, according to figures compiled by the Quarterly Data Report. In 3Q08 the stock market was about to begin a freefall with Fannie being taken over by the government and several other large financial firms failing or teetering.) In the first quarter of this year, refis accounted for 65% of residential fundings. Last year refis accounted for 67% of production.
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