Senior Citizens Entering Retirement With Large Amount Of Mortgage Debt

By
Mortgage and Lending with George Souto NMLS #65149 FHA, CHFA, VA Mortgages NMLS #65149

The increasing concern over the number of college graduates who are starting off their career with huge student loan debt, is well know and has been highly publicized.  What is not as well know, but in my opinion of equal concern, is the increasing number of Senior Citizens Entering Retirement With Large Amount Of Mortgage Debt.

The latest data from the CFPB's Office for Older Americans shows the number of Americans 65 and older with mortgage debt has grown from 22% in 2001 to 30% in 2011, and this increasing mortgage debt among senior citizens appears to still be rising.  Data from the CFPB's Office for Older Americans further shows that from 2007 to 2011, the number of homeowner between the ages of 65 and 75 who are 90 days or more delinquent on their mortgage rose from .85% to 4.96%.  That is more than a 4% increase in just 4 years of senior citizens who are at risk of losing their home to foreclosure.

These increasing number of senior citizens at risk of losing their homes, is mainly due to income loss at time of retirement.  More and more American Workers are not setting money aside for retirement.  A couple of reasons for this is lack of financial planning, but even those who have set funds aside in retirements plans have found themselves dipping into those funds due to financial hardships such as loss of jobs.  Others have set money aside but the increasing cost of living has made it difficult for their retirement funds to keep up. 

Whatever the reason this is one more sign of what the economic condition of this country have helped to create.  Where once senior citizens were able to pay off their mortgages while they were still working, today they are not, resulting in Senior Citizens Entering Retirement With Large Amount Of Mortgage Debt.  What was suppose to be the golden years for many senior citizens are not so golden anymore.

 

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 Info about the author:

George Souto NMLS# 65149 is a Loan Originator who can assist you with all your #FHA, #CHFA, and #Conventional #mortgage needs in Connecticut. George resides in Middlesex County which includes #Middletown, #Middlefield, #Durham, #Cromwell, #Portland, #Higganum, #Haddam, #East Haddam, #Moodus, #Chester, #Deep River, and #Essex. George can be contacted at (860) 573-1308 or gsouto@mccuemortgage.com

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  1. Ernie Steele 05/29/2014 10:52 PM
Topic:
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Rainmaker
317,124
Bill and MaryAnn Wagner
Wagner Real Estate Group - Galloway Township, NJ
Jersey Shore and South Jersey Real Estate

George,

Very realistic assessment of what we are facing as a nation. It's certainly not going to be pretty over the next 20 years. Our government once again has it's head in the sand and chooses to ignore what we have to address.

May 29, 2014 11:26 PM #27
Rainer
51,916
John Jonas
ReplaceMyself - Virtual Assistants - Highland, UT
John Jonas

It is a sad thing. When you say retirement, the first thing that should come into our minds is being relaxed/stress free. This is really a sad reality.

May 29, 2014 11:59 PM #28
Rainer
24,233
James Randall
Palm Bay, FL

Very sad but it was preventable for many of these folk. Nine years ago we took the opportunity given by the market and took out a line of credit on our paid for home in Miami. With that money we purchased another home free and clear 200 miles north and then sold the Miami property and closed within two months. We naively thought that we could restart our real estate business in another location but it didn't happen and my Social Security check was not paying the bills. I took a part time position and my wife went back in nursing.

It was not easy but we had planned the move carefully. Purchased an investment property and had it rented. Today we are both retired and debt free. I thought on the last two Miami sales, "How can these people buy this property?" I knew we couldn't. In fact, the last sale was our own house and I knew that we could not have purchased it even with our then decent income from real estate sales.

We all have to learn to manage our resources and plan for the future and hedge our bets so that if plan A fails we have plans B, C, D or whatever. I have often tried to explain some of these ideas to people but very few have taken them to heart.

May 30, 2014 01:19 AM #29
Rainer
254,816
Geoff ONeill
John L. Scott Medford - Medford, OR

Unfortunately, this is going to increase as schooling costs continue to increase, and these parents help their children with those debts.

May 30, 2014 02:28 AM #30
Rainmaker
359,853
Bill Dean CDPE 314 575 6924
Worth Clark Realty St. Louis, Mo. - Fenton, MO
William Dean - Broker, Salesperson

Far too many people , including seniors, have had to refi in the last several years which would have been fine to get a lower rate.  But so many took out loans using up all all most of their equity.   I recently had one senior tell me, "hey they gave me a 30 year loan and it will outlive me!"  Many have pulled out this extra cash to help their grown children keep their homes.

