AARP Article “A First Look at Older Americans and the Mortgage Crisis”
by Jeffrey L. Bangerter
September 10th, 2008
A new report from AARP shows that “about 634,000 Americans age 50 and older are between 30 an 180 days late on a first mortgage.” http://assets.aarp.org/rgcenter/econ/i9_mortgage.pdf
AARP purchased a 2.5 million person list from a much larger database to compile the data.
The report shows that “Foreclosure rates are higher for African American and Hispanic homeowners, than for Caucasian homeowners, in all age brackets.”
Maybe someone should be telling these folks to get a reverse mortgage so they will always have a home to live in.
Maybe AARP should think about being a little more positive about the reverse mortgage loan in light of this report.
Since the reverse equity mortgage know as a Home Equity Conversion Mortgage, has no chance of foreclosure or default due to non-payment.
One of the main reasons for taking out a Home Equity Conversion Mortgage is to eliminate a current traditional mortgage that requires monthly repayment.
This allows the older American to live a much more comfortable life without the financial worry of making mortgage payments or even losing their home.
In my opinion the recent changes to the reverse mortgage rules pushed on the industry by AARP have already begun to hurt the industry and will result in less reverse mortgage lenders for a senior to pick from.
You will also see higher interest rate margins so the lenders that do remain can recover the lost revenue that the new rules mandate; this will cause the equity to be eroded faster than paying a little more in up-front costs.
AARP and congress must know this, do they just want to look like they did something good and don’t think anyone will notice the increased long-term cost?
In this current economic environment the reverse mortgage loan makes more sense for seniors yet all you hear from the press is scary news.
It is time AARP and other senior advocates get back to talking about the benefits of getting a reverse mortgage loan, like no chance of foreclosure!