…has been posted. Our forecast for mortgage rates during that period were on the mark — all the more amazing given the turmoil in the markets. Will we do it again this time? Stay tuned!
We also continue to be pessimistic about the government’s string of mortgage bailouts:
With regards to the HASP, there is probably some value for borrowers who are lucky enough to have a Fannie/Freddie held mortgage to refinance even if they are mildly underwater. However, we think that claims of 4-5 million homeowners leaping at the chance to be put through today’s mortgage underwriting wringer is wildly optimistic, even if a better interest rate can be obtained after all the “adder fees” and all the hurdles can be overcome to obtain financing.
As well, prospects for 3-4 million loan modifications also seem outlandish, even if there are new incentives to participate for various parties. We’ve heard too many claims already about how concept A or concept B will save the housing market: anyone remember last summer’s much ballyhooed Housing and Economic Recovery Act (HERA)? Or how about the $300 billion Hope for Homeowners, which has only completed about 25 loans since it began in October? (We note that the Congressional cramdown bill will revise and extend the HOPE program.
To read the Two-Month Forecast, click here.
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