Taking Back Our Neighborhoods: Foreclosures - Action News 5 - Memphis, Tennessee

Reported by Joe Birch

Taking Back Our Neighborhoods: Foreclosures

Updated:

MEMPHIS, TN (WMC-TV) - This week, Taking Back Our Neighborhoods takes on a whole new meaning in the foreclosure crisis.

The Feds are sending nearly 25 million dollars to help Memphis neighborhoods hardest hit by foreclosure.

Frayser zip code 38127 has suffered 408 foreclosures this year, and 5,743 since the year 2000.  It's number one on the list those hardest hit by foreclosures.

Recently, the Memphis City Council learned Memphis will receive federal dollars to redo abandoned homes for low income people:

"We will have to use the funds to redevelop the properties either for home ownership or rental for low to moderate or middle income individuals," said Beverly Goines of Memphis Housing and Community Development.

Westwood - 38109 - ranks second in foreclosures, with 331 this year and 5,107 since 2000  City Housing chief Robert Lipscomb says as foreclosed properties are renovated, the challenge will be finding buyers with the credit worthiness and low incomes that qualify for help.

"We've even got to look at lease purchase programs, because the people that have been foreclosed on are going to have a credit problem," Lipscomb said.

The airport area ranks third in Memphis foreclosure, with 293 this year and 4,305 since 2000. The business community and local government have created a neighborhood stabilization plan with one goal:

"Bottom line: what can we do to keep people in their homes?" said First Tennessee Bank's Dondi Black.

The numbers are mind boggling, from Raleigh to Hickory Hill, Kimball and Getwell to Pine Hill, Whitehaven, back to Hickory Hill and on to the Defense Depot area. In fact, local lenders hold 25 percent of Memphis mortgages. Competing banks are now working together to provide aid to those asking for help on the verge of losing a home:
 
"That's looking at a modification of terms of their existing mortgage, remediation, things that are really more proactive," Black said.

In the top ten foreclosure zip codes, half the mortgages were subprime where people were forced out as balloon payments started rising. Now the city, county and state are considering joining a class action lawsuit against subprime lenders:

"We're investigating it from a cost standpoint because before we engage we need to know how much it's going to cost," Lipscomb said.

Anyway you cut it, the numbers are grim. In 2008, Shelby County has suffered a grand total of 7,100 foreclosures, and since 2000, nearly 60,000 have lost their homes this way.


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