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Seniors Caught In Foreclosure Crisis
Seniors Losing Homes To Foreclosures




The worse economic crisis since the Great Depression is leaving many seniors with the
prospect of losing their homes to foreclosure.

Equity in the home is retirement income.

We believe that seniors have already paid off their houses, or that they have a considerable
amount of equity built up in the home. In reality, millions of seniors are having trouble making
ends meet. House values have declined since 2006 and equity has disappeared. Rising health
care costs have resulted in many seniors stripping the equity from their houses just to survive.
Seniors spend 25% of their income on healthcare. Other seniors have
refinanced in order to
help family members weather the economic storms.

These events have left many seniors thinking of ways to live through their golden years. Being
on a fixed income doesn't make the decisions any easier. We find that many seniors are
returning to the workplace. The jobs are not high paying, but they provide some income and
more importantly, they provide some benefits. Even if all the new job does is pay the medical
bills and the prescriptions, it's worth the effort.

Some homeowners who have loss their jobs and are unable to secure another job are opting for
early Social Security withdrawal.  In 2010 these seniors reached over 2 million, up from 1.7
million. Considering that they receive a check for 25% less, we can see why seniors are in dire
financial trouble. At the end of 2007 Americans 50 years and older accounted for 28% of all
delinquencies and
foreclosures.

No mortgage for seniors, but foreclosure is still possible.

Many seniors who took out reverse mortgages are just a few months away from foreclosure.
With a reverse mortgage the homeowner does not have to make mortgage payments. However,
the property taxes, the house insurance and the maintenance of the house still have to be
current. This is not the case for thousands of seniors. They have stopped paying their property
taxes and insurance.

Most
reverse mortgages are made by the Federal Housing Administration (FHA) through its
Home Equity Conversion Mortgage (HECM). The FHA lists about 530,000 active reverse
mortgages on its books, and the agency is trying to help seniors by offering counseling with
regards to avoiding foreclosure. To remain in compliance lenders have to make sure that the
property taxes and home insurance are paid on time. Generally lenders would pay the taxes and
insurance to remain in compliance, then add the amount to the outstanding balance. However
with house values in a free-fall lenders can not continue to advance money to the seniors, and
ultimately, have no choice but to foreclose.

As the housing crisis and economic conditions worsen, seniors are becoming more vulnerable
to predatory lending. They are scared, they do not understand the complex terms of mortgages,
especially the
adjustable rate mortgage and they usually get talked into borrowing more money
than they need.

They do not always know that they are signing for a
new mortgage. For example, a homeowner
might sign a contract for home improvement. The overpriced improvements are then flipped into
a
high interest mortgage, and the mortgage broker collects an inflated fee.