The business of originating new mortgages ranges between big and huge, driven by home purchases and refinancing of existing home mortgages.  Underlying this activity is, of course, home ownership – a core American value – with approximately 65% of all Americans¹ owning their own home, with many of the rest wishing they did!  Although the real estate and mortgage industries have been in a downturn over the past few years caused by overarching conditions in the economy and the housing industry, population increases naturally drive home purchases, and therefore origination volume, steadily upward over time.  The other component of mortgage volume, refinancings, are driven by existing homeowners' desire to lower the rates and terms of their mortgages, or increase the amount of their borrowings. 

It is anticipated that $1.1 trillion in new mortgages² (approximately 5 million loans), will be originated nationwide in 2012. This represents a low point over the last 10 years, which saw an average of 10 million new loans funded each year.  Many observers believe we are close to a low point in cyclical origination volume, and that, driven by population growth, improved home affordability resulting from home price declines, and pent-up demand, mortgage volume will begin to increase again in the next few years.

1 U.S. Census Bureau, Housing and Household Economic Statistics Division

2 Composite forecast of Fannie Mae, Freddie Mac and the Mortgage Bankers Association for 2012