May 30, 2014 02:31 AM #31
Ambassador
523,987
Jason Sardi
Auto & Home & Life Insurance throughout North Carolina - Charlotte, NC
Your Agent for Life

It may not help the current issue but I truly hope they implement courses in high school educating our youth about financial matters (credit, interest, retirement, saving, etc).  They didn't teach those "real world" things when I was in school.

The impacts of The Great Recession will continually be felt for years to come, I'm afraid.

May 30, 2014 03:32 AM #32
Rainmaker
2,350,968
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale - Probate Broker

George, I think it is a shame that so many seniors are not entering their golden years as they had expected, planned or hoped for. Add to that, the rising cost of health care which for many of us is not the second largest monthly payment. 

May 30, 2014 04:23 AM #33
Rainer
2,954
Aceltis Financial Group

What a great correlation between college grads starting off their adult life with a great amount of debt and seniors entering retirement with the same.

May 30, 2014 07:47 AM #34
Rainmaker
402,692
Rob Spinosa
RPM Mortgage, Marin County, CA - Mill Valley, CA
Executive Loan Advisor, Marin Mortgage Pro

Age is not a component of ability to repay, but let's face it, it is a serious consideration and you are correct to highlight it.

May 30, 2014 09:52 AM #35
Rainmaker
2,203,730
Lisa Von Domek
Lisa Von Domek & Associates LLC Team - Dallas, TX
....Experience Isn't Expensive.... It's Priceless!

Hello George,

We are in a massive debt crisis - the Government has over spent and the public is doing the same.

May 30, 2014 10:44 AM #36
Ambassador
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Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

George what a mess.  People at retirement lost their savings in the stock market, forced retirement displaced other and so on....sad situation.

May 30, 2014 04:56 PM #37
Ambassador
1,777,301
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living

George, ma y of these people may have taken out their "nest egg" early to pay off other ob,ignitions or help their kids.  Now they are left with little of their own. 

May 30, 2014 05:52 PM #38
Rainmaker
3,557,183
Gita Bantwal
RE/MAX Centre Realtors - Warwick, PA
REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel

I am sorry to read this news. I always thought seniors would sell their home with enough equity and downsize and save some money.

May 30, 2014 08:26 PM #39
Rainmaker
1,642,478
Ginny Gorman
RI Real Estate Services ~ 401-529-7849~ RI Waterfront Real Estate - North Kingstown, RI
Homes for Sale in North Kingstown RI and beyond

George, this is alarming for sure...I can tell you I have not experienced seeing this much...a few but a smaller percentage I am exposed to...but think of all those seniors in harms way right now and how unfortunate that is.

May 30, 2014 08:53 PM #40
Rainmaker
2,062,596
Joe Petrowsky
Mortgage Consultant, Right Trac Financial Group, Inc. NMLS # 2709 - Manchester, CT
Your Mortgage Consultant for Life

Good morning George. This is a growing problem in our country, there are so many reasons, but not a lot of solutions. Really important topic for your post.

Make it a great weekend!

May 30, 2014 09:20 PM #41
Rainmaker
378,350
Bruce Kunz
C21 Solid Gold Realty, Brick, NJ, 732-920-2100 - Howell, NJ
REALTOR®, Brick & Howell NJ Homes for Sale

Hi George. Being near retirement and having large debt certainly is a scary place. Sadly many involved actually tried to plan but circumstances outside their control messed them up. Thanks for highlighting the problem.
Bruce

 

May 31, 2014 01:32 AM #42
Rainer
215,754
Kevin A. Guttman Author, Reverse Mortgages
Fairway Independent Mortgage Corporation. NMLS#384936 - Colorado Springs, CO
877-251-9709

George, this is also going to impact people's ability to get a reverse mortgage.

Jun 05, 2014 07:38 AM #43
Rainmaker
1,067,630
Jeff Jensen
The Federal Savings Bank/Lending in 50 states - Greenwich, CT

Gee that is a pretty depressing set of statistics.

Jun 05, 2014 08:35 AM #44
Rainmaker
152,714
Mark Neighbor
A O Home Solutions - Sell House Georgia - Buy House Georgia - McDonough, GA
Sell House Fast In Georgia

Interesting info. Sometimes seniors down size and pay off all their debt.

Jun 05, 2014 12:06 PM #45
Rainmaker
908,388
Pamela Seley
West Coast Realty Division - Murrieta, CA
Residential Real Estate Agent serving SW RivCo CA

It's sad to see those close to retirement in so much debt. The 30-year mortgage was created to be paid off in time to retire. Unfortunately, that plan hasn't worked out for many.

Sep 06, 2014 01:55 PM #46
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