Numbers Don't Lie
This recent article in the Chicago Tribune and this one published on CBS Market Watch reveal that seniors aged 75 and up are losing their homes to foreclosure faster than any group over age 50. Since the mortgage and real estate markets crashed in 2007 more than 3% have lost their homes to foreclosure: an 873% increase over the rate just a year before.
A Tight Spot
Seniors who find themselves upside down (i.e. their mortgage exceeds the value of their home) are in a particularly tight spot. These seniors likely can't wait for the market to restore their homes' value, which experts say could take decades, and cannot refinance because they are on a fixed income.
Savings to the Rescue?
Since many seniors over 75 rely on social security their homes are their de facto piggy banks. Of course that would only work if they could sell at a fair price. If the market is too soft to yield a fair price, there are no savings in the home. The same can be said of many retirement plans.
In future posts we will examine what seniors can do to cope with the stagnant state of the real estate and stock markets.
Mazyar Hedayat is an Attorney and holds an MBA from the University of Michigan. M. Hedayat & Associates has represented clients in and around the Chicagoland area for nearly two decades.