Keeping the housing market inflated was a bad idea. Keeping people in homes they can’t afford was a bad idea. We may find out just how bad those policies are as early as next year.
Via Free Republic, NASDAQ reports:
Despite signs of stabilization at the end of 2009, next year could prove treacherous for the housing and mortgage markets as a variety of woes could rekindle the falloff of the last two years, according to mortgage-industry veterans speaking at the Mortgage Bankers Association annual convention in San Diego Tuesday.
“I’m a firm prophet of the ‘W’ shaped recovery. Housing is going to go down again in the first quarter of 2010,” said Steve Horne, chief executive of Wingspan Portfolio Advisors, a firm that facilitates loan modifications. “The real healing won’t begin until all these nonperforming loans start trading in earnest, until we get these borrowers back on their feet.”
David Lowman, CEO of Chase Home Lending, also thinks the mortgage market could run into trouble early next year, especially if the Federal Reserve ends its purchases of mortgage-backed securities, a strategy that has artificially supported liquidity and kept mortgage rates at historic lows.
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