Homeowners over 50 at risk
It seems that homeowners over the age of 50 are not immune from the foreclosure crisis.
A
study released yesterday by the AARP, an organization that lobbies for people in that demographic, found homeowners age 50 and over represented about 28 percent of all delinquencies and foreclosures in the last half of 2007. There were 684,000 homeowners over 50 who were in trouble with their mortgage, and of that figure about 50,000 had already lost their home or were in the foreclosure process.
The study also found that older Americans who had subprime loans were about 17 times more likely to be in foreclosure.
Apparently it was thought folks in this demographic would not be as likely to fall behind on payments or lose their homes because they would have enough equity at this stage of life to protect them. However, that was before the market started to turn and home values began to sink.
Another recent study by the Center for Retirement Research at Boston College found that during the recent housing boom older households accessed their home equity more aggressively than younger homeowners, which has left them in worse shape for retirement. It found that people approaching retirement age (50 to 62) have discovered their net worth is 14 percent lower than it would have been without the housing boom. That’s because they tapped their home equity and spent much of the cash -– perhaps on expenses such as home improvement or college tuition for a kid.
This puts homeowners over 50 in a real jam at a time when they should be shoring up their retirement nest egg.
So what do you do if you’re nearing retirement, or already retired and living on a fixed income, and have to try to save your house? And what about people who have parents or grandparents in this situation? Are you worried about helping them keep their homes, on top of trying to pay your own mortgage?
Enjoyed this post? Get blog updates delivered to your reader. Click here.
