Troubled economy leads to troubled mortgages for Mid-Southerners

MEMPHIS, TN (WMC-TV) - The troubled economy is not making it any easier to buy a home.

Now people are racing to find ways to head off a wave of potential foreclosures. A problem which could hurt borrowers, neighborhoods and communities.

Valerie Myers is worried about her mortgage.

"I went into an adjustable rate on my mortgage and when the rate had starting going up, I realized I was in trouble," Myers said.

Myers said she bought her home four years ago, but she is unable to keep up with her house note.  She is left with no choice but to try to restructure her mortgage, so that she can get a better interest rate and lower monthly payment.

"We're probably paying double the cost of what an average person is probably paying on a $120 thousand dollar home," Myers said.

Unfortunately, Myers isn't alone.  Desperate people across the Mid-South are struggling to keep their homes after banks have foreclosed on them for defaulting on their loans.

According to our partners at the Memphis Daily News, from 2005 to 2007 Frayser's 38127 zip code was Shelby County's leader in foreclosures and bankruptcies.  Cordova's 38016 zip code saw a 128 percent increase in foreclosure sales within the same two years.
 
"A high percentage of them are people who got caught up in sub prime loans, many of them predatory loans and are just not able to afford the monthly payments," Webb Brewer of the Memphis Area Legal Services said.
 
Brewer said his organization uses federal funding to provide free counseling to those facing foreclosure by a bank or mortgage lender.

Counselors work to help people extend the terms of their current loans, lower their interest rates or even help them sell their home before foreclosure destroys their credit.

Click here to e-mail Jamel Major.