Purchase and refinance mortgage originations could decline by as much as 33% over the next two years, as the full impact of the sub-prime credit shock and fallout is not yet seen as bottoming out in the immediate near term, says the Mortgage Bankers Association.

In his general presentation to the MBA's 94th Annual Convention and Expo in Boston, MBA Chief Economist and SVP Doug Duncan said that: "among other uncertainties we face are the impact of sharply higher energy costs, the impact on inflation from higher import prices due to the falling dollar, and the impact of uncertainty over the tax policies coming out of Washington. The underlying fundamentals of the economy, however, should be strong enough to get us past this period so that economic growth should return to normal levels by the second half of 2008."

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