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Kroll expects lending volumes to rise in H2'16

The second half of 2016 will see strong loan origination volumesoverall, partly due to falling interest rates driving refinancing, albeit less thanexpected, as well as continued growth in mortgage loans for new home purchases,Kroll Bond Rating Agency wrote in a July 12 research report.

Mortgage Bankers Association, in its June 20 mortgagefinance forecast report, estimates mortgage originations to be approximately$1.663 trillion in 2016, slightly up from $1.630 in 2015.

Kroll also noted that loan volumes have continued to drop bybanks, while lending by non-banks has increased more than proportionately, particularlyto lower-quality borrowers.

According to data from the International Center on Housing Risk,lending to borrowers with FICO scores below 700 has increased dramatically, withthe government-sponsored enterprises, such as Fannie Mae and FreddieMac, up 27% year over year through May,and Government National Mortgage Association,or Ginnie Mae, up 21% year over year.