Mortgage lending to hit 14-year low, MBA says

By Dow Jones Newswires
Posted Jan. 26 at 11:33 a.m.

U.S. mortgage lending is projected to sink 36 percent this year to the lowest level since 1997, a trade group said Wednesday.

The Mortgage Bankers Association forecast new loans will fall to $966 billion in 2011 from $1.5 trillion this year.
MBA said the drop is mostly due to high unemployment and borrowers’ diminished credit coming out of the recession, with  concerns about loan buy-backs also having an effect.

MBA Chief Economist Jay Brinkmann said lenders are not willing to take on the risk that they’re going to have to re-purchase loans.

Insurers and private buyers of bank mortgages have been pushing banks to repurchase some loans they say don’t meet underwriting standards. Earlier this month, Bank of America agreed to buy back almost $3 billion of bad mortgages, but there are billions of dollars in buy-back requests for Bank of America alone.

MBA predicted that existing-home sales would fall 0.9 percent in 2011, to 4.8 million, and new home sales would rise 10 percent, to 351,000 homes.

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One comment:

  1. jack (me) Jan. 26 at 11:41 a.m.

    Also, I’m sure that anyone who could have refinanced already has done so, and will not again, given all the wringers the mortgage companies put them through.