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Press Releases
Americas Watchdog Explains How The 2007 Real
Estate Disaster Happened Along With A Grim Preview of 2008
For years Americas Watchdog has been warning about the implosion
of the US real estate "bubble." Wall Street talks like the
problem is behind us. In reality the "problem" is just in its
initial stages, with more severe hardships that will affect
individual homeowners as well as the over all economy. In order
to better understand this real estate and economic disaster,
Americas Watchdog along with its Homeowners Consumer Center have
put together the main reasons this disaster happened, along with
what citizens can do to position themselves from the storm that
is about to come.
(PRWEB) September 24, 2007 -- Americas Watchdog and its
Homeowners Consumer Center (Http://HomeownersConsumerCenter.Com)
are among most quoted sources in the nation on predatory
mortgage lending issues. For over three years Americas Watchdog
has been warning of a coming real estate disaster, as a result
of greedy lending practices. Despite the warnings, mortgage
lending practices did not change, greedy mortgage lenders &
homebuilders had their way with unsuspecting consumers, and now
the US economy it tittering on the verge of a serious recession
or worse.
So what happened to real estate?
1. The single biggest problem with the "2007-2008 perfect real
estate storm" was mortgage lenders more concerned about making
money "right now"; regardless of the long term impact on the
economy. It was about absolute greed. Greed manifested itself in
many ways.
* One element of the greed was a product called a "pay option
adjustable rate mortgage" ( a suicidal mortgage product for the
consumer and for pension funds or mutual funds that purchased
these types mortgage portfolios).
* Another aspect of the greed was "stated income loans", where
the borrower, broker, or bank were able to make up the consumers
income, in order to get the loan approved, even if the borrower
never could make the mortgage payments. The National Mortgage
Complaint Center has numerous examples where the borrower was
told by the broker/lender, "don't worry about filling in the
blanks on the mortgage application (Fannie Mae Form 1003), just
sign it, and I'll fill in the blanks for you".
* The third aspect of greed was massive appraisal fraud on the
part of homebuilders, many of whom were also mortgage lenders.
As an example of this fraud; a national homebuilder would go to
Las Vegas, or dozens of other major US cities, with the
following order to local real estate appraisers; "we want this
much per house for our new 500 home sub division". If a local
appraiser would balk at the inflated valuation and say, "the
houses are not worth it", the homebuilder would find another
appraiser who would give the builder the inflated values.
Existing local owners then thought: " my house is better
located, bigger, so its worth more than the new homes down the
street". In the hight of the frenzy (2003-2004-the first six
months of 2005), homebuilders & lenders got away with this
practice, and valuations in many states sky rocketed. The
problem now; the new houses were never worth up to 25% to 35%
more than the existing market. According to Americas Watchdog,
"our big worry is formerly hot real estate markets-adjusting
down 25% to 35%-to pre-frenzy levels by this time next year".
Note: National homebuilders have a second gigantic problem. In
the Southwest, Southeast, Northeast, & Texas most national
homebuilders used undocumented workers to build the new homes.
These individuals were frequently given a 1099 (sub-contractor
form/or cash), and no one paid any taxes on them. Adding to the
problem, because these workers frequently could not read
English, the nation may now have literally millions of defective
or unsafe homes & we now have hundreds of thousands of
unemployed undocumented workers who do not show up in the
Federal Governments "labor statistics" (because the IRS never
knew they existed).
* 100% financing was always a disaster all by itself. Especially
if you add the component of inflated real estate values. Now
millions of US homeowners live in a house that has lost 10% to
15% of value with another 10% to 15% decrease in value coming in
2008. The $64 question now is; will those millions of homeowners
stay put, or will they simply turn their keys into the bank &
say "goodbye"? Americas Watchdog thinks 40% to 50% of this group
will say goodbye. Many in this group are " real estate flippers"
who put second mortgage on their existing home, thinking they
could cash in big on the boom". Now many "flippers" are over
extended and have flooded many formerly hot real estate markets
with fire sale pricing on their investment or they may lose the
home to foreclosure. This reality puts real estate values in
many US regions at extreme risk, when you add in the
foreclosures from pay option adjustable rate mortgages & stated
income borrowers.
* The Federal Government including the Federal Reserve looked
the other way, because the housing boom was good politics.
"Never mind that up to a million undocumented workers were
paying no taxes on the new houses they were building, or never
mind there was zero transparency in the mortgage process". The
Federal Government, Congress and the Administration are just as
guilty as the greedy banks and greedy homebuilders in this real
estate disaster.
So what Happens Next or What Should Consumers Do Now?
