Can the Elderly survive the Foreclosure crisis?

WASHINGTON—More
than 1.5 million older Americans already have lost their homes, with
millions more at risk as the national housing crisis takes its toll on
those who are among the worst positioned to weather the storm, a new
AARP report says.

Older African Americans and Hispanics are the hardest hit.

"The
Great Recession has been brutal for many older Americans," said Debra
Whitman, AARP's policy chief. "This shows that home ownership doesn't
guarantee financial security later in life."

Even
working two jobs hasn't been enough to allow Jewel Lewis-Hall, 57, to
make her monthly mortgage payments on time. Her husband has made little
money since being laid off from his job at a farmer's market, and
Lewis-Hall said her salary as a school cook falls short of what she
needs to make the payments on her home in Washington.

Lewis-Hall
and her husband have been making their payments late for about a year,
but panic didn't set in until recently, when the word "foreclosure"
showed up in a letter from the bank.

"You're
used to living a certain way, but one thing leads to another,"
Lewis-Hall said. "It's not like I have a new car or anything. I'm
driving one from 1991."

According to AARP:

--About 600,000 people who are 50 years or older are in foreclosure.

--About 625,000 in the same age group are at least three months behind on their mortgages.

--About
3.5 million -- 16 percent of older homeowners -- are underwater,
meaning their home values have gone down and they now owe more than
their homes are worth.

AARP
said that over the past five years, the proportion of loans held by
older Americans that are seriously delinquent jumped by more than 450
percent.

Homeowners who are
younger than 50 have a higher rate of serious delinquency than their
older counterparts. But the rate is increasing at a faster pace for
older Americans than for younger ones, according to AARP's analysis of
more than 17 million mortgages.

Americans
who are 50 or older are hard-pressed to recover from the collapse of
the housing market that started in 2006 and was compounded by the
recession that started in 2007. Eight in 10 of them own homes, but many
live on fixed incomes, have little savings or have already burned
through much of their retirement savings. They also have fewer working
years left to build back what they may have lost.

And those who are forced to re-enter the workforce often find they can't command the same salary that they did in the past.

Older
minorities are facing foreclosure rates that are almost double those
faced by white borrowers of the same age, mirroring a nationwide trend
seen in other age groups as well. Among older African Americans, 3.5
percent were in foreclosure at the end of 2011, and the rate was 3.9
percent for Hispanics. Just 1.9 percent of white homeowners were in
foreclosure.

The issue has
become so dire in Rep. Elijah Cummings' Maryland district that he has
assigned one of his 20 staffers to work full time to help struggling
homeowners, and his office holds regular foreclosure prevention
workshops. He said the federal government can do its part by promoting
principal reduction and loan modification programs.

"These
are people who in many instances have never missed a payment in 20
years," Cummings, a Democrat, said in an interview. "You see grown men
crying because of the potential loss of a home."

Among
older homeowners, those who are 75 or older are in the worst shape when
it comes to foreclosures, the report showed. In 2007, one out of every
300 homeowners 75 or older was in foreclosure. Five years later, about
one in 30 face that same fate.

Many
of those oldest homeowners may have lost income they were counting on,
such as the retirement benefits of a deceased spouse. In the meantime,
their mortgage payments have stayed the same.

The
situation is likely to get worse before it gets better, AARP officials
predicted, because of a housing market that is recovering at a snail's
pace.

"This crisis is far from over," Whitman said. "We need to think about more creative solutions now that we have this data."