
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, October 28, 1993                   TAG: 9310280160
SECTION: BUSINESS                    PAGE: B-6   EDITION: METRO 
SOURCE: Orlando Sentinel
DATELINE: CHICAGO                                LENGTH: Medium

HOME LOANS GO FOR BROKE

Boosted by the tidal wave of home loan refinances, mortgage lending this year is expected to exceed $1 trillion for the first time, lenders reported this week.

Estimates of lending volume this year ranged as high as $1.1 trillion.

Mortgage rates at 25-year lows have fueled the refinancings, but new purchases have been relatively stagnant because of the slow economic recovery, said delegates to the Mortgage Bankers Association of America convention.

Business done by the major secondary market buyers of home loans reflects the tilt toward refinancing. Leland Brendsel, chief executive officer of the Federal Home Loan Mortgage Corp., known as Freddie Mac, said nearly 60 percent of the company's loan purchases this year will involve refinanced mortgages.

The Federal National Mortgage Association, known as Fannie Mae, is doing about the same amount of business in refinancing. Brendsel thinks interest rates are not likely to go much lower and the refinancing binge will wane next year.

"I think we may have seen the last great wave of refinancing," he said.

Brendsel projected Freddie Mac's refinancing purchases next year at 45 percent of its business.

Consumers this year have overwhelmingly opted for 30-year and 15-year fixed-rate loans, said Janet Shatz, Fannie Mae's vice president of marketing.

In September, more than 87 percent of Fannie Mae's loan purchases were 30-year and 15-year mortgages. The 30-year loan accounted for 57.3 percent of Fannie Mae's purchases in September.

Nearly two-thirds of the lenders Fannie Mae deals with now offer 20-year fixed-rate loans. Shatz said they accounted for 3.1 percent of Fannie Mae's purchases in September.

Shatz said 10-year fixed-rate loans also are gaining favor with home buyers. In the first three quarters of this year, Fannie Mae bought $2.5 billion in 10-year mortgages, a 71 percent increase over the first three quarters of last year.

by CNB