Jewel Lewis-Hall, 57, works two jobs. Her husband lost his job at a farmer’s market and has been unable to earn much money since. They live a fairly modest lifestyle, driving a 1991 car for example, but they are still unable to make enough money to pay the mortgage on their Washington home. They had been making late payments for around a year when the dreaded foreclosure letter arrived. Now, what was once a bright future is much less certain and hopeful.
The housing market crash hit older Americans particularly hard. According to a new AARP Public Policy Institute report, over 1.5 million people 50 years and older have lost their homes since 2007 and another 3.5 million are currently at risk of foreclosure. Moreover, from 2007 to 2011, homeowners 50 years and older experienced a much higher foreclosure rate than those under 50. Unfortunately, the long-term prospects for older Americans are quite bleak.
While most homeowners hope to ride out the housing market crash to recovery, many older homeowners do not have the time to wait for prices to increase. A full recovery could take years or even decades and their golden years are on the near horizon. Unfortunately, many in the “baby boomer” group were counting on the value of their homes as their retirement nest egg.
According to 2010 Federal Reserve data, over half (51 percent) of families with a head of household between 65 and 74 years old had no money in retirement savings. Of those who did have savings, around half of them had less than $100,000. The percentage of families with no money in savings jumped to 67 percent for families with a head of household 75 years or older.
The problem is not limited to lower income families. The AARP study reports that in 2011, 53 percent of foreclosures within the 50 and older population came from middle class families with incomes ranging from $50,000 to $124,999. Homes with incomes below $50,000 accounted for only 32 percent of foreclosures within the same age range.
The AARP reports that 80 percent of Americans 50 and older own their homes. The percentage of people with mortgage debt and the amount of that debt has continued to climb for the last 20 years. The increased borrowing may be a result of older homeowners using their home equity to subsidize their retirement. Decreased home values may be forcing seniors to dip deeper into their retirement accounts to pay a first or even second mortgage. That leaves less money for food and other necessities.
The situation is dire for many, but most especially for older American homeowners. For those in need of assistance, an experienced attorney can offer useful advice and resources for consumers on the verge of foreclosure.