Local Housing Crisis Tempered by Economic Development

We haven't seen the worst of home foreclosures.

One service says foreclosure notices rose 15-percent across the country in the first half of this year.

They rose by 5 percent in June alone.

Now experts believe they'll rise well into next year.

WDEF News 12's Bill Mitchell says the Chattanooga-Hamilton county area is seeing a similar picture...but with one major difference.

In March, the Obama administration launched a $50 billion plan to give the lending industry financial incentives to modify mortgages to lower payments for struggling borrowers.

SHEILA SHIPLEY, BROKER "what we were told is that they were going to try to work with some of the people to make their payments easier..what we've heard is that really did not happen."

Even the administration admits the job market and housing foreclosures will get worse before they get better. Local governments are doing what they can.

MAYOR RON LITTLEFIELD "In many cases they are going to lose their home anyway...it's a matter of having to do that..and do the least damage to their credit."

SHEILA SHIPLEY "they need to do the best they can..but do not give up and let the banks come and get it."

Struggling homeowners can call Chattanooga Neighborhood Enterprises for some advice on how to do that.

What happens to those foreclosed homes like this one on Aimee Drive? The asking price is 79.9, and some buyers are offering much more than that. It's on the board at Shipley's office where bids from bargain-hunters, investors and even builders are coming in.

SHEILA SHIPLEY "The banks will choose which ones they want ..But getting the financing on them is another story. "

RealtyTrac reports that the foreclosure crisis affected more than 1.5 million homes in the first six months of the year, and that number will grow. But Chattanooga still has its ace in the hole.

MAYOR LITTLEFIELD "we have the benefit here of all these wonderful economic activities that are unique to Chattanooga including Volkswagen, Alstom, Blue Cross/Blue Shield and others. We are insulated from the pain that the rest of the country and the rest of the world is suffering."

Chattanooga Neighborhood Enterprises set-up a hot line with counselors to assist local homeowners who may be facing foreclosure.

That number is 634-HOME.