The second half is beginning to look like a spectacular one for the mortgage business, partly because last year's second half was so weak.

David Berson, chief economist at the Federal National Mortgage Association (Fannie Mae) is expecting mortgage originations to reach $400 billion in the second half this year. Last year, with lending in a slump as rates climbed, originations dove to about $297 billion.

This means that if Mr. Berson's expectation is correct, the industry as a whole will be showing a gain of about a third in mortgage volume. At the same time, the shift toward fixed rates likely means a gain in market share for mortgage banking companies at the expense of adjustable-rate lenders such as banks and thrifts.

The outcome: publicly held mortgage companies such as Countrywide Credit Industries and North American Mortgage Co. could be reporting year-to-year gains of 40% or more in loan fundings.

And it could happen quickly, at least for Pasadena, Calif.-based Countrywide. For June, Countrywide reported a 30% gain in fundings over the level a year earlier.

At Santa Rosa, Calif.-based North American, the June gain was 9%. But John F. Farrell 2d, chairman, said the gains were almost entirely retail. He said the improvement should widen as normally lagging broker volume begins to flow in.

Countrywide's monthly originations ranged between $1.9 billion and $2.2 billion in the second half of last year. In May and June, fundings amounted to $2.55 billion and $2.77 billion respectively, and its pipeline of applications in process has been climbing. So it won't take much further growth to push volume 50% above last year's in coming months.


The annual convention of the Mortgage Bankers Association will be in San Diego this fall, but the daily sessions will retain a distinctly Washington flavor.

Former President George Bush will address the opening session. William J. Bennett, formerly director of the Office of National Drug Policy and chairman of the National Endowment for the Humanities, will give the luncheon speech the same day.

Mary Matalin and James Carville, the husband-and-wife team of political speech writers, will start things off the next day. And Michael Kinsley and John H. Sununu, now co-hosts of CNN's Crossfire program, will take the platform on the third day.

Things will get started with an evening reception on Sunday, Oct. 22, and run until noon Oct. 24.

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