Bank Forecloses on Elderly Woman Over $49 She Already Paid

An elderly Texas woman, Aron Ezilla Ridge, 75, is being thrown out the home she's lived in for 47 years--the home that she raised six children--over $49 in property taxes, taxes that she paid early. Ms. Ridge is confined to a wheelchair, and is for the most part, housebound as she is partly blind, has diabetes, congestive heart failure and had surgery for colon cancer several years ago.

Ridge paid off the mortgage for her 900-square-foot home about 20 years ago. In 2007, her home needed major roof, kitchen and bathroom repairs, so she signed a reverse mortgage with James B. Nutter & Co. which provided her with $39,000 for the repairs. In 2011, she received a property tax bill for $20.31, which she said she paid in full and on time. In April 2012, the assessor's office informed her that her home was valued at $60,743 and that her taxes were estimated at $46.87. Ridge says she did not receive a tax bill, but later received a receipt stating that $49 in taxes were paid in late 2012.

Here's the thing. Ridge says she was told by the Travis County Tax Assessor's office in 2000 that she did not need to pay property taxes because the value of her home was below homestead and senior exemption caps, so she assumed that the receipt meant she was exempt from property taxes.

Fast forward to January 2013, and Nutter's attorneys told Ridge her reverse mortgage had been accelerated (see acceleration clause), and that she had to pay off the entire loan "or the lender would exercise its right to enforce the lien on her home. Ms. Ridge does not remember receiving this letter," the complaint states.

Her home was foreclosed on on Jan. 30, and she received notice on Feb. 6.

According to the complaint:

"The application [for foreclosure] stated that Ms. Ridge was in default 'for failure to pay property taxes.' The only property to which the application could possibly refer were the taxes for 2012 - which were not due until January 31, 2013. Yet defendant intended to enforce its right to foreclose on Ms. Ridge's home because she had not paid $49.00, which at the time the application was filed, was not due yet."

After Ridge was served, she tried to pay the taxes again at the assessor's office. They told her they could not accept payment because the taxes had been paid by the defendant before they were due. In other words, the taxes were already paid!

Ridge lives on $641 in monthly disability payments, therefore, is unable to pay the accelerated reverse mortgage. She has no other source of income. Meanwhile, Nutter is demanding more than $66,700, plus attorneys' fees - double the amount she was paid in 2007 and more than the appraised value of her home in 2012.

Links:

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Elderly African Americans/Hispanics Hit Hardest by Foreclosure Crisis.

Home "ownership" does not equal security later in life anymore, as older minorities - especially for those over 80-years old - 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.

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.

The mortgage crisis has slammed every age group—especially the oldest Americans 75-plus—and has hit Latino and African American seniors and their families the hardest, according to a study being released today by AARP.

About 1.5 million people ages 50 or older lost their homes to foreclosure from 2007 to 2011, and another 3.5 million aging boomers and seniors in the United States “are at risk of losing their homes,” says the report, “Nightmare on Main Street: Older Americans an the Mortgage Market Crisis.”

“Despite the perception that older Americans are more housing secure than younger people, millions of older Americans are carrying more mortgage debt than ever before,” the report says.

Trouble Rising Fastest for Seniors

For instance, during the five years covered by the study, seriously delinquent mortgage loans—those in the verge of foreclosure -- for people age 50 or older rose faster than delinquencies for people younger than 50. These loan payments, 90 days or more late, swelled for the 50-plus group by 456 percent from 2007-2011, compared with the also disturbing jump by 361 percent for those under 50.

AARP’s analysis included 17.4 million home loans tracked by CoreLogic, a leading data base on home equity. The report reveals that at the end of 2011, more than 600,000 home loans by people 50-plus were in foreclosure. Additionally, 625,000 older homeowners were 90 or more days delinquent—a least three mortgage payments behind, a common trigger for foreclosures.

Furthermore, the research found, by last December 3.5 million loans by older people were “underwater.” That is, they owed more than the value of their property.

The AARP analysis found that middle-income mortgage holders “have borne the brunt of the foreclosure crisis.” Although those with incomes at less than $50,000 held one-quarter of the home loans in the study — but accounted for one-third of the foreclosures.

Most Age 75-Plus Have No Savings Left

“The biggest problem we found is for the oldest of the old, those age 75 or more,” stated Debra Whitman, AARP executive vice president for policy, in a call-in press briefing on Wednesday.

She noted that two-thirds of those ages 75 or more “have no retirement savings left to make up these differences.” They can’t refinance or sell their homes, even to have enough to move into assisted living or a nursing home when they become frail.

“Older homeowners often rely on their home equity to finance their needs in retirement – things like health care, home maintenance and other unexpected needs. The fact that so many older Americans have no equity at all is troubling,” Whitman said.

Although four out of five Americans older Americans own their homes, many tapped their home equity before the recession struck for such customary needs as home repairs or rising health care costs. Once the housing bubble burst, millions of seniors depleted their retirement savings and other accounts hoping to save their home.

Even though retirement income is fixed or declining for many, says the study, their costs have escalated.

