Real Estate Market of 2008 May Be Worse than 2007, Says Watchdog Group

In 2005, America's real estate market was said to be a "train wreck waiting to happen." Current predictions are that "the 2008 national real estate market will make 2007 look like a walk in the park." All of this is according to America's Watchdog and its National Mortgage Complaint Center. The agency issued a press release Sept. 13 predicting that 2008 will see millions of Americans lose their homes to foreclosure as more mortgage lenders go out of business, home builders go bust and commercial real estate investment trusts collapse.

America's Watchdog (AW) is a consumer advocacy group that, as the parent group of several consumer protection agencies, is continually keeping tabs on and assisting businesses and consumers with everything from mortgages and real estate issues, to product piracy and counterfeiting, to corporate waste, fraud and corruption.

AW's frightening real estate prediction can leave many a new homeowner or prospective buyer wondering how to protect themselves if such a dire scenario presents itself in 2008.

According to AW, there are several things to consider, beginning with those who have what's called a "Pay Option Adjustable Rate Mortgage." If that's the case, AW recommends getting out of it if at all possible by contacting your lender and demanding a fixed rate mortgage. If that doesn't work, AW says consultation with a bankruptcy attorney may be worthwhile.

If you have an adjustable rate mortgage, refinance your mortgage into either a 30-year fixed rate mortgage, or get a five or seven year adjustable rate mortgage and sit tight.

If you already have a good fixed mortgage rate, stay put.

If you're trying to sell your home in a major U.S. market, AW says you may have to lower your asking price or consider renting out your home for at least three years. It's AW's opinion that 2008 will see more real estate price reductions in the southwest, southeast and northeast. In fact, some real estate markets like California may actually see reductions of 15 percent or more.

For people in the market to buy a home, AW says to "wait if you can."