Older Americans not immune to housing crisis

Despite the perception that older Americans are more financially settled than most, not all own their homes free and clear.

About 3.5 million Americans age 50 and older owe more on their mortgage than their home is worth, and at least 625,000 are 90 days delinquent on their payments, according to a research report from the American Association of Retired People.

The study is based on a nationwide analysis of loan levels from 2007 to 2011, including borrower age, loan type and borrower demographics.

Among the key findings of the 36-page report:

■ The number of loans that are seriously delinquent for people 50 and older increased from 1.1 percent in 2007 to 6 percent in 2011.

■ Delinquency rates for borrowers in the 50-64 age group and 75-plus age group are higher than those of the 65-74 age group.

■ The foreclosure rate on prime loans of the 50-plus population rose to 2.3 percent in 2011, from 0.1 percent in 2007.

Ways listed in the report to help older homeowners who are in trouble include principal reduction, mediation, access to legal counseling and short-term financial assistance.

The government's Home Affordable Refinance Program 2.0 gives qualified homeowners the opportunity to refinance regardless of loan-to-value ratio, said Michele Johnson, president and chief executive officer of Financial Guidance Center in Las Vegas.

But it's not going to help the 60 percent of Las Vegas homeowners with negative equity, she said.

"Unfortunately, there's just not enough money to make people whole, and there was never a guarantee when you purchased your home that it was going to appreciate in value," Johnson said. "I think we as homeowners need to look at it differently. If your home is affordable, just because it lost value doesn't mean it's not the dream home it was five years ago."

AARP Nevada spokeswoman Deborah Jaquith said the purpose of the study is simply to show that this is a universal problem and that many older adults are hit harder than younger adults.

"They're a lot closer to retirement and not able to work as long," she said. "Younger people still have time to recover. When you're 75 or 85 ... the way the economy turned on a dime, we as a society have a responsibility to help those folks."

Contact reporter Hubble Smith at hsmith@reviewjournal.com or 702-383-0491.