1. If a consumer has a good mortgage product and they can afford
the monthly mortgage payments stay put.
2. If a consumer suspects they are one of the millions of
cheated US consumers, the National Mortgage Complaint Center
(Http://NationalMortgageComplaintCenter.Com ) will review the
homeowners mortgage documents for a modest fee & write a
narrative report high lighting possible issues and then suggest
possible ways to get their money back. This is the only service
of its type in the nation.
3. If a consumer is thinking about purchasing a home, wait, or
thoroughly do local real estate market homework before making an
offer on any house. Do not finance or refinance a home without
first getting a mortgage document review & report from the
National Mortgage Complaint Center. This mortgage document
inspection is also the only service of its type in the nation.
So What Should Wall Street Do?
1. Prepare for a serious recession. According to Americas
Watchdog, "Wall Street was supposed to be looking 6 to 12 months
out; it now acts like its looking 6 to 12 minutes out". "Forget
about a white Christmas". "Retail, auto sales, and many other
sectors of the economy will suffer for the rest of 2007 & 2008
because of the US real estate disaster". Expect a significant
correction in the Dow.
2. In the opinion of Americas Watchdog; "greedy Wall Street
investment bankers in bed with greedy homebuilders, mortgage
bankers, with elected leaders standing at the door as a look
out, have led us to this national disaster. Mutual funds,
pension funds, and investment advisor's need to thoroughly
examine their mortgage backed securities portfolios. In reality
these portfolios may only be worth $0.70 to $0.80 cents on the
dollar.
Note: Commercial real estate investment trusts will also get
crushed in 2008, because of the economic slow down. Corporate
down sizing will increase vacancies in commercial and retail
properties. Apartment rents will also plummet because of a flood
of unsellable homes suddenly in the residential rental markets
in many regions of the US.
So What Should Our Elected Leaders Do?
According to Americas Watchdog, "two very good starts would be
elected officials refunding all "campaign donations" from the
mortgage banking & the homebuilding industry & our elected
"leaders" need to enact legislation so the home mortgage process
is transparent for US consumers. Transparency includes banks and
mortgage bankers disclosing a kickback called a yield spread
premium to consumers. "Mortgage brokers are required to disclose
this kick back for inflating the borrowers interest rate/monthly
mortgage payment, mortgage banks and or banks do not (even
though they get them too)". This is a ridiculous double standard
that has allowed millions of US consumers to be overcharged by
their mortgage lender". On September 13th 2007, Americas
Watchdog asked US Senate Banking Committee Chairman &
Presidential hopeful Chris Dodd to answer this double standard
question for every homeowner in the nation via a national press
release ("Why the double standard on yield spread premium kick
back's for banks?"). According to Americas Watchdog; Dodd has
yet to answer the question to the nation".
Americas Watchdog is all about consumer protection, corporate
fair play and integrity in our political system. If a consumer
feels like they are one of the millions of US homeowners cheated
in the mortgage process, a new home purchaser, whose house was
built by undocumented workers, or whose new home is defective,
please contact Americas Watchdog at 866-714-6466. or visit our
Homeowners Consumer Center at Http://HomeownersConsumerCenter.Com
and send them a contact note via their web site.
The Housing Bubble Gets Ready To Burst: Homeowner Tips To
Survive The
Real Estate Burst
The question regarding soft or hard landings with respect
to our nations housing "bubble" is
about to get answered, with a touch down that will evolve into a
very hard landing. This hard
landing may put at risk the entire economy. The two largest
culprits are
homebuilders/mortgage firms that forced real estate appraisers
to come up with inflated
valuations and the second culprit are teaser rate, adjustable
rate mortgage products that are
now starting to adjust beyond many homeowners ability to make
the payment. The victims are
or will be our nation's homeowners, our nation's pension funds
and ultimately the U.S.
Taxpayer in a Katrina type bail out.
(PRWEB) September 6, 2006 -- The question regarding a
national real estate bubble, and or a hard or soft
landing according to the President of The National Mortgage
Complaint Center/Homeowners Consumer
Center "is about to get answered." Mr. Thomas Martin the
President of this group has indicated that the
"bubble is going to be more like a nuclear detonation with
consequences getting progressively worse, with no
quick fix." He calls it "the Hurricane Katrina of real estate,
because everyone knew it was coming and no one
prepared for what it would, or could do."
"Lagging home sales and home price reductions are but one
indicator, ever increasing foreclosures are the
second.The reality is that with real estate valuations coming
back to earth many homeowners have no equity
left in their homes or actually owe more than their home is
worth." So how did this happen? Martin says the
answer can be summed up in one word, "Greed."
