Given stable mortgage rates at recent levels (6.75% to 7%), we believe that refinance activity will begin to subside by spring and will decline by 50% in 1994 from 1993 levels - and by another 60% between 1994 and 1995.

We estimate that refis would fall from $535 billion this year to $265 billion in 1994 and to $115 billion in 1995, a decline of 80% from peak 1993 levels. We expect total originations to drop from $ 1 trillion this year to $770 billion in 1994 and $640 billion in 1995, a decline of just 35% from this year's peak.

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