By Marsha Thompson
marsha@wlbt.net

It's the new reality of real estate. Mississippi leads the nation in the number of people behind on their house notes. Houses are sitting on the market for long periods of time. Prices are being reduced in some cases and foreclosures are adding up.

You might say some tough times are occurring in Mississippi and Louisiana. Risky subprime loans or adjustable rate mortgages are made to borrowers with low credit scores. Little downpayment. They offer teaser rates, which are now ballooning. "We have a subprime market collapse." According to Quentin Whitwell, Executive Director of the Mississippi Mortgage Bankers Association the sky is not falling and that mortgage foreclosures are not near as high in Mississippi as other states. But Whitwell adds, "It''s painful, there is no doubt about it." We found painful reminders in many sections of Metro Jackson.

Deterioration of the housing market has caught some homeowners, builders and sellers off guard. According to Kelly Hogue, an auctioneer, "They tell me (realtors) they have so many listings they are out of signs, not so many closings." WLBT News found a home on Wheatley in Ridgeland in foreclosure. It goes to the seller with no repairs and no warranty. Right around the corner another one on the chopping block. Even new construction is left on the market for months. Some builders are facing hard times like Michael McElroy. McElroy told us he has 8 or 9 homes in foreclosure.

Hogue tells us in her dealings with real estate, there are several builders in borderline situations, "Some of the builders I've talked to are on the brink of foreclosure and the banks are leaning hard on them." To move inventory unique approaches are emerging including no reserve auctions at homesites and informational radio annoucements as you drive into prestigious subdivisions.

The Mississippi Mortgage Bankers Association believes the market will turn positive in the future, exactly when is anyones guess and the blame for problems is put squarely on subprime loans. Whitwell says, "We have a subprime market collapse, that is continuing to bleed and is still going on. We have not figured out where the end is." He also insists the current state of affairs in the real estate market should not be hyped by the media or blown out of proportion.

On the brighter side, we are told, for those who can afford to make a move, it's a buyers market.

Predatory lending with subprime mortgages is considered a leading cause of foreclosures across the country. A predatory lending bill has been re-introduced in Congress. Freddie Mac launched a consumer education campaign in Mississippi. The campaign utilizes brochures, flyers and the www.dontborrowtrouble.com website to educate consumers who are most vulenerable to predatory lending.