Unlike two previous waves of refinancing applications, the current surge has a good chance of actually driving up loan volume.

That is because benchmark Treasury rates have fallen steeply, and a concerted effort by the government to add liquidity to the market is expected to keep mortgage rates low, analysts said. On Nov. 25 the Federal Reserve Board said it would buy up to $600 billion of debt and mortgage-backed securities issued by government-sponsored enterprises.

"Treasury yields are just getting so low that it does seem that we're going to have a sustained refinance boom," said Tom Millon, the chief executive of Capital Markets Cooperative, a Ponte Vedra Beach, Fla., provider of secondary marketing services to banks. "How long the boom lasts probably has more to do with how many loans are truly refinance-able."

The Treasury Department is reportedly developing a separate plan to bring mortgage rates down to 4.5%, but it appears that program would not apply to refis.

Compared to this year's previous two application spurts in January and September, "this one just feels more sustainable," Mr. Millon said.

To be sure, numerous factors could cause rates to seesaw. And borrowers continue to face the fundamental challenges of falling home prices, insufficient equity and stiff credit criteria.

Orawin Velz, the associate vice president of economic forecasting at the Mortgage Bankers Association, called the Fed's plan a "big deal." However, she advised against reading too much into last week's tripling of application volume, as measured by the trade group's index.

In a report published after the announcement of the Fed program, analysts with Barclays PLC's investment bank in New York projected that it would spur "a significant increase in refinancing activity," and possibly "a mild refinancing wave" similar to the one in 2004 if rates fall further, which they said was likely in view of the size of the planned MBS and agency debt purchases.

Rates on outstanding mortgages are similar to those at the beginning of 2004, and rates on offer are approaching their level then, the Barclays analysts wrote.

On the other hand, rates already neared 2004's lows in January and in September — the month the government seized Fannie Mae and Freddie Mac — without triggering comparable refi volumes. It would take another 50-basis-point drop in rates to produce a wave akin to the one in 2004, the Barclays analysts wrote.

Paul Miller, an analyst at Friedman, Billings, Ramsey & Co., said, "We're not going to see an '03, '04 or '05-type refi boom" as a result of the recent rate drop. "But it's going to increase originations."

Because only the agency mortgage market is functioning and because of borrower qualification hurdles such as insufficient equity and tighter underwriting, "it's not going to be the broad-based refi booms we've seen in the past," Mr. Miller said.

Gerard Cassidy, an analyst at Royal Bank of Canada's RBC Capital Markets, was more skeptical about the prospects for refi production.

"The fall in rates and the expectation that rates could fall further will lead to a continuation" of high numbers of refinancing applications, Mr. Cassidy said. But falling home prices and tight credit will once again largely block actual originations, he said.

Application numbers have also been boosted by borrowers approaching several lenders simultaneously, Mr. Cassidy said.

Ms. Velz said there was also reason to believe that the drop in mortgage rates in September would be longer-lived. "It was a big event when Fannie and Freddie were placed under conservatorship," she said.

"In theory" the Fed program should keep mortgage rates low for a while. However, "the conservatorship, in theory, should keep rates low as well, but it didn't."

In her most recent forecast, on Nov. 12, Ms. Velz cut her projection of refi volume for next year's first quarter by 4% from her September estimate, to $157 billion, because of the rate rebound. She said she would revise it upward because of the Fed program, but cautiously.

Gregg Formigoni, a vice president of mortgage lending at the $245 million-asset Illini Bank in Springfield, Ill., said he is expecting another refi wave.

"The [rate] drop last week definitely has increased our application volume. We already have closings stacked up for around Christmastime from the [rate] locks at Thanksgiving," Mr. Formigoni said.

There were several points this year when rates dropped for a day, and "by the time we published rates and told our customers and they moved to lock, the market had already moved up again," he said.

"It seems to be holding this time at least a little bit. The only concern is things are so fickle right now, you're almost afraid for the next news report and things could change."

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