For over two years the National Mortgage Complaint Center has
been expressing concern/panic over regional
or national homebuilders forcing local real estate appraisers to
come up with inflated or over-valued real estate
valuations. The net result is, as builders inflated the price of
their new homes, existing homeowners inflated
theirs. This practice goes back to about 1998. It was a game of
musical chairs. According to Martin," at some
point the music would stop and someone would get left without a
chair. In this instance it will be the
homeowners who recently purchased a home and or the pension
funds who thought they were buying a real
estate portfolio worth 100%. In reality new mortgage backed
securities might only be worth 90% or 85%.
Ultimately it will be the taxpayer; as this real estate bubble
burst will call for another massive federal bail-out
just like the Savings & Loan Bail Out of the late 1980s & early
1990s."
The other culprit according to Martin is a "greedy mortgage
industry combined with a Fannie Mae, Senate &
House Banking Committee all asleep at the switch with respect to
ridiculous mortgage products such as
adjustable rate mortgages (ARM's) with start rates as low as 1%.
The problem is, the borrower did not
understand that the rates would increase, or these mortgage
products allowed borrowers to qualify for a
mortgage they could never other wise afford. At some point the
borrower realizes they cannot make the
payments or they owe more on the home than it is actually worth,
and they walk away from the house or they
face foreclosure." According to Martin, "the combination of
blackmailing real estate appraisers into inflated
valuations combined with insane mortgage products creates the
perfect storm for a real estate disaster that
could be our nations most costly real estate melt down in
history."
The National Mortgage Complaint Center & its partner The
Homeowners Consumer Center suggest
homeowners do the following to weather the 2006 real estate
bubble burst.
1. Don't sell right now if you don't have to. If you do have to
sell, do it now, even if you have to reduce your
price. The national or some regional markets may ultimately
correct to 10%-20% less than current market
valuations, especially in formerly hot markets like California,
Arizona, Nevada, Washington DC Metro, New
York, Florida and the Carolina's. It may take 5 to 7 years for
these markets to recover to 2005 price levels.
2. If you are in a mortgage that has features that call for
payment increases or adjustments within the next two
years, see if your current lender will allow you to convert to a
fixed rate product. If not call the National
Mortgage Complaint Center Http://NationalMortgageComplaintCenter.Com
to see what your options might
be. The Complaint Centers toll free number is 866-714-6466.
3. Consumers should not fall for some advertising gimmick from a
mortgage firm/bank or homebuilder
offering a 1% start rate on a mortgage or 100% financing. Why
would anyone want 100% financing in a
nationwide real estate market that could see values decline 10%
to 15%+ in the next two years? Put another
way "why purchase something that at least in the short run may
not retain its value"?
4. If you are a potential real estate buyer the Homeowners
Consumer Center (
Http://HomeownersConsumerCenter.Com ) & the National Mortgage
Complaint Center strongly suggest you
wait to see how far real estate values go down in your area
before you purchase a home or investment
property.
5. While real estate market prices may decline, the rental
market should stay intact. Homeowners unable to
sell their existing property should consider renting their
property until the real estate market begins to recover.
This may be the best option for many homeowners to actually hold
onto their property.
For Mortgage Lenders, Mortgage Bankers & Homebuilders the
National Mortgage Complaint Center
Suggests; Clean Up Your Act.
The mortgage process should be simple and transparent with
consumer friendly approaches to fees; par
interest rates, yield spreads and pre-payment penalties, etc.
Martin envisions a future, with flat fee- A-type
mortgages, and flat fee title insurance. In other words the same
thing that happened to the stock market with
respect to flat fee stock trades is about to happen to the
mortgage and title industry. "Its no longer a question of
if, at this point, it's just a question of who figures it out
first and takes over the mortgage/title industries".
The echo generation is now in high school or college (the
largest generation of possible homeowners in our
nations history). Within four to six years they will become
potential home buyers or renters. By this time, we
believe the market will have corrected and appreciation will
begin again. By then it is the hope of the
Homeowners Consumer Center that there will be much more
conservative approaches to real estate valuations
and deceptive mortgage products/fees will have been outlawed.
Contact Information
Thomas Martin
AMERICAS WATCHDOG
http://AmericasWatchdog.Com
866-714-6466
If you have any questions regarding information in these press
releases please contact the company listed in the press release.
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appears here.
Most Homeowners at risk. Check Your Homeowners Insurance
Policy, Advocacy Group Warns.
The Homeowners Consumer Center
is making an urgent appeal to all US homeowners to check their
homeowners insurance policy before the 2006 storm/fire season
starts. According to the survey of over 1000 US homeowners, less
than 15% understand their policy or the areas of insurance
coverage they need to have.
