The Mortgage Bankers Association, an industry trade group, dramatically cut its forecast for 2009 mortgage originations in the US to just over $2 trillion. The new estimate, down a whopping 27% from the March figure, is said to reflect an environment of rising mortgage rates and an increasing share of purchases going to all-cash buyers.

According to the MBA’s chief economist, Jay Brinkman (courtesy of the Wall Street Journal):

“We have now lowered this [forecast] for several reasons. First, while home sales have been higher than expected, home prices have fallen more than expected leading to smaller loans. Second, the large share of distressed sales or homes purchased by investors has resulted in the share of all cash home purchases being higher than normal.”

Toss in new appraisal laws which make getting a loan on anything but a pristine home downright impossible, and the housing outlook remains murky, at best.