The proposed amendments to FAS 65, Accounting for Certain Mortgage Banking Activities, will level the playing field between retail and wholesale lenders, but experts say the changes, if adopted, will also exacerbate existing price wars among the largest mortgage banking players.

Because retail originations will result in larger marketing gains, companies with newly increased origination margins may become more price competitive, especially in a declining origination market, contends David S. Dusenbury, an analyst with Salomon Brothers in a report titled, Mortgage BankingBeyond the Refinance Wave.

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