Nearly 50% of small- and medium-size banks and thrifts expect to see an increase in single-family originations in 2005, compared to 2004, while only 21% expect a decline, according to a real estate lending survey by the America's Community Bankers.The majority of 533 banks and thrifts responded to the ACB in November and December and it appears the upbeat expectations reflect a reduction in refinancing activity coupled with a strong home purchase market, according to ACB managing director Robert Davis. The survey also found that respondents increased their adjustable-rate mortgage production from 21% in 2003 to 30% in 2004 and reduced their loan sales into the secondary market from 50% in the 2003 to 43% in 2004. For depository institutions with more than $1 billion in assets, originations of 5/1 hybrid ARMs increased from 10% of loan production in 2003 to 15% in 2004. Meanwhile, the percentage of loan sales to wholesalers and conduits increased to 35% in 2004 from 22% in 2003, while the banks and thrifts reduced their sales to Fannie Mae and Freddie Mac from 32% in 2003 to 18% in 2004.

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