Hovnanian Enterprises, Inc. (NYSE: HOV) CEO Ara Hovnanian said the homebuilder expects fiscal 2008 to be a “difficult year.” Hovnanian made the comments during a midday conference call.

“The market is too challenging to make accurate forecasts for fiscal 08” Hovnanian said. “Fiscal 08 will clearly be a difficult year and we have already taken significant steps to position ourselves and reduce our overhead to be better prepared for an environment with lower sales and prices.”

CFO Larry Sorsby said the company believes President Bush’s recently outlined plan to clean up the credit crisis will have a positive effect on the mortgage market.

“The steps outlined by the president will certainly reduce the number of homes which could be exposed to foreclosures,” Sorsby said. “Obviously, this is a positive for the market, both structurally and psychologically.”

The chief financial officer also said the Fed’s decision to lower the federal funds rate will have a positive impact on home buyers, but it will be mostly “psychological.”

Sorsby said the company’s involvement in subprime loans has lessened due to the mortgage crisis.

“The amount of subprime mortgages generated by our mortgage company declined from 11.1% during fiscal ’06 to 3.7% during fiscal ’07 and counted for only 1% of volume in fourth-quarter ’07,” he said.

In a posting this morning on BloggingStocks.com, CNBC pundit Jim Cramer said Hovnanian is “barely alive.”

“There is no reason in heck anyone should buy them,” Cramer said. “The whole housing market is exemplified by this company: still pumping out units, still having active selling communities, still trying to trim land inventories from the bloated 2006 level, still trying to negotiate with the banks by taking whittling debt, trashing the preferred folks.”

For access to the full article, you must be a registered member - it's FREE.