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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Generation Homeless

Roughly one-third of our population, 70 million people, are directly effected by the ongoing housing crisis, whether they are current on their note, or not. Why? Because their mortgages were funneled into a system, created by the banks, called Mortgage Electronic Registration Systems Inc (MERS). In fact, of the 70 million people, 80% are not in default, yet, due to MERS, if they were to investigate their chain of title, the "owners" would more than likely find their title, clouded. In other words, uncertain of who really owns the debt.

What is this elaborate shell game that is MERS? Well, it was set up in the early 1990s to circumvent the land records in order to securitize mortgage loans on Wall Street; therefore, speeding up the process, without paying the recording fee. You see, MERS splits the deed from the note, takes the note to Wall Street, pledging it multiple times over numerous and various trusts without notifying the homeowner. However, due to sloppy procedure, most of the notes never even made the trust pool, leaving homeowners, and everyone else involved uncertain of who owns the note.

Moreover, as home values continue to decline, more home-owners are steadily pushed underwater. The U.S. Census Bureau reports that 11% of houses are now empty, that’s 18.4 million! And projections show millions more in the foreclosure pipeline. This avalanche of  defaulted properties will take decades to unload, driving down the value of all homes.  Not to mention, it keeps home-builders from starting new projects, and encourages qualified buyers to wait until values hit bottom. 

Meanwhile, outstanding education debt surpassed credit-card debt last year for the first time, according to Mark Kantrowitz, publisher of FinAid.org, and Bloomberg reports that student loan debt is near $1 trillion.  This - the exponential student debt curve –that began with Ronald Reagan is now heading vertically - combined with much tighter credit standards is sure to keep potential young home-buyers out of the housing market, perhaps, forever.

Despite home prices  in free fall while, rents are skyrocketing; monthly rents surpassed a monthly mortgage payment a few years back.

“Potential first-time homebuyers have been disproportionately affected by the very tight conditions in mortgage markets. First-time homebuyers are typically an important source of incremental housing demand, so their smaller presence in the market affects house prices and construction quite broadly.” -- Federal Reserve Chairman Ben S. Bernanke said at a homebuilders conference last week.

Has a college education become a curse?  A method to enslave?  Because the government banking student loan cartel has ensured - especially with no jobs available - that this generation of college graduates will never "own" a home. 

“Despotic government supports itself by abject civilization, in which debasement of the human mind, and wretchedness in the mass of the people, are the chief criterions. Such governments consider man merely as an animal; that the exercise of intellectual faculty is not his privilege; that he has nothing to do with the laws but to obey them; and they politically depend more upon breaking the spirit of the people by poverty, than they fear enraging it by desperation.” Thomas Paine, Agrarian Justice

Related Links:

Marine makes last stand in foreclosed home

Stop Foreclosure Fraud

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Notary who blew whistle on foreclosure fraud found dead

Whistleblower, Tracy Lawrence, was, indeed, a threat to some very wealthy and influential people. Why? After she already pleaded guilty?

Well, Nevada Attorney General, Catherine Cortez Masto, handed down 606 counts of felony or gross misdemeanor indictments on robo-signing against two employees of  bank subcontractor Lender Processing Services. In other words, it appears Masto's strategy is to build a case from the bottom up, by flipping people all the way up the chain. If Tracy Lawrence remained alive, she could've provided corroborating testimony to future cases that could prove a conspiracy, which could trigger the Rico laws. So, yeah, the bankster/ corporate thugs wouldn't like that very much.

The notary who signed tens of thousands of false documents in a massive case was found dead in her home on Monday.

The notary, 43-year-old Tracy Lawrence, was supposed to be in court at 8:30 Monday morning for her sentencing hearing. When her attorney did not hear from her for more than an hour, Sr. Deputy Attorney General Robert Giunta