Tight credit conditions, higher mortgage rates and a big drop in refinancings will push residential originations below $1 trillion this year to levels not seen since 2002, according to economists at the Mortgage Bankers Association.

MBA chief economist Jay Brinkmann estimates lenders will originate $966 billion in single-family loans in 2011, down 35% from 2010.

He told reporters that he reduced his estimate somewhat because of the impact of loan-repurchase requests lenders are receiving from Fannie Mae, Freddie Mac, and the mortgage insurers. "That will continue to hold down originations," Brinkmann said Jan. 26 during an MBA press briefing on the state of the mortgage industry.

Brinkmann is forecasting that purchase originations will total $614 billion this year, up from $473 billion in 2010. But refinancings will drop to $352 billion in 2011, down 66% from last year.

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