Investor gurus Meredith Whitney and Nouriel Roubini, who both made accurate forecasts during the financial meltdown, are too bearish with their current outlooks for the banking sector, says Thomas Brown, chief executive officer at Second Curve Capital, a New York hedge fund.

While Whitney and Roubini are correct in forecasting more losses for the sector, they are overlooking that financial stocks are way undervalued and have room for recovery.

“The biggest thing for both of them for the last 15 months has been a lack of attention to valuation,” Brown tells Bloomberg.

“If I’m right and earnings are continuing a recovery, then the valuations of these companies will continue to recover.”

Whitney, the New York-based chief executive officer of Meredith Whitney Advisory Group known for forecasting Citigroup’s dividend cut in 2008, has said the consumer-credit market is still threatening the banking sector.

Roubini, the New York University professor who predicted in 2006 that a financial crisis was imminent, has said that many ills that created the credit crisis have yet to be resolved.

The Obama administration and Congress are working to hammer out sweeping legislation that would overhaul parts of the financial system and toughen regulation.

Some say a version of the bill just passed in the Senate may prevent businesses from investing and growing, while others say it has enough teeth to prevent a repeat of the financial crisis.

“When this bill becomes law, the joy ride on Wall Street will come to a screeching halt,” says Senate Democratic leader Harry Reid.