The Top 5 Don’ts Per the Homeowners Consumer Center:

1. Use a reputable local or reputable national mortgage firm. Do not use any firm associated with a slick TV ad that says something to the effect, “let 3000 mortgage loan officers beat each other to death for your business.” According to Martin, President of the National Mortgage Complaint Center, “these middlemen frequently get huge fees for sending the borrower to the most expensive lenders, with the net result being, you end up paying more money”.

2. Do not respond to internet mortgage companies or internet mortgage solicitations. According to Martin, “I see nothing but trouble in dealing with anyone who you cannot see or you cannot check out”. Martin says; “some of the worst mortgage deals I have ever seen came from the internet or via internet solicitations”.

3. If you are buying a new home form a Regional or National Homebuilder Do Not Use Their Mortgage Product. According to Thomas Martin; “Regional or National Homebuilders gouge and over-charge millions of unsuspecting US homebuyers every year by offering phony bonuses or other less than honest gimmicks to keep the mortgage transaction in-house”. Martin explained; “most home builders offering mortgage products are in fact mortgage bankers, and as such not required to disclose to the consumer that they are in most cases getting back huge kick-backs for increasing the interest rate of the borrower over the best rates available (also known as yield spread premiums).

4. You should not allow yourself to be pressured or forced to close before you completely understand the mortgage, its fees and the specifics of their proposed mortgage.

5. Martin advised all consumers to stay away from any or all mortgage products that have a starting interest rate of 1% to 2%. According to Martin; “these scam mortgage devises could be the un-doing of the entire mortgage market because most consumers do not understand that the rate will only stay at 1% to 2% for a month or two before the interest rate and monthly mortgage payment start going up”. “If you are on a fixed income and or barely qualify for a product like this; do not go through with the transaction because in a short time you may not be able to make your mortgage payments”. Martin also warned about negative amortized mortgage products because; “why not just pay rent, because that’s all you are doing with this mortgage product”.

Aside from the Top 10 consumer tips the following is a great concern for the 2006 US Real Estate Market. 2006 will be a flat real estate market and or a real estate market that goes south (real estate bubble) because of over-inflated home values that are not supported in their market. The number one cause for alarm; home appraisers who for years, have been forced by real estate agents, mortgage lenders or home builders to come-up with real estate appraisal values that are not realistic or that are not based on reality. We call this “the train wreck, we have been predicting for over a year”.

The appraisers in many cases either have to come up with a make believe home value dictated by the real estate agent, the mortgage lender or the builder or the real estate agent, mortgage lender or home builder will find another real estate appraiser who will. Why call it an appraisal if the appraiser is forced to come up with a pre-ordained value?