The Mortgage Bankers Association expects purchase originations to fall 6.7 percent from 2006 to $1.29 trillion this year on the slump in housing sales and refinancing volume to tumble 16 percent to $918 billion in the face of higher borrowing costs and a slowdown or decline in property appreciation.

Overall, the group predicts that home-loan origination will total $2.21 trillion in 2007, off 11 percent from last year, before sliding another 7.4 percent to $2.05 trillion in 2008.

The industry will adjust to the changing marketplace by slimming down the work force, consolidating, and modernizing.

"After every good party, there's a hangover," notes Freddie Mac deputy chief economist Amy Crews Cutts. "The guys who got into being a mortgage broker because easy money fell out of [the] sky are going to get pushed out by the ones who really know how to earn it. I would anticipate seeing, as banks merge, and servicing offices merge, a greater emphasis on technology."

Source: Inman News, Matt Carter (01/10/07)