Lending Tree chief economist Cameron Findlay recently sat down with Fox Business News to give them his mortgage rates forecast, predictions for the mortgage refinance market and more. Cameron says economic conditions lead him to expect mortgage rates will rise 180 basis points to 6% by the first quarter of 2011. Higher interest rates surely factor into his calculations for mortgage refinance volume in the first quarter of 2011, which he expects will be down a staggering 80%. Affecting the mortgage market and housing market right now are higher fees being imposed by FHA to counter rising default rates. Also hampering refinance and purchase origination are new RESPA disclosure laws adding some bumpiness to the road to a new loan. FHA who in the past few months and really the last year make up a large percentage of origination’s for the purchasing of homes, is expected to ask the governement for 400 billion dollars. Despite FHA’s percieved cash flow problem expect them to continue to gain market share in newly originated loans especially as refinance fades.
This video talks about all this and more. Click to play.