According to Americas Watchdog, "We think that too many individuals get lost on the idea our nation's real estate disaster is related to sub-prime mortgages. In reality this crisis is about value, and or the lack there of. Many individuals who financed or refinanced their home after 2004 now owe more than their home is worth. That's with a 10 percent down payment/10 percent equity. We estimate this number is over 15 million homeowners. Essentially they refinanced the perceived equity in their home, when in fact there was no equity, or they put 10 percent or 20 percent down on a home purchase, where the homes value was artificially inflated by 10 percent or 20 percent".

Home builders, banks and mortgage bankers in 2002-2006 were doing everything they could to promote real estate price appreciation, even if there was little to no basis for increased real estate prices. According to Americas Watchdog and its National Mortgage Complaint Center (Http://NationalMortgageComplaintCenter.Com), "home builders would come into a real estate market like Phoenix, Las Vegas, Miami, the DC Metro, and many other markets and demand appraisals higher than the existing prices of a community by telling the appraisers, 'either come up with inflated values, or we will find someone else who will'. Seeing the new fabricated real estate values in many US metro's, greedy banks and mortgage bankers started selling consumers the notion that they could 'cash in' on the 'instant real estate equity'. The problem: real estate values had not really increased. Consumers bought into the frenzy by cashing out of non-existent equity and purchasers of new homes after 2003 may have bought a house priced 20 percent over what it was really worth."

Americas Watchdog went on to say, "what we find astonishing is the wizards on Wall Street dismissing the seriousness of the real estate/economic issues now facing the US. Its not sub-prime; its value. If the 15 million US homeowners elect to walk away, because they figure out its better than paying on an upside down mortgage that cannot be refinanced, a deep recession is assured and we are not sure how you dig it out of it. Big banks and mortgage lenders were pushing artificial valuations. So were the top 20 home builders. Pushing values happened long before sub-prime ... it started back in 2002. The Fed cannot fix this, even if they lower rates to zero. Valuations will first have to arrive at the real world, before that happens. In the mean time pension funds and others are going to have to start wondering who will be able to pick up the bar tab, after all the greed related to the non-stop real estate happy hour that actually ended a couple of years ago. We don't think even the federal government will be able to pay it".

On the week of December 12, 2007, the National Association of Realtors said "home prices will gradually start to increase in 2008". According to Americas Watchdog, "this is a another lie, from a desperate trade group willing to say anything to improve sales for starving real estate agents". Americas Watchdog has already indicated that home valuations nationwide will decrease another 10 percent in 2008, with extreme markets like Southern California seeing 15 percent decreases. Americas Watchdog has indicated that, "2007 will be a walk in the park, compared to the 2008 real estate market".

For consumers, Americas Watchdog and its National Mortgage Complaint Center are suggesting the following:

Do not fall for a bank or mortgage bankers offering a "no point, no fee mortgage". Because banks do not have to disclose a kick back called a yield spread premium the consumer will end up with a higher monthly mortgage payment or a ridiculous mortgage product.
If a homeowner cannot sell their home, they should consider renting it until the housing market starts to recover in 2010 to 2011.
If a consumer has a pay option adjustable rate mortgage, unless their bank can offer them a fixed rate mortgage, with no negative interest feature, that back loads more debt onto the mortgage, they may be better off simply walking away from the home.
If a consumer does not have to buy a home in 2008 don't. Why buy something in January 2008, that could be worth 10% less by December 2008?
If a consumer needs to refinance your home please contact the National Mortgage Complaint Center as to where to find an honest mortgage lender. ( http://NationalMortgageComplaintCenter.Com )

Because 2008 is an election year, all US citizens should contact their Congress person or US Senator and demand honesty and transparency in the mortgage process. Americas Watchdog thinks all citizens should ask their elected officials why banks and mortgage bankers do not have to disclose kickbacks such as "the yield spread premium", even though mortgage brokers do. Consumers should also demand criminal prosecutions for home builders and banks involved in schemes that artificially inflated real estate values. What America now needs is a honest and transparent mortgage process, with easy to understand documents and full disclosures of all fees.

Americas Watchdog and its National Mortgage Complaint Center have been warning about these issues for over two years. In contrast to the spin doctors in Washington DC, or Wall Street, 2008 will be grim from an economic standpoint, and for the US real estate markets nationwide. Americas Watchdog is encouraging all consumers and homeowners to be conservative and thoughtful with respect to any housing decision they might make in 2008. Americas Watchdog is all about consumer protection and corporate fair play.