Fannie Trims Originations Forecast

Fannie Mae chief economist David Berson has trimmed his 2003 originations forecast from $3.7 trillion to $3.4 trillion."The drop in refinancing activity drove the downward revision," Mr. Berson wrote in a weekly commentary on Fannie Mae's website. "Our forecast of purchase originations is down very modestly for the rest of the year, as we continue to believe that home sales and prices will moderate in the second half of the year." He blamed the rapid rise in rates in part on "certain investors unwinding poorly placed bets on the yield curve" and said he believed there was "panic selling" in the fixed-income market. "As investors regain their perspective and look more to the economic fundamentals and less to the technicals, it would not be surprising if long-term rates come down a bit in the weeks ahead," Mr. Berson said. Fannie Mae can be found online at http://www.fanniemae.com.