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March 6th, 2009

Our new Two-Month Forecast…

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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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One Response to “Our new Two-Month Forecast…”

  1. Rebecca Wilder Says: March 7th, 2009 at 9:40 am

    Hi Paul (Tim),

    You say, “As well, prospects for 3-4 million loan modifications also seem outlandish…”

    Agreed.

    I would like to see your forecast for Treasuries as well. Then I could better understand your definition of “tangible benefit” regarding the Fed’s MBS purchase program, because spreads over Treasuries would likely tighten, in spite of the fact that Treasury yields MAY rise when the Treasury starts to sell new issue in bulk. Like the forecast.

    Best, Rebecca

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

Our bloggers:

Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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