Eugenia Emerson with the Alliance of Californians for Community Empowerment looks out the window of a bus at a foreclosed home during a bus tour of foreclosed and blighted properties in Richmond, California. (Photo: Justin Sullivan/Getty Images)
The national foreclosure crisis that came after years of prejudiced sub-prime home loans continues to take away the most important asset many Americans have: their homes. Since 2007, there have been 6.6 million foreclosure filings in the United States, 5 million of which have gone through already. And of those foreclosed upon, a disproportionate number have been Blacks and Latinos, who were frequently targeted with toxic sub-prime loans even if they were eligible for prime loans. But while many minority families are still struggling with how best to keep their homes, or how to get a new home if they’ve lost theirs, a different and less talked about group is also being devastated by foreclosures: senior citizens.
According to a new report from the AARP, the foreclosure crisis has already claimed nearly 1.5 million older Americans homes. Millions of others are at serious risk of losing theirs, as well. Reports the Associated Press:
—About 600,000 Americans who are 50 or older are in foreclosure.
—About 625,000 in the same age group are at least three months behind on their mortgages.
—About 3.5 million—16 percent of older homeowners—are underwater, meaning the home value has gone down and homeowners now owe more than their homes are worth.
—AARP said that over the past five years, the proportion of loans held by older Americans that are seriously delinquent jumped more than 450 percent.
What makes foreclosing on a home particularly bad for elders is that, unlike young people who can still work, older people have less time and ability to get back into the labor force to make up what they’ve lost. Worse still, just as with other foreclosures, Blacks and Latinos are hardest hit when it comes to elderly foreclosures.
African-American and Hispanic borrowers age 50+ had foreclosure rates of 3.5 percent and 3.9 percent, respectively, on prime loans in 2011, double the foreclosure rate of 1.9 percent for white borrowers in 2011, according to the report.
All is usually not lost, of course. Seniors—and everyone for that matter—can help themselves by seeking professional financial planning and refusing to dip into their retirement savings unless it’s absolutely necessary. Having money to spend in the present day is nice and fun. But committing to saving money so that it attracts interest and grows is a decision that can be hugely helpful in later years. Sometimes you have to ask yourself: Would you rather have a cool car now, or a place to live when you’re 65?
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