Don't you just love Q1 of each year, when everyone suddenly revises their full year forecast?
Fannie Mae took a big scissors to its forecast for residential investment (mortgage funding) this quarter. A month ago they thought the it would rise 2.8 percent in Q1, but now they're saying it could drop 17.2 percent. That's some change.
On top of that they slashed their forecast for mortgage originations for 2010 to 1.31 trillion from 1.97 trillion in 2009 (a 33 percent plunge!). That forecast is also a drop from their February forecast of 1.34 trillion.
"I still don't think investors and the media at large have grasped the variety of consequences that a [33 percent] year over year drop in mortgage volume in 2010 will bring. Just think about all the lost jobs and income or how many times 'mortgage banking revenue' has driven bank earnings," warns mortgage industry analyst, Mark Hanson.
"A $1 trillion origination year would be down about 66% from the bubble years average and 75% from the peak."
