7 Tips to Help Homeowners Survive the 2008 Real Estate Market
America's Watchdog and its Homeowners Consumer Center accurately predicted a U.S. real estate disaster in 2004. This was a year before any other major consumer group sounded alarm bells about the US.. real estate markets/U.S. mortgages. The nation now finds itself in the worst real estate downturn since The Great Depression. In 2008, and in 2009, it is likely U.S. real estate markets will actually get worse. With this reality in mind, the Homeowners Consumer Center has developed seven tips fort U.S. homeowners, along with information and advice designed to save them money.
- Many U.S. real estate markets have declined in value since 2005. Homeowners should check to see what their current county or city property tax assessment is (what the county says a home is worth), versus what a home is actually worth, in today's real estate market. In many states such as California, Arizona, Nevada, Florida, and Maryland, homeowners may literally be paying 20% to 40% more in property taxes than they should be paying (based on the current home value). The group strongly encourages all homeowners wishing to reduce their property taxes to learn more about the property tax appeal process.
- For homeowners wishing to learn more about the mortgage process and mortgage industry tricks designed at cheating or over charging U.S. homeowners, the Homeowners Consumer Center has developed a FREE, 20-page mortgage guide that is published on the resource page of the Homeowners Consumer Center.
- The group suggests homeowners and real estate investors avoid real estate auctions selling foreclosures until sometime in late 2008 or 2009. According to the group, "Why go to an auction in 2008 and buy a property that will be worth 10% less in 2009?" Homeowners should avoid slick TV or radio ads that say, "Let 25,000 bankers machine gun each other in order to have a chance at refinancing your mortgage," and Internet pop ups that say, '"Rates at historic lows," and phone solicitations. Homeowners wishing to obtain the name of an honest mortgage lender providing conventional, FHA, or VA mortgages should visit the National Mortgage Complaint Center's resource page for a listing of ethical mortgage lenders.
- Do not finance or refinance a home before first getting a mortgage document inspection from the National Mortgage Complaint Center. The National Mortgage Complaint Center is the premier mortgage document inspection service in the US, and typically their mortgage inspection services will save US consumers hundreds to thousands of dollars. The group estimates that 9 out of 10 current U.S. homeowners were cheated or overcharged when financing or refinancing their home.
- All homeowners need to check their homeowners insurance policy in order to make sure it is up to date. Updating a homeowners insurance policy includes updating replacement values and adding loss of use (in the event a homeowner loses the ability to live in the home during repairs), and flood or earthquake coverage in areas where those events are most likley to occur. The 2008 hurricane season may be the worst ever, with the current La Nina weather affect in the North Pacific. Areas susceptible to hurricanes include the Gulf Coast and almost the entire East Coast.
- If a homeowner purchased a home in 2004-2006 and paid top market prices, and financed the property with an exotic mortgage product such as a pay-option-adjustable-rate mortgage or 100% financing, (s)hemay now owe more on the house than it is worth. If a home's mortgage amount is more than 20% of what the house is now worth, the group suggests that the only way out for the homeowner, may be walking away. According to the group; "We warned banks, home builders, and mortgage lenders not to make these suicidal mortgage loans to homeowners and real estate flippers back in early 2005, and no one listened." Now there is a big question if even many of the biggest U.S. banks, or U.S. home builders will survive the disaster they helped create. America's Watchdog is also very concerned about U.S. Pension Funds that purchased junk mortgage portfolios.
- The Homeowners Consumer Center encourages voters to write their Congressmen and Senators and demand that banks and mortgage bankers be required to disclose a kick back called a "yield spread premium" in the same fashion that mortgage brokers have to disclose this fee. The Center estimates," most homeowners pay a higher monthly mortgage payment than they should have to pay because banks and mortgage bankers are not required to disclose this fee." According to America's Watchdog, "the biggest two issues associated with our nation's mortgage/real estate crisis are appraisal fraud, and the fact that bank do not have to disclose yield spread premium kick backs they received for inflating homeowners' interest rate/monthly mortgage payments. It is time for 100% transparency in the mortgage process".