SCME launches non-prime division

MBA releases new mortgage finance forecastMortgagePress.comMortgage originations,interest rate The Mortgage Bankers Association has released its monthly update of its Mortgage Finance Forecast. MBA is projecting $2.4 trillion in mortgage originations in 2004, down from its previous estimate of $2.6 trillion. MBA said that a rising interest rate environment will cut into refinancings in 2004, but home purchases will remain strong. MBA now projects that the 10-year Treasury rate will increase from four percent in the first quarter to 4.9 percent in the fourth quarter, averaging 4.5 percent for the year. Mortgage rates will increase correspondingly; the average 30-year fixed mortgage rate will increase to 6.4 percent in the fourth quarter, from 5.6 percent in the first quarter. While higher interest rates are expected to cause a slight moderation in overall home sales and residential building in the months ahead, MBA is forecasting a record number of new home sales and only a slight decline in existing home sales. MBA expects that the fall in refinance originations will be faster than expected because of a more rapid increase in interest rates than previously forecasted. Refinancings will total $1 trillion, down from the previously forecasted $1.2 trillion. Mortgages for purchasing homes will make up 57 percent of total originations, or $1.4 trillion. The volume of adjustable-rate mortgages will likely rise as more households choose to use ARMs to manage affordability. Approximately 33 percent of the total number of conventional purchase loans will be ARMs.