Today the Mortgage Bankers Association put out a revision in its 2009 originations forecast. A big revision. A $700 billion revision. “$84 billion of the drop is due to lower purchase originations and the rest is due to lower rate/term refinances and very low volumes in the Fannie Mae and Freddie Mac Home Affordable Refinance Program (HARP).” That’s big too.

The MBA had raised its forecast by over $800 billion in March following the drop in interest rates associated with the Fed’s announcement on the Treasury bond and mortgage-backed securities purchases programs as well as the implementation of the HARP. But at the time it warned that rates might not stay low, and guess what? They didn’t.

The refi’s dropped off for two reasons, one being the interest rate rise, and the second being the poor results on the HARP. Now we’ve been discussing this a lot here on the blog, specifically that interest rates in the 5’s don’t do much for the refi market, because an awful lot of borrowers already refi’d during the housing boom in the 5’s. But it may be even more than that, i.e. eligibility issues.

“While generally accepted estimates were that around 1.5 to 2 million borrowers might avail themselves of this program, with many more potentially eligible, to date only about 13,000 loans have been completed,” notes the MBA’s chief economist, Jay Brinkmann. “It is difficult to craft a scenario under which origination volumes would come anywhere close to reaching the numbers originally envisioned for the program, particularly under our higher rate environment.” Hate to toot the blog’s horn, but we had that last week.

The MBA also lowered its purchase mortgage originations estimate, citing bigger-than-expected home price drops and a larger share of distressed sales to investors, the bulk of whom pay in cash.

Oh and one more thing: “The MBA forecast is for increasing interest rates through the end of the year and through 2010.”

A lot of folks out there contend that I am overly bearish on the beat I cover. Some go so far as to call me “miserable,” while others claim I choose to see the glass half empty. I am and do neither. I’m not a bear; I’m a realist. It’s your right to have an opinion, but it’s not my job. My job is to gather for you and funnel to you the facts: The numbers, the trends, the industry forecasts and the experts’ analyses. I have no agenda and frankly gain nothing from being either a bull or a bear. If anything, I’d be better off personally as a housing bull. CNBC doesn’t allow me to own stock, but I can own a house, and I do. If you think housing has bottomed, that’s your opinion, but that’s just what it is: Opinion.

Questions?  Comments?