(PRWEB) May 9, 2006 -- The
Homeowners Consumer Center is making and urgent appeal for all
US homeowners to check their homeowners insurance policy, before
the start of the 2006 hurricane, storm or fire season. After
surveying over 1000 homeowners representing every US state, it
was discovered that less than 15% of those surveyed, understood
their homeowners insurance policy, and or the areas of coverage
the typical homeowner should have.
From this survey, (Http://HomeownersConsumerCenter.Com
) has come up with a very simple list of do's & don'ts for every
homeowner, when it comes to their homes insurance coverage. as
follow:
Do's & Don'ts
1. If you live in a state on or close to the Gulf of Mexico, the
Atlantic Coast, Hawaii, a river, stream or an area prone to
flooding, get flood insurance coverage, and make certain you get
the maximum insurance coverage ($250,000).
2. If you live in a state on, or close to the Gulf of Mexico,
the Atlantic Coast, Hawaii, a river, stream or an area prone to
flooding, be certain to get the $100,000 supplemental flood
coverage. This will cover personal property loss due to
flooding. 95% of the homeowners surveyed were not even aware
this type of coverage exists. In the event your home is
destroyed by flooding, contents coverage will pay up to $100,000
for personal property replacement. The typical homeowners policy
& or standard flood insurance exclude personal property. To see
if your home is in a flood plain or potential flood plain go to
FEMA's web site.
3. Make certain your homeowners policy has at least one years
coverage for "loss of use", for at least $2000 per month. Loss
of use will help pay rent, or living expenses in the event your
home is rendered unusable as a result of a flood, fire or storm
damage.
4. Of the over 1000 homeowners surveyed, only 3% knew if their
homeowners insurance policy has "full replacement" coverage. In
other words, if the house was destroyed by wind & rain, fire or
flood, they were not sure if the policy called for actual
replacement. Further complicating the matter; many homeowners
don't understand their insurance coverage because it was added
on, when they financed or refinanced their home by the mortgage
lender. In other words they have little or no idea of what is
covered or what is not covered on the policy.
5. Only 9% of homeowners surveyed knew that certain types of
valuables (jewelry, art, guns, etc) must be included on a
separate sheet provided by the insurance agent/insurance
company. These items must be listed on your policy and agreed to
by your agent & insurance carrier. If you do not have this
additional documentation, in most instances there is no
insurance coverage in the event of a loss. If you have expensive
jewelry, art, antiques, collectibles, guns, etc call your
insurance agent & get them listed on your homeowners policy.
6. Don't do business with an insurance company you have never
heard of before. Before signing on with an insurance carrier,
check with your states insurance commissioner about the company,
and or check the internet for complaints about your current or
proposed company.
7. When looking for an insurance agent for your homeowners
coverage ask around to find out who has a good reputation, or a
reputation for excellent customer service. If you ever have a
significant loss related to your home, make certain you have a
good insurance agent/company in your corner.
8. Don't forget to take pictures of every area of your home
(exterior & interior-actual building & contents). This way you
can prove to the insurance company, you had what you say you
had, and special or unique features of the home/contents are
shown.
9. Try to keep receipts or proof that you had what you say you
had in your home. After Katrina, many homeowners had no way of
proving they had an upgraded refrigerator, TV set, computer
system, stove, etc. Receipts will help you prove to the
insurance company what your homes condition was prior to the
loss and or what you had in the house.
10. Don't keep important records like insurance policies, an
inventory of your home contents, pictures of your home (exterior
& interior), financial documents, receipts, in your home, etc,
unless they are in a secure, fire-proof and water-proof
container. In this instance the Homeowners Consumer Center
strongly recommends a bank safety deposit box.
The Homeowners Consumer Center is dedicated to protecting the
American Dream for all US homeowners. Their goal is to educate
homeowners in order to protect their assets and to educate the
homeowner so they get the right product for their situation or
circumstance. Their web site is located at
http://HomeownersConsumerCenter.Com.
The Homeowners Consumer Center also offers useful consumer
information on numerous other aspects of homeownership.
Homeowners and or consumers are encouraged to share this
information with their friends, co-workers and neighbors.
Press Contact: Thomas Martin
Company Name: THE JUSTICE & INTEGRITY PROJECT
Email: email protected from spam bots
Phone: 866-714-6466
Website:
http://HomeownersConsumerCenter.Com
More Information:
http://www.prweb.com/releases/2006/5/prweb377340.htm |
HOMEOWNERS
