Mortgage-related mergers and acquisitions should pick up a head of steam this year, according to a new report from Milestone Advisors.

The good news for buyers of mortgage companies is that "Asset yields and credit fundamentals on new originations are among the best" mortgage lenders have ever seen, Milestone writes in its report.

Of course, most housing and mortgage economists are predicting a challenging year for lenders with residential production falling to an estimated $1 trillion to $1.2 trillion (range) this year compared to $1.6 trillion in 2010.

Refinancing volumes, as expected, are falling, though there appears to be growing signs of life in the purchase money sector.

According to figures compiled by National Mortgage News, and the Quarterly Data Report, refinancings accounted for 77% of fundings in the fourth quarter, the highest reading over the past three years.

In 2010 Milestone completed 17 investment banking-related deals including M&A, capital raises, and FDIC purchases.

The firm, which has offices in Florida and Washington, D.C., believes the nation's financial crisis has "stressed the capabilities of many business platforms, and businesses that have managed through the credit cycle are now facing opportunities to acquire competitors and asset portfolios at highly attractive economic terms."

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