As everyone knows, the foreclosure crisis hit Americans of all backgrounds hard. And, despite all the talk about our so-called “recovery,” most people are still feeling the lingering effects of the Great Recession. Now, a new report from the American Association of Retired Persons Foundation titled “Main Street Nightmare: Older Americans and the Mortgage Market Crisis” reveals two disturbing trends: First, many Americans age 50 and older are in foreclosure. or in danger of ending up in foreclosure. Second, the foreclosure rate for Americans age 75 and older has been higher than for most other groups of people over 50 years of age.
This reverses the trend that had been established in recent decades, where most older Americans had paid off their mortgages by the time they reached retirement age and had some security when it came to their homes and assets. The past 20 years have seen a reversal of those trends.
The study is the first of its kind and measures the effects of the foreclosure crisis on Americans age 50 and older from 2007 to 2011.
Among the main findings of the report:
- 3.5 million Americans over the age of 50 are “underwater” (16% of loans).
- 600,000 Americans age 50 and older are in foreclosure.
- 625,000 Americans age 50 and older are 90 days or more delinquent on their mortgages.
- 1.5 million Americans age 50 and older lost their homes to foreclosure between 2007 and 2011.
- Serious delinquency rates for borrowers 50-64 and 75+ are higher than those for the 65-74 age group. People in the 75+ age group, in particular, face increased mortgage and property tax expenses and decreased median income.
- The increase in the foreclosure rate was highest for those 75 and older.
- Many people deplete their retirement and savings in an attempt to save their home. Seniors face more challenges recovering from foreclosure because they have fewer years of work left to rebuild their finances; Furthermore, those who have lost their jobs face longer periods of unemployment, and when they do find work, it is often for a lower salary than they had.
- The presence of foreclosed homes in a given neighborhood is associated with increases in anxiety and suicide attempts, high blood pressure, and physical complaints that may be stress-related.
There are many options when you fall behind on your mortgage, including:
- Loan Modification – where the terms of your mortgage are renegotiated to make your monthly payment more manageable.
- Short Sale – In which the lender agrees to accept less than the full amount owed on your mortgage as a full payoff.
- Forbearance: when a payment agreement is reached for the amount of the arrears.
- Deed-in-Lieu of Foreclosure – When the lender allows you to deliver a deed to the premises as a settlement of your obligations under the mortgage.
- Bankruptcy.
the only thing you should No to do is procrastinate. Time is of the essence. Beware of scammers who offer help for a large up-front fee. Instead, use a government-approved agency or a trusted attorney.