We expect the mortgage market's health to improve from good to robust this year, because we see rates, especially on the short end, continuing to decline. Hence, 1996 should be a very solid year for mortgage lenders.

Even so, a repeat of last year's stunning rise in stock prices won't take place. This year, we expect the shares of selected mortgage lenders to rise 10% to 20%. Some shares, particularly those of mortgage bankers and Fannie Mae and Freddie Mac, may well exceed those estimates if there is a refinancing boom.

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