New Economy, New Reality Part 3

But here at home we found the effects of predatory lending and mortgage fraud arent having as great an effect on the local housing market as in other regions of the U.S. For the new generation of home buyers, the American dream is getting tougher. Chris Selby: "Its a little harder I think. Local home builders and prospective home buyers agree: Theres a problem in Americas housing market. Chuck Bradshaw: "It has been a little in a down cycle a little bit". Chris Slelby: "Nationally there are some issues obviously". According to one report U.S. home foreclosures rose 65% in the last year. Chris Selby, his wife Lisa and their 2 kids are looking forward to moving into their new home. Chris tells us, "Were looking to get a little more space, stay in our school zone". But 1st, the Selbys have to sell their old home. Chris Selby: "Im confident well find a buyer for our house". Confident, despite current housing woes. Hal Hinchliffe: "Result of the sub-prime meltdown as we call it in the industry". Mr Hinchliffe has been in the mortgage banking business over 30 years. He tells us, "Theres been a real tightening of credit underwriting of home mortgages". Hinchliffe says the fault isnt with your hometown banks. He says fly by night mortgage brokers and powerful financial firms are to blame. Hinchliffe: Really Wall Street created a product where they were not verifying peoples income". Whats been described as predatory lending practices boils down to this: People who couldnt afford home loans got them anyway. And the lenders actions, may be criminal. The FBI launched an investigation recently due to skyrocketing reports of mortgage fraud. Chuck Bradshaw: "Wow, thats an amazing statistic". Bradshaw is with one of the largest home and commercial builders in the Ark-La-Miss He says the regional housing market seems to have been spared the worst. He says, "In the Monroe area what we see is its a pretty stable economy". Veteran real estate agent Cheryl Yarbrough agrees, "The market is as good as I think its going to be". Despite the mortgage crisis you can still find lots of new home construction in our region. Chuck Bradshaw: "We still have buyers, low income, middle or the high income homes". But a mortgage isnt for everyone. Pat Anderson: "You just always have people looking to rent". People like single mom Rainey Thompson. It was love at 1st sight when she turned the key on her West Monroe home. She tells us, "I love the layout, the neighborhood is wonderful, knew everyone on the street". But for Thompson being tied down to 30 years of monthly payments seemed too much. She says, "Im not sure I want to get into a mortgage right now with the economy the way it is". Thats where Pat Anderson comes in. He says, "I manage 64 properties and were getting into the lease purchase more". A typical lease purchase is a lease combined with an option to purchase the property within a specified period, usually 3 years or less, at an agreed-upon price. the borrower pays an option fee, 1% to 5% of the price, which is credited to the purchase price. Its a good way for buyers with rough credit to purchase their 1st home or like a single mom who doesnt want to be tied down to a mortgage. Rainey Thompson, "The lease purchase is for me". One downside to a lease purchase, dont buy the home, lose your investment. So while the U.S. housing crisis continues, our local real estate market seems to be weathering the storm. Hal Hinchliffe of Progressive Bank, "Its not as severe of an impact as you see in California, Florida". That means mortgage bankers like Hinchiffe are still giving homes loans to families who qualify for them. Ha; Hinchliffe: "Were doing what we were always supposed to be doing trying to help good people- who are qualified achieve the dream of home ownership". Home builders like Chuck Bradshaw are staying busy, "Were still producing homes and we still have buyers". Real estate agents like Cheryl Yarbrough continue to pursue their goal, "To help anyone find the home of their dreams". And though it may seem a little tougher in 2008 American families can still get the same thing their parents and all the generations whove come before worked so hard to earn. A place to call home. Rainey Thompson, "Im just trying to get my little peace of the American Dream Chris Selby, "Were living the American Dream". And despite a housing crisis and a slowing economy, here in the Ark-La-Miss we found that dream, still alive. Next week we conclude our month long series New Economy, New Realities. Well take a look at the stretching safety net. With the U.S. economy in a slowdown how are the poorest members of our society handling it? How are food banks, churches and non profits like the Red Cross dealing with a decrease in funds as their services are apparently needed now more than ever. Thats next Thursday on New Economy, New Realities on NBC 10 news.