Elderly Americans Most Affected by Recent Spate of Foreclosures
The U.S. housing crisis has led to several dire consequences that are still taking place frequently to this day, such as foreclosures. According to the AARP, America’s ongoing foreclosure problem has particularly affected elderly individuals, especially those of African-American or Hispanic heritage.
According to AARP policy chief Debra Whitman, the worldwide economic recession proved that home ownership does not necessarily equate with financial stability for older people. Many elderly Americans have had difficulty making their mortgage payments on time, despite a lot of them having to work multiple jobs.
The AARP defines “elderly” individuals as those aged 50 and above.
The AARP’s report revealed that a total of 3.5 million elderly Americans, or 16 percent of all homeowners surveyed, are now considered to be underwater borrowers. An underwater borrower is one who owes more on his/her mortgage than the present value of the home.
625,000 elderly Americans are three months or more delinquent on their mortgage payments, while 600,000 from the 50-and-up age group have their homes in foreclosure. The percentage of delinquent loans in this age group also rose 450 percent over a five-year span. The AARP cited several reasons for the alarmingly high numbers, mainly fixed incomes for older borrowers who are still working, or lower salaries for those who were forced into working again after a period of retirement or inactivity.
As for younger borrowers, those under 50 are less frequently behind on their payments by three months or more, according to the report. Unfortunately, their rate of delinquency is shooting up even faster than that for older homeowners.
The report further added that 3.9 percent of elderly Hispanic homeowners and 3.5 percent of African Americans have their homes in foreclosure, as opposed to 1.9 percent for Caucasian homeowners at least 50 years of age.