In 2005 Americas Watchdog warned of a "U.S. economic train wreck" if banks, mortgage lenders and U.S. homebuilders continued to offer consumers "insane mortgage products like the pay-option adjustable-rate mortgage and inflated real estate appraisals." The group's concern was that at some point the real estate bubble would explode, wreaking havoc on the U.S. economy. However, Americas Watchdog never calculated that oil would possibly hit $140, in the midst of what the group had been predicting to be the worst U.S. economic crisis since the Great Depression.

Now, the group is telling U.S. pension fund holders to carefully examine their real estate portfolios, often called mortgage-backed securities, and prepare for a new flood of foreclosures in 2008. The group believes that this flood will get much worse in 2009 because consumers cannot afford a big mortgage payment with hyper-inflation brought on by $140+ per barrel oil. Americas Watchdog is also pointing a finger at U.S. mutual fund investors for foolishly putting millions of U.S. citizen's retirement accounts at risk with investments that continue to be heavily weighted towards financial sectors, or other sectors that would be at extreme risk during a severe U.S. economic downturn.

According to Americas Watchdog, the current U.S. Congress was supposed to be looking out for the taxpayer but instead they elected to take campaign donations. As an example, the group noted Senator Christopher Dodd’s recent connection to Countywide Home Loans in which he, along with numerous other government legislators on both sides of the aisle, received special mortgage deals from the lender. In light of this revelations, Americas Watchdog is demanding that Dodd resign from his role as the chairman of the U.S. Senate Banking Committee. Americas Watchdog is also demanding that the U.S. Senate and U.S. Congress immediately enact transparent legislation related to lending institutions and mortgage bankers that require them to disclose the use of yield-spread premiums.

Further, the group indicated that 50 million current U.S. homeowners are paying a much higher monthly mortgage payment because a bank or mortgage lender was not required to disclose the "kickback" known as the yield-spread premium.

The group also names several others among the "bad guys" responsible for the current economic crisis and ongoing mortgage meltdown. Among those listed are: According to Americas Watchdog, the bad guys are: U.S. homebuilders; title insurance companies; private mortgage insurance firms and any U.S. lender or mortgage bank that sold a pay-option adjustable-rate mortgage or no document mortgage to a U.S. homebuyer.

Americas Watchdog believes that the real victims are the one in seven U.S. homeowners that currently owe more on their home than it is worth. According to the group's National Mortgage Complaint Center, with the price of oil at $140+ and resulting inflation, it is likely that by mid-2009 one in four U.S. homeowners will owe more on their homes that they are worth.

Because of this, we think millions of U.S. homeowners currently struggling to make their mortgage payment, will be forced to walk away from their current home, just to be able to pay more critical bills like food, and fuel costs," the consumer watchdog group stated.

With record numbers of new U.S. foreclosures, the National Mortgage Complaint Center is expecting an additional decline of U.S. home values of at least 15 percent through the end of 2009. As a result, the National Mortgage Complaint Center expects even more national and regional bank failures.