The mortgage market will get much more competitive this year, as the level of refinancings wanes and purchase loans drive the market, according to one analyst. Tom Wind, managing director of J.I. Kislak Mortgage, expects the refinancing activity to fall to $350 billion in 2011 from $1 trillion last year. The former chief executive of JPMorgan Chase’s (JPM) residential mortgage lending businesses and former president and chief operating officer of Citi's (C) mortgage unit also expects jumbo-loan lenders to slowly start coming back to the market this year. But "the industry is still married to Fannie and Freddie" and still "a long way from functioning in a non-agency market," Wind said. He expects the monumental change in the regulatory framework for the mortgage market this year to result in the lenders likely making 30% to 40% less on each loan origination. "Couple this with significantly less loan volume and there will be some major shifts ahead," Wind said. "However, there is light at the end of the tunnel. Moderate interest rates and lower prices are driving affordability, which will ultimately stabilize homeownership as a good, long-term investment." He also expects increased availability of credit to start create more home-purchase opportunities for borrowers. Kislak is a Florida-based mortgage banker. Write to Jason Philyaw.