It’s a sad state of affairs. In these days of economic strife, the average aging American — from the Baby Boomer Generation and older — can no longer depend on being able to survive financially in what was supposed to be their “Golden Years.” The Great Recession has done them in.
In a new report just released this week by the American Association of Retired Persons (AARP), the effect that the mortgage crisis is having on the nation’s population that is 50 and up is devastating — especially to the minority populations.
Titled, “Nightmare on Main Street: Older Americans and the Mortgage Market Crisis,” AARP’s Public Policy Institute enumerates a number of frankly scary statistics on how what was thought to be the country’s most fiscally stable age group, is floundering due to fixed incomes, pension cuts, rising medical costs, draining of their retirement accounts and other contributing factors.
Here’s some of the key findings:
- Between 2007 and 2011 more than 1.5 million older Americans lost their homes to foreclosure
- As of December 2011, approximately 3.5 million loans to people age 50+ were underwater
- Among borrowers who are 50 and up, the number of mortgages that are seriously delinquent rose 456 percent during the 5-year period
- Delinquency rates for borrowers age 50-64 and 75 and over were higher than those for the 65-74 age group
- Borrowers with incomes ranging from $50,000 to $124,999 accounted for 53 percent of foreclosures in the 50+ age group in 2011
- The foreclosure rate for subprime loans for the 50+ population increased sixfold over the five year period
- The foreclosure rate for African American and Hispanic borrowers age 50 and over on prime loans was double the foreclosure rate for white borrowers
- Since 2008, Hispanics have had the highest foreclosure rate on subprime loans among the 50+ population (the rate was 14.1 percent in 2011). African Americans age 50+ had the highest foreclosure rate in 2007. White borrowers age 50+ had the lowest foreclosure rate on subprime loans until 2010 when the rate went slightly above African Americans
As the New York Times noted, the foreclosure rate for Americans 75 and over grew more than eightfold from 2007 to 2011. While people under 50 are the most likely to face foreclosure, the risk of facing serious delinquency on their mortgages is growing the fastest for the 50 and up population.
The report calls for more policy solutions which once again would translate into government intervention. Should the government try to do more? Can it afford to do more given that so many of its programs so far have not fared very well?
We’d like to know what you think. Read the report and give us your input.