Retirees Hit Hard By Foreclosures

Hey Everyone,

This is your Hard Money Lender Billy A. I just came across a great article I thought was worth sharing, by Andrea Coombes from Marketwatch.com,  about the effect foreclosures have had on our senior citizen community:

People Age 75+ Have Highest Foreclosure Rate Among Americans 50+

By Andrea Coombes, MarketWatch

SAN FRANCISCO (MarketWatch) — Golden years? Not for an increasing number of older Americans who are losing their homes to foreclosure.

One of the hardest hit groups: Those aged 75 and older, according to a report by AARP based on mortgage data from 2007 through 2011.

All told, more than 1.5 million Americans aged 50 and older lost their homes in the five years from 2007 through 2011.

While the percentage of foreclosures was higher among younger Americans, the rate for homeowners age 50 and older grew faster in recent years.

And in that over-50 group, the 75+ crowd had the highest foreclosure rate in 2011, according to the AARP report, which cited data from CoreLogic, a provider of mortgage-loan data, and other sources.

Among homeowners age 75 and older, 3.2% lost their house to foreclosure in 2011, up from the 0.33% in that age group who faced foreclosure in 2007.

That compares to 3.5% among homeowners under age 50 in 2011, up from 0.42% in 2007.

The foreclosure rate was 2.9% in 2011 among all homeowners 50 and older, up from 0.3% in 2007.

Bigger debt loads

While the AARP report does not pinpoint precisely why older Americans faced this predicament, it cites data that helps explain why so many more people had trouble paying their mortgage bill.

For one, older Americans greatly increased their mortgage-debt load in the two decades preceding the housing-market crash, with the 75+ age group notching the greatest increase in mortgage debt over the past 20 years.

While financial planners often advise people to pay off their mortgage before they retire, fully 24% of households headed by a 75-year-old or older person had mortgage debt in 2010, up from 6% in 1989, according to the AARP report, which cited the Federal Reserve’s Survey of Consumer Finances.

Mortgage debt also increased among other 50+ Americans: 54% of families headed by a 55- to 64-year-old had mortgage debt in 2010, up from 37% in 1989. And 41% of families headed by a 65- to 74-year-old owed money on a mortgage, up from 22% two decades earlier.

“This increase partly reflects increased borrowing that was spurred by historically low interest rates and high home values prior to the housing market collapse,” the report said. “It may indicate that the oldest borrowers have tapped their home equity to finance their needs in retirement.”

For full story click here:   Retirees Article

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That’s all for now.  Make it another great day!

Your Hard Money Lender,

Billy A