Author: Tim Robbins
In communities all across the nation, an increasing number of retirees are faced with the very real threat of losing their home because they can no longer afford to make their mortgage payments with their interest rate adjusting.
According to RealtyTrac’s U.S. Foreclosure Market Report, more than 2.2 million foreclosure filings were reported nationwide in 2007, up 75 percent from 2006. This amounts to one foreclosure filing for every 92 households.
One of the driving forces behind the increase in the number of properties in foreclosure is the impact of monthly mortgage payments increasing for homeowners with riskier types of adjustable-rate and subprime mortgages.
These types of mortgages are especially risky for senior homeowners who are on a fixed or limited income. The higher interest rate and payment increases can put their ability to make their monthly mortgage payment at risk.
American Association of Retired Persons; has expressed concern regarding the growth of subprime mortgages among seniors. They claim that studies have shown that minority and older borrowers are disproportionately represented in the subprime mortgage market. In addition, American Association of Retired Persons is concerned that aggressive “push marketing,” often conducted by subprime lenders, leads to loans that may not be appropriate for senior borrowers.
Twenty-seven percent of senior households currently have a mortgage on their home and could be at risk. Growth in riskier mortgages for these seniors is primarily due to escalating housing costs, medical expenses, and energy prices, as well as an increase in credit card debt. (Average Senior carries over $25,000 in credit card debt)
Along with the rising cost of living expenses, seniors are especially vulnerable to foreclosure due to the cost of a prolonged illness or the loss of part of their income from Social Security when their spouse passes away.
Retirees facing foreclosure typically only have two options. They can try to refinance their mortgage, which includes past-due payments, late fees, collection fees, and legal fees assessed by the lender. With today’s tighter credit standards, this option may not be possible for many retirees. The other option is to try to salvage some equity by selling their home. However, after paying the added default and sales transaction costs, the retiree may be left with little money to buy another home and will be forced to rent.
The reverse mortgage provides a third option: it enables homeowners 62 and older to pay off their existing mortgage and to have no mortgage payment for as long as they live in their home.
“Because credit and income are not used to qualify for a reverse mortgage, we are able to help our senior customers save their home from foreclosure. “There is nothing more gratifying than the relief on a customer’s face when we tell them that they will be able to stay in their home.”
The reverse mortgage option may not work for all senior homeowners, especially those with a high mortgage balance. If possible, it is a good idea to explore the reverse mortgage option before they go into default on their mortgage. This way they can avoid the increase in their mortgage balance from added fees so they have a better chance of qualifying for a reverse mortgage. In some cases where the mortgage balance is higher then the limits and or the appraisal, we can work with their lender for a short payoff. No lender today really wants to foreclose on a home. If you see that you are in trouble or expect that you maybe heading for trouble with your mortgage you should contact a Reverse Mortgage lender to see how they maybe able to assist you.
About the Author:I am a Reverse Mortgage Specialist I have spent over 20 years as a Real Estate broker and the last 10 years in the mortgage industry, and 5 of them providing Reverse Mortgages. My years as a professional, I have always felt that helping our seniors is helping the back bone of this country. Our seniors are the ones who made this country great and in the time of their lives that is so suppose to be their golden years it is in many cases painted black. I have dedicated my life to helping them achieve some sort of financial independence and help to enjoy the fruits of their labors.
Article Source: http://www.articlesbase.com/mortgage-articles/reverse-mortgage-rescues-retirees-from-foreclosure-and-or-interest-rate-adjustments-679665.html
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