The rate of foreclosures for those more than 50 years old has increased faster than the under-50 population from 2007 to 2011.
Young homeowners who were caught in the housing bubble in 2007 might perceive that it’s much harder for them than more established homeowners. However, according to a study released July 2012 by the AARP Public Policy Institute, the foreclosure rate for the over-50 population has increased more than that of under-50 homeowners.
The study, titled “Nightmare on Main Street: Older Americans and the Mortgage Market Crisis,” reveals that in December 2011, about 3.5 million over-50 Americans were underwater on their loans. That means they owe more than their homes are worth. “Between 2007 and 2011, more than 1.5 million older Americans lost their homes as a result of the mortgage crisis,” the study’s author, Lori Trawinski, writes. The overall serious delinquency rate of those under 50 is still higher than the over-50 group, but the relative increase in foreclosures shows that the older generation was not immune to the housing bubble.
Additionally, the AARP report shows that middle-income borrowers (incomes from $50,000 to $124,999) in the over-50 category suffered the most.
In the older age group, minorities were much more likely to face foreclosure than white borrowers.
The report suggests that further policy changes are needed to alleviate foreclosure and housing problems for all Americans. While many programs are directed to first-time homebuyers and younger homeowners, older Americans also need assistance to refinance their loans and get above water on their homes.
Such programs would include easy access to housing counseling, principal reduction and short-term financial assistance programs.
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