How do you have new anti predatory mortgage rules that do not include disclosure of the huge kick back banks get called yield spread premium? Why are the new anti predatory mortgage rules not applicable until October 2009? The reforms were needed six years ago
Washington, DC (PRWEB) July 16, 2008
In March of 2007 Americas Watchdog accurately predicted the banking and financial failures that now face all Americans. According to Americas Watchdog, "what we did not for see was Wall Street speculators running to oil after they literally ruined the US real estate market". Here is what the group said a year ago with some revisions based on a July 2008 reality:
(PRWEB) March 15, 2007 -- For over two years Americas Watchdog & its National Mortgage Complaint Center have been warning that if a very greedy mortgage industry was allowed to continue with ridiculous mortgage products or programs, at some point the entire economy could be put at risk. The last two weeks of declines on Wall Street are but one indicator that the self-inflicted damage to the economy has started. According to Thomas Martin President of Americas Watchdog, "things are about to get much worse". Americas Watchdog has five simple tips for consumers or industry insiders to prepare for the next two very turbulent years of record real estate foreclosures and Wall Street mayhem.
1. If you have an "Option Adjustable Rate Mortgage" try to see if your current lender will assist you with a conversion to a more stable fixed rate product. Option Arms were always a ridiculous mortgage product & should have never been offered to the average consumer.
- July 2008 Revision: If you still have a pay option adjustable rate mortgage, you probably owe more on the home than it is worth, and a Congressional bail out will come too late to help you. The banks or mortgage bankers that sold pay option adjustable rate mortgages, are either out of business, or will soon be out of business.
2. Homeowners who purchased in 2004, 2005 & 2006 may literally have no ability to refinance their home if they used 100% financing. In many regional or local real estate markets prices have dropped 10% or at best prices are flat. If you do not have to sell your home..... don't. If you can no longer afford your payment; Americas Watchdog suggest that the consumer attempt to do a work out with his/her/their lender. For many consumers a "deed in lieu of foreclosure" might be your best option if your lender is not willing or able to do a work out.
- July 2008 Revision: Americas Watchdog is now predicting at least another 10% loss in US real estate market values in 2009 and in markets like Southern California, the losses next year could be a staggering 15% loss of real estate equity.
3. Congress has been heavily funded by the mortgage industry (campaign donations). The practice of any industry buying Congress needs to stop and homeowners need to be afforded the right to a transparent mortgage transaction where all fees must be disclosed. As an example at the present time only mortgage brokers are required to disclose a kickback for increasing a borrowers interest rate. Banks or mortgage bankers are not required to inform the borrower of this extra income. The fee is called a "yield spread premium" and Congress needs to immediately require that consumers get to see exactly what the lender is making on the mortgage transaction to include all banks and all mortgage bankers.
- July 2008 Revision: The United States needs a new constitutional amendment that makes it illegal for PAC's, special interest groups, Wall Street or any other group to pay off the US Congress with a bribe more commonly known as a campaign donation. According to Americas Watchdog, "we are in this mess because the Congress was at a campaign donation party, while the real estate/US economic disaster was brewing".
- Americas Watchdog is demanding that US Senator Christopher Dodd (D) resign from the US Senate Banking Committee. According to the group, "Christopher Dodd was supposed to be minding the store? Instead he was getting a special loan from one of the more notorious mortgage lenders in the US, and since the first of the year he has taken $70,000 from a bank that has a very, very big stake in the US governments bailout of the mortgage industry".
- A Note To Congressman Barney Frank (D) & the Federal Reserve Chairman: "How do you have new anti predatory mortgage rules that do not include disclosure of the huge kick back banks get called yield spread premium? Why are the new anti predatory mortgage rules not applicable until October 2009? The reforms were needed six years ago"!
4. Home Builders need to get out of the home lending business. Aside from inflating appraisals, home builders have been gouging consumers with undisclosed yield spread premiums for years. The mortgage industry is currently being crushed with calls on non-performing loans. Home builders could be next. What will home builders do when Wall Street comes knocking with pay back provisions for non-performing loans. Many home builders could end up going the way of New Century Mortgage. Appraisal fraud in the home building industry is a massive national problem that has received little to no attention.
- July 2008 Revision: According to Americas Watchdog," the largest US home builders are done or soon will be. The next big real estate shoe to drop will be commercial real estate developers and real estate investment trusts going broke".
5. Consumers with 401 K investments along with pension fund advisers need to wake up & examine their portfolio's. Wall Street Investment Bankers are largely to blame for much of these problems because they either financed it, or they put the deal together. While much of the mortgage industry is going down the tube, Wall Street Investment Bankers are recording record profits. What is wrong with this picture? Americas Watchdog also believes that the shake out in the mortgage industry will result in "flat fee mortgage lenders" much like what happened to the stock brokerage industry after the "Dot Com" bust. The flat fee approach is the future of the mortgage industry.
- July 2008 Revision: "If a single US consumer has more than $100,000 or a couple has more than $200,000 in a single bank, get it out and have no more than what is covered by US FDIC insurance in any one bank".
- Americas Watchdog is accusing US mutual fund managers of being negligent in the management of US consumers retirement accounts. The group intends to begin an national audit campaign to discover which mutual fund managers did the worst job for the consumer.
According to Americas Watchdog, "as Americans what has happened to the US economy makes us want to cry. Millions of people lives have been ruined by Wall Street greed and a bought and paid for US Congress. As a survivor of Hurricane Katrina, we know federal bail outs do not work. When we predicted all of this in March of 2007, we had no idea that Wall Streets next move would be to destroy the global economy over oil. All we can tell you is to protect your money, your assets, stay away from more debt. At the same time, we are demanding justice for those who have put the entire nation and its future in jeopardy. Pretty sad stuff".
Americas Watchdog is all about consumer protection and corporate fair play. Their web site is located at http://AmericasWatchdog.com.