NATCHEZ — Location, location, location. It’s everything in real estate. As cities across the country struggle with a stumbling housing market, Natchez appears to be weathering the crisis without injury.

While Natchez isn’t immune to the subprime mortgage problems fueling the fallout, Britton & Koontz Senior Vice President Frances Cothren insists that the area’s real estate market isn’t suffering.

“The market has held up very well over the last five years,” she said. “Everybody expected it to tank, but it hasn’t here.”

As the national housing market was deluged with foreclosures from subprime loans gone bad, Natchez was still feeling the positive effects of Hurricane Katrina, she said.

“In our market, the bubble hasn’t burst,” Cothren said. “Katrina has boosted us a lot.”

Realtor Sue Stedman said that the national housing market began to suffer in 2006 as subprime loans became more popular.

“There was a push to try to get people in houses,” Stedman said. “It caused a problem when people got adjustable rate mortgages. When the interest rates went up, they couldn’t pay for it.”

Stedman said a lot of these borrowers couldn’t afford to stay in the house and couldn’t afford to sell the house.

“These loans were expensive,” Stedman said. “When you can’t stay and you can’t sell, foreclosures usually happen.”

As more borrowers faced foreclosure, subprime lenders struggled to stay in the black. Lending institutions packaged the risky, subprime loans with more reliable prime loans and sold them to investors worldwide. Credit problems then set in as investors became leery of the risky loans. One of the nation’s largest mortgage lenders, Countrywide Financial Corp., announced in August that it had cut approximately 500 jobs in an attempt to ride out credit problems.

Cothren said the Federal Reserve’s recent interest rate cut was an attempt to pull the market out of trouble.

“Our market reacts ahead of time, so we had a small drop in rates before the announcement,” Cothren said. “The rates usually level back off after the cut though. As the economy reacts positively, it will go back up.”

Brandi McBride, owner of First Mortgage in Natchez, said that her company has yet to see any negative effects from the national market meltdown.

“We haven’t seen it yet, but that doesn’t mean we won’t,” McBride said. “It just depends on how many locals got these types of loans.”

McBride said she typically advises people to clean up their credit and reapply instead of taking a more expensive subprime loan.

“These loans typically have adjustable rates and usually start out higher than a standard loan,” McBride said. “After the initial fixed period, the rates can go up every six months. We’ve really tried to stay away from that situation.”

It’s hard to point a finger at who is to blame for the housing mess. Borrowers typically blame the lenders and lenders typically place the ultimate responsibility on the borrowers.

“People got home purchasing happy and got into trouble,” McBride said.

“Lenders provided a product and there was push to promote it,” Stedman said. “But people took advantage of it.”

Cothren pointed out that there has been a tightening of loan criteria in the wake of the national credit crunch and that she expects it to tighten further, even in Natchez. She doesn’t, however, expect the increased loan scrutiny to negatively affect the area’s market.

“If our market slows any, it’s not because of the subprime problems,” Cothren said.

McBride, however isn’t as sure that Natchez won’t be affected.

“We won’t see the effects that the larger cities have seen,” she said. “But it could trickle down,” it could hit here.”