It wasn’t long ago that Rafferty Capital Markets LLC VP of equity research Richard X. Bove declared victory on Fannie Mae / Federal National Mortgage Assctn Fnni Me (OTCBB:FNMA) and Freddie Mac / Federal Home Loan Mortgage Corp (OTCBB:FMCC) reform, sensing a sea change in Federal Housing Finance Agency (FHFA) chief Mel Watts comments at the Brookings Institution. Now he has swung to the opposite extreme and is warning that unless the government changes course we could be looking at the making of another housing crisis.
“In 2017, a new President will take office. S/he will be faced with a deteriorating housing environment that s/he never thought about during the election. However, the problems surfacing in housing will require immediate action. A bailout of the industry might be required costing well more than what occurred in 2008,” Bove writes. “If I am right that year will experience a hair raising recession driven by another catastrophe in housing.”
