Sunday, July 22, 2012
The foreclosure crisis has become a crushing problem for older Americans, more than a million of whom have lost their homes since the financial crisis.
About 1.5 million individuals age 50 and older lost their houses between 2007 and 2011, with those over 75 hit the hardest. Among this latter group of seniors, the foreclosure rate grew more than eightfold, to 3.2% of that group of homeowners.
In 1989, only 6.3% of Americans 75 or older had mortgage debt. By 2010 that figure had almost quadrupled to 24.2%.
While people under 50 are most likely to face foreclosure, the risk of “serious delinquency” on mortgages has grown fastest for people over 50, according to a new report from the AARP.
“As the mortgage crisis continues, millions of older Americans are struggling to maintain their financial security,” the report states.
Older Americans are losing their homes because of several factors: pension reductions, increasing medical costs, dwindling stock portfolios and falling property values.
Also, about 50% of households whose head is between 65 and 74 have no money in retirement accounts, according to the Federal Reserve.
The AARP report found:
· About 600,000 people who are 50 years or older are in foreclosure.
· About 625,000 in the same age group are at least three months behind on their mortgages.
· About 3.5 million—16% of older homeowners—are underwater, meaning their home values have gone down and they now owe more than their homes are worth.
-Noel Brinkerhoff
To Learn More:
Facing Foreclosure After 50 (by Robbie Brown, New York Times)
Foreclosure Crisis Hits Older Americans Hard (by Josh Lederman, Associated Press)
Nightmare on Main Street: Older Americans and the Mortgage Market Crisis (by Lori Trawinski, AARP Public Policy Institute) (pdf)
AARP Sues U.S. Government over Reverse Mortgages (by Noel Brinkerhoff and David Wallechinsky, AllGov)
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