Mortgage bankers are lowering their expectations for 1996. A new survey has found they still anticipate decent results, but they are setting their sights below the relatively bullish volume they had envisioned at the beginning of the year.

Conducted in the second quarter by Holm Mortgage Finance Report, the survey asked 100 executives at mortgage companies to assess the industry and the economy.

The lenders said they were scaling back their production estimates in response to changed market conditions, said Jon Holm, editor of the Milwaukee-based publication.

Seventy-seven percent said their volume has dipped since March, when interest rates rose unexpectedly. Thirty-five percent said the entire market had softened; 24% indicated loans under $125,000 had fallen off; and 18% said mortgages over $250,000 had weakened.

The shift has fewer bankers believing they can top 1995's volume. While 68% of lenders polled in the first quarter said they would exceed 1995 originations, only 59% expect gains now.

More lenders are also expressing diminished confidence in the economy. Only 27% of mortgage bankers polled in the first quarter expected a slowdown in the second half, an outlook now shared by 82% of lenders.

The expectations of reduced volume are being corroborated by reports from the field. Countrywide Home Loans, Pasadena, Calif., and North American Mortgage Co., Santa Rosa, Calif., have both reported slowdowns in volume recently.

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