Options exist for struggling Miss. homeowners - WDAM-TV 7-News, Weather, Sports-Hattiesburg, MS

Jackson

Options exist for struggling Miss. homeowners

JACKSON, Miss. (AP) - Two years ago, Falona Larkins and her

husband Alexander bought their first house. She was a cashier at a

Dairy Queen, he was a Sheetrock hanger, and the monthly $552

payment was affordable.

That's until the payment jumped to $772 this year and Alexander

Larkins lost his job.

"We were going to have to move out of our house," said Falona

Larkins, 35, of Jackson. "The foreclosure date was Sept. 16." But

three days before foreclosure, Falona Larkins discovered one last

hope: a workshop run by the Neighborhood Assistance Corp. of

America.

"They stopped the foreclosure," Larkins said, "and now my

payments are $432 a month. I didn't know anybody could do anything

like that."

In fact, if you're a Mississippi homebuyer worried about making

your next payment, or even facing foreclosure, there is a lot that

can be done, but officials say many people don't know that.

"It's amazing to me that statistics show that more than half of

those whose homes are foreclosed never picked up the phone and

called their lender," said Julie McAdory, the Mississippi

education director for Consumer Credit Counseling Service of

Greater New Orleans.

"They're afraid," McAdory said. "They don't think there's

anybody out there who can, or will help them."

There's an abundance of free counseling services, HUD-approved

agencies, community organizations and more that will.

"Banks will work with consumers to modify their loans or make

the loans more affordable," said David Johnson Sr., senior vice

president and director of community development for BankPlus in

Jackson.

Apparently, affordable loans are in short supply in Mississippi,

which is among the top 20 states for foreclosures started,

according to the Mortgage Bankers Association.

Mississippi faces a nearly $235 million economic impact from

these foreclosures, officials with the Federal Deposit Insurance

Corp. have said. The estimate is based on losses in home values,

decreases in neighboring property values and diminishing property

taxes.

In many cases, homebuyers have been confounded by adjustable

rate mortgages.

"Some people sign papers without reading them," said Jeanette

Bland, director of NACA, the agency that helped Falona Larkins.

"Especially in the case of adjustable rate mortgages, the loan may

have been affordable, until the ink dried on the paper."

As for Falona Larkins, "I thought we had a fixed-rate

mortgage," she said. Within a year, that thought flew out the

window of her south Jackson home when her mortgage payment soared

by $52 to $604. The next year, it surged by another $168.

"I knew we couldn't afford that," Larkins said. "I didn't

know what to do until I happened to be talking to my sister-in-law.

She was trying to buy a house, and was going to a workshop held by

NACA. She said, 'They even help people with foreclosures."'

The NACA holds workshops for families, meets with them in

person, and counsels them on household budgets. "And we

restructure the loan package for the lender, according to what the

homeowner can afford," Bland said.

Scott Spivey is a spokesman for Mississippi Home Corp., which

was created by the state Legislature in 1988 to help low- to

moderate-income families and young couples purchase homes.

Spivery says a lot of people don't realize, "that the banks

don't really want to foreclose on them. That costs the banks money,

too."

"But people are embarrassed," Spivery said. "They take the

ostrich approach, but you can't afford to bury your head in the

sand on this. The longer you wait, the bigger that snowball gets

rolling downhill."

---

Information from: The Clarion-Ledger,

http://www.clarionledger.com

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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