Kirsten Terry

As published in Scotsman Guide's Residential Edition, October 2007.

Picturing a world without option ARMs isn't impossible. Just check out Jackson, Miss.

Mississippi is one of the few parts of the country where adjustable-rate mortgages haven't caught on -- these loans comprised only 0.6 percent of the state's home mortgages in 2006, a lower percentage than in any other state.

Low ARM volume can indicate two things: a borrower population unable to afford the higher payments of a loan-rate reset and brokers who aren't trying to convince them otherwise.

Both of these likely ring true in Jackson, Mississippi's capital and largest city. More than a quarter of its residents live below poverty level, with the median household income well below the national average and with no recent job growth.

Jacksonians aren't sitting on much equity, either. Although almost 60 percent of the city's residents own their homes, 83 percent of those homes are worth less than $150,000.

But legislators have acted to ensure buyers ready to fill the nearly 2,000 homes on the market can find brokers they can trust. This past summer, Mississippi overhauled its broker-licensing qualifications, ensuring that only experienced brokers without criminal records can originate loans in the state.

And these rules are enforced: In August, a Jackson broker was sentenced to three years in federal prison for originating loans with fraudulent documents.

VITALS

↓ Population: 176,614

• Population in 2000: 184,256
• Rank (U.S.): 93rd largest metropolitan area
• Metropolitan-area population: 529,456

↓ Average commute: 18.8 minutes

• Average commute in 2000: 20.1 minutes
• U.S: 25.1 minutes

↑ Median household income: $31,177

• Median household income in 2000: $30,414
• U.S.: $46,242

↑ Median age: 31.9 years

• Median age in 2000: 31 years
• U.S.: 36.4 years

↓ Unemployment (June): 6.3 percent

• Unemployment, June 2006: 6.5 percent
• U.S.: 4.5 percent

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