Department of Housing and Urban Development (HUD) Secretary Shaun Donovan said that there is a “significant chance” the U.S. housing recovery will not continue.  

Donovan reportedly said at a news conference today in Washington that there is still a lot of market volatility and what was projected a year ago turned out to be very wrong.

He said positive signs of a potential rebound have been helped along by broad government policy efforts to bolster the housing and mortgage markets.

These remarks should not have come as a surprise to the securtization market.

Industry players speaking at Information Management Network’s ABS East conference last month in Miami, Florida said that, although there has been some recovery in the markets, they still anticipated further deterioration in 2010. Panelists also predicted that prices will most likely reach bottom sometime midyear.

“I think we all would agree that the technical’s are driving the train (both on the way up and on this recent move down) and that the fundamentals are still not so much,” said Jesse Litvak, a mortgage trader at Jeffries & Co.

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