MPEC Report Examines Mississippi Foreclosure Rates

Mississippi homeowners are among the hardest hit in the nation when it comes to trouble in the housing market, according to a new report released by the Mississippi Economic Policy Center (MEPC).The state, which has the highest rate of subprime lending in the country, also has the eighth highest foreclosure rate and the highest percentage of borrowers with past due home loan payments in the country with 11-percent of loans past due, compared to six percent of mortgages nationally.

Part of Mississippi's troubles stem from Hurricane Katrina which affected many Mississippi homeowners and hindered their ability to keep up with their mortgage payments. Since the hurricane hit the area two and a half years ago, 12.04-percent of Mississippi homeowners have been past due on their payments, compared to 4.82-percent of loans nationally.

“The foreclosure crisis is a devastating issue that affects every individual and business in Mississippi. It is stripping families of their wealth, destabilizing communities, and undermining our state's economy,” said Bill Bynum, chief executive officer of ECD/HOPE (Enterprise Corporation of the Delta/Hope Community Credit Union). “It is vital that fast and decisive steps are taken to help people save their homes and eliminate the lending practices that fueled this crisis.”

Although defaulting on a loan is extremely devastating for individual families having trouble making ends meet, The Center for Responsible Lending foresees more widespread problems for states like Mississippi, which have high foreclosure rates. They estimate that foreclosures on subprime loans originated in 2005 and 2006 will result in overall neighborhood property value loss, with 44.5 million homes across the United States losing approximately $223 billion in value. An estimated 41,231 homes in the Jackson metro area alone are projected to lose $39.4 million in value.

In addition to their findings, the MPEC report provided recommendations outlining ways in which the state could help current and future homeowners prevent foreclosure.

Recommendations include:

Enact strong anti-predatory lending laws and increase support for comprehensive homeowner counseling to protect consumers before they enter into a loan agreement

Create a default loan program to assist those in danger of losing their homes

Increase foreclosure notice requirements and support foreclosure counseling

Require county governments to automate data collection on foreclosures to more closely monitor the effects of foreclosure

Create a statewide task force to identify and pursue foreclosure prevention and reduction policy options.

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