Freddie Mac economists are expecting a surge in refinancings during the fourth quarter and recently increased their origination forecast for the period by nearly 70%.

In a new outlook piece, the GSE boosted its production estimate to $371 billion for 4Q, compared to a prior estimate in September of $221 billion.

In the third quarter, mortgage bankers funded almost $300 billion of loans.

Freddie Mac chief economist Frank Nothaft sees conventional lending reaching $260 billion in 4Q, compared to $154 billion in the September forecast.

The decline in mortgage rates, especially for FRMs, should trigger an increase in refinancings, Nothaft said.  "We added more than $100 billion to the 2011 fourth quarter for that reason.

Fourth quarter originations of Federal Housing Administration and Department of Veterans Affairs guaranteed loans should total $111 billion, according to the chief economist's forecast – an increase of 65% from the September estimate.

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