Millions Over 50 Now Hit with Foreclosure

Jul 24, 2012

ALL THIS IS DISCUSSED IN MY SEMINAR IN CHANDLER THIS THURSDAY 7/26 AT 9:00 AM.

Editor’s Note: The CNN article is one of many that broke this weekend about senior citizens faced with foreclosure, moving in with children, having their life savings wiped out by “modification” promises and other scams both by the banks and servicers and by private scam artists.

So many people who thought they had dodged the bullet are now finding out that they are stuck in quicksand. But it is an illusion created by Wall Street and if you simply DENY AND DISCOVER, (the subtitle of my workshop tour starting Thursday), you will find out why they fold every time when forced to open up their books and records. The reason is very simple. There are no books and records, there were no transactions and all the papers are fictional including the note and mortgage signed at closing. Practically nobody did a transaction in which money exchanged hands between the homeowner and the party shown on the note as the lender and the party shown on the mortgage as the secured lender.

And the reason this is important is that if investors and borrowers got their act together the foreclosure problem would vanish. It is clearly in the interest of the investors to modify these mortgages to fit with reality rather than to lose even more of their investment in a foreclosure.

The banks and servicers are luring and duping the public and the press into believing that there are serious modification programs underway. It isn’t true. The banks don’t want modifications, they want foreclosures because they don’t give a damn about the investor who bought bogus mortgage bonds and they don’t give a damn about the homeowners. What they care about is being too remote to jail (as opposed to the popular expression of Too Big To Fail, which is also a lie, along with Libor which is now known as Lie-bore).

Once they get a foreclosure they think they have a get out of jail free card. After all the state authorities put their stamp of approval on the foreclosure, Tittle MUST have been as represented in order for the experts in each state to have done that. But there are no experts in the states on what Wall Street and that is why pensions are getting slashed, cities are going bankrupt, homeowners are going bankrupt and why millions more people weary of paying under ht yoke of a debt that can never be covered by the asset they were told was worth so much more, are walking away in greater and greater numbers.

Millions of older Americans at risk of foreclosure
By Les Christie @CNNMoney July 20, 2012: 2:15 PM ET
NEW YORK (CNNMoney) — A growing number of older Americans are falling into serious mortgage debt, with more than three million borrowers over the age of 50 at risk of losing their homes to foreclosure, according to a recent report from the AARP.
Since the housing crisis started, more than 1.5 million homeowners age 50 or older have already lost their homes to foreclosure, pushing the foreclosure rate among this group to 2.9% in 2011 from 0.3% in 2007, according to the AARP’s Public Policy Institute. And another 3.5 million have found themselves underwater, owing more on their mortgage than their homes are worth.
Long believed to be cushioned from the blow of the housing crisis — because they owned their homes outright or hold large equity stakes that they could draw from in case of financial hardship — older Americans are “carrying more mortgage debt than ever before.”
“As the mortgage crisis continues, millions of older Americans are struggling to maintain their financial security,” the report said.
Underlying the problem is that more older Americans have mortgages than they did 20 years ago — and the amount of debt they owe is much greater.
The percentage of families with mortgages held by someone age 75 or older, for example, jumped to 24.2% in 2010, up from 6.3% in 1989, according to the Federal Reserve. Over the same time period, the amount of mortgage debt this group of borrowers owed jumped to a median of $52,000, up from $11,800.
Many of these older borrowers were saddled with toxic subprime loans issued during the latter years of the housing bubble, said David Jones, president of the non-profit Association of Independent Consumer Credit Counseling Agencies.
Older homeowners were often convinced to refinance their mortgages for more than they owed and use the extra cash to repair their homes or pay bills.
Related: ‘Retiring in 7 years. Am I prepared?’
These subprime loans were often enticing because the interest rates were low for the first few years. But the rates jumped after that and borrowers soon found themselves saddled with unaffordable monthly payments.
Compounding the problem was the sharp decline in home values. Nationwide,home prices have fallen about 34% since the mortgage meltdown began in mid-2006, according to the latest S&P/Case-Shiller home price index. But they were specially hard hit in states that attract retirees, like Florida, Arizona, Nevada and California, pushing many of the borrowers that live there underwater on their loans and making them more vulnerable to foreclosure.
Less time to regain ground: When older borrowers lose their homes, there’s less of a chance that they will recover financially.
“Foreclosures unduly weigh on older borrowers because so many are on fixed incomes,” said Kathleen Day, spokeswoman for the Center for Responsible Lending. “They have little time to rebuild their finances.”
Older workers who lose their jobs, for example, have a harder time getting hired than younger workers. And those who do find a job often end up taking a pay cut, making it more difficult for them to afford their mortgage payments, the report said.
And while the economy is slowly recovering and home prices are starting to stabilize, it may be too little too late for many older homeowners — especially the 3.5 million who are currently underwater on their mortgages.
Many of these borrowers don’t have enough time left to rebuild their finances before declining health or disability forces
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AARP: Millions of older Americans at risk of foreclosure – Jul. … http://money.cnn.com/2012/07/20/real_estate/foreclosure-aarp/
them into retirement and starts eating away at their savings.
Related: Where home prices are rising the fastest
The AARP offered up a few recommendations for easing the mortgage problems of older homeowners, including the use of principal reduction, or forgiving some of the mortgage debt that is owed on the home. The group cited growing evidence that default rates decline when mortgage balances are lowered to better reflect current market value of homes.
AARP also said more states should introduce mandatory foreclosure prevention programs. Under these programs, servicers cannot pursue foreclosures until a review and mediation is conducted.
It also recommended stepped up enforcement against foreclosure prevention scams that offer to save people’s homes, collect a substantial up-front fee and then do little or nothing.
A recent report by the Lawyers’ Committee for Civil Rights revealed that nearly half of these scams roped in older Americans, who lost a collective $16 million to these types of fraud.