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FBR’s Market Forecast Brightens After Predictions of Slow Quarter

After ""recently reporting"":https://themreport.com/articles/fbr-origination-slow-in-q1-2013-outlook-still-bright-2013-04-09 predictions of declining originations, ""FBR Capital Markets & Co.,"":http://www.fbr.com/ now says the market looks a little brighter, and a resurgence of refinances through the Home Affordable Refinance Program (HARP) will contribute to originations volumes this year.


While FBR maintains its prediction that origination volume will be lower than the volumes recorded in the second half of last year, the company now suggests originations ""will largely be better than the 20-25 percent drop-off we projected late last week.""

Overall, the firm ""remain[s] confident that despite near-term setbacks, mortgage banking will continue to be a boon for revenues throughout the year.""


First-quarter originations at the GSEs totaled $355 billion, an increase from the $352 billion in the fourth quarter of last year. FBR estimates the entire market produced between $450 billion to $500 billion in the first quarter of this year.

FBR anticipates a rebound in HARP volume as the government increases its marketing efforts surrounding the program and as small and mid-sized banks continue to work through their stocks of eligible loans. These smaller institutions ""are still playing catch-up as demand has exceeded capacity,"" FBR said.

FBR says significant originations declines at one large bank may prompt some pessimism in the market, but FBR sees the decline in a different light.

Wells Fargo decreased its market share by about 42 percent between the first quarter of 2012 and the first quarter of 2013. However, FBR points out, ""the company has long signaled this move.""

Furthermore, ""[w]e believe that Wells Fargo's loss is the market's gain,"" FBR said.

Several originators stepped up to claim that gap left by Wells Fargo. JPMorgan increased its origination share by 25.6 percent in the first quarter of this year. PNC Bank increased its share by 28.9 percent; Fifth Third Bank increased its share by 46 percent, and Citigroup increased its share by 46.1 percent.

About Author: Krista Franks Brock

Krista Franks Brock is a professional writer and editor who has covered the mortgage banking and default servicing sectors since 2011. Previously, she served as managing editor of DS News and Southern Distinction, a regional lifestyle publication. Her work has appeared in a variety of print and online publications, including Consumers Digest, Dallas Style and Design, DS News and DSNews.com, MReport and theMReport.com. She holds degrees in journalism and art from the University of Georgia.

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