The sudden drop in mortgage refinance activity in the third quarter of 2004 spurred a sharp decline in new loan production, weighed down by sagging volume in the government-insured and conventional conforming markets. Based on lender surveys conducted by Inside Mortgage Finance, mortgage originations plummeted to an estimated $650 billion in the third quarter, a sharp 18.8 percent decline from the second quarter. Although interest rates dropped during the period, the decline wasn’t enough to