Expect another year of somewhat depressing economic outlooks, as we're in a time of great uncertainty in the mortgage industry and the country as a whole, according to economists of the Mortgage Bankers Association. And leading up the list, the MBA expects that the rate of new refinancings, which currently account for the majority of current mortgage originations, will be cut in half by 2012. Speaking today at the MBA's Mortgage Operations Conference 2010 in Grapevine, Texas, vice president of research and economics Michael Fratantoni said he expects the level of mortgage originations in 2011 to drop to about $1.1 trillion from an estimated $1.4 trillion this year and $2.1 trillion a year ago. He said interest rates should hold steady around 4.7% for the rest of this year and tick up to 5.1% by the end of 2011, which will be "enough to turn off the refi spigot." Refinancing activity has accounted for about 80% of all mortgages written the past few months, but Fratantoni expects that figure to come in at 60% for the full year and decline to 40% next year. Still, the overall number of refinancings is roughly half what was experienced in 2003 because many borrowers don't meet home equity or income requirements and others have had something happen to damage their credit over the past few years, according to Fratantoni. "We expect a lot of treading water in the numbers we track as we face even greater uncertainty on the regulatory front," he said. Ken Markison, MBA associate vice president and regulatory counsel, said the federal reform included in Dodd-Frank is a compendium of issues and solutions. "How [the industry] handles these will determine our profitability for year to come," he said. Markison said he expects reform to also take root at the state level and mortgage companies should expect increased enforcement at both levels. Write to Jason Philyaw.