More than 1.5 million older Americans lost their homes since 2007, according to a new study released by the AARP Public Policy Institute, which also found that the percentage of seriously delinquent loans – those in foreclosure and loans 90 or more days delinquent – increased from 1.1% in 2007 to 6% as of December 2011 for people age 50 and older.
The AARP study determines that as of December 2011, 600,000 loans belonging to people age 50 and older were in foreclosure and 625,000 were 90 or more days delinquent. Furthermore, as of December 2011, 16% of loans belonging to people in this demographic were underwater.
The AARP study also finds that people age 75 and older have a higher foreclosure rate (3.2%) than those age 50 to 64 (3%) or age 65 to 74 (2.6%).
‘The collapse of the housing market has been especially painful for older homeowners,’ says Debra Whitman, AARP executive vice president for policy. ‘Older homeowners often rely on their home equity to finance their needs in retirement – things like healthcare, home maintenance and other unexpected needs. The fact that so many older Americans have no equity at all is troubling.’
The AARP study also examines foreclosure rates by race/ethnicity, income bracket, and prime and subprime loan type. Foreclosure rates of African American and Hispanic borrowers age 50 and older were 3.5% and 3.9% on prime loans respectively in 2011, nearly double that of white borrowers (1.9%). Foreclosure rates on subprime loans are markedly higher: as of 2011, among those age 50 and older, Hispanics had the highest foreclosure rate at 14.1%, Asian Americans at 13.9%, whites at 12.8% and African Americans at 11.5%.