The report reveals that from 2007-2010 “average expenditures for mortgage interest and charges increased 16.3 percent; average property tax expenditures increased 4.9 percent; average expenditures for utilities increased 5.2 percent; and average health care expenditures increased 5.7 percent.”

Ironically, another factor for the added financial jeopardy confronting many seniors is longevity. “We’re seeing more and more people today over 100 and over 90,” Whitman observed. The combination of more people than ever living beyond age 75, and the dramatic economic downturn means fewer elders have even the modest resources they need to keep a roof over their heads.

Older people face more difficult challenges recovering from a foreclosure as a result of having fewer working years remaining to rebuild their financial security, Whitman said. In addition, seniors who have lost their jobs face longer periods of unemployment. When they do find a job, it is often at a lower pay level than their previous position, and offers little or no benefits.

Foreclosures Double for Older Blacks, Latinos

The report, conducted by Lori A. Trawinski of AARP’s Public Policy Institute, shows that Hispanic and black elders suffered “double the foreclosure rate” of older white borrowers. While Latinos and African Americans 50-plus with prime loans saw foreclosure rates of 3.9 percent and 3.5 percent, the level for whites was 1.9 percent in the five-year height of the crisis.

For the more troubling subprime loans, foreclosure levels were sharply higher for everyone 50-plus, the study shows, but particularly for ethnic elders. Overall, subprime mortgages accounted for 6.8 percent of home loans for 50-plus whites in 2011, who tended to have more of the standard prime loans. Blacks, though, had more than three times that percentage of subprime loans, 21.8 percent, and it was 12.9 percent for 50-plus Latino borrowers.

AARP’s report adds, “A recent settlement between the U.S. Department of Justice and Bank of America supports the allegation that lenders unfairly targeted African American and Hispanic borrowers for subprime loans.”

Stating that “the housing crisis is far from over,” the report calls for a range of policy solutions. It urges more help be provided to seniors with loan modification and reduction of principals, especially where housing prices have plunged well below the original principal used as the basis for the mortgage. The report also recommends increased mediation programs; more access to housing counseling and legal assistance programs; and development of short-term financial assistance programs.

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More Baby Boomer Facing Old Age Alone

Startling new statistics from Bowling Green State University's National Center for Family and Marriage Research paint a bleak future for the largest generation in history, the baby boomers, as they cross into old age

BOWLING GREEN, O.—Startling new statistics from Bowling Green State University's National Center for Family and Marriage Research (NCFMR) paint a bleak future for the largest generation in history, the baby boomers, as they cross into old age.

Using data from the 1980, 1990 and 2000 censuses and the 2009 round of the American Community Survey, Dr. I-Fen Lin, an associate professor of sociology, and Dr. Susan Brown, a professor of sociology and co-director of the NCFMR, found one-third of adults aged 45-63 are unmarried. This represents a more than 50 percent increase since 1980, when just 20 percent of middle-aged Americans were unmarried.

Most single boomers are divorced or never married. In fact, one in three single baby boomers has never been married. Just 10 percent of unmarried boomers are widowed.

"The shift in marital composition of the middle-aged suggests that researchers and policymakers can no longer focus on widowhood in later life and should pay attention to the vulnerabilities of the never-married and divorced as well," said Lin.

According to Brown, one in five single baby boomers is living in poverty compared to one in 20 for their married counterparts. Single boomers are twice as likely to be disabled, but they are also less likely to have health insurance.

The previous marital status of unmarried baby boomers also has significant repercussions. In general, divorced boomers have more economic resources and better health than their widowed or never married counterparts.

Of particular concern is the large share of unmarried boomers who have never been married. According to the researchers, the probability of marrying for the first time during middle age is extremely low, meaning that nearly all of the never married boomers will remain unmarried.

"The economic and health vulnerabilities of single boomers are concerning because boomers are now moving into old age when failing health becomes even more common and severe," said Brown.

"In the past, family members, particularly spouses, have provided care to infirm older adults. But a growing share of older adults aren't going to have a spouse available to rely on for support. Our figures indicate one in three boomers won't have a spouse who can care for them. And, unmarrieds are less likely to have children who might provide care. These shifting family patterns portend new strains on existing institutional supports for the elderly. As more singles enter older adulthood, we as a society may have to reconsider how we care for frail elders. The family may no longer be a viable option for an increasing segment of older adults."

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Couple May Lose Home Over $1.63 Tax Bill

In 2000, a Louisiana couple, Kermit and Dolores Atwood, learned their house, which they had owned mortgage-free since 1968 had been sold three years earlier -- about a week after the three-year period in which delinquent taxpayers can reclaim their property had ended -- all because a $1.63 property tax bill was sent to a wrong address and then returned undelivered to the St. Tammany Parish sheriff's office.

The State Tax Commission nullified the sale so the Atwoods thought everything was alright until they tried to sell the home in 2002 and found that the people who bought the house were suing to get them out of their house, meaning they don't have a clear title.

When Katrina hit, trees fell on the house, but the Atwoods didn't have insurance, and because they didn't have clear title, they didn't qualify for federal help.

In May 2006, the State District Judge ruled that the property title belongs to the Atwoods. The buyer appealed and was turned down and now the buyer plans to take his case to the Louisiana Supreme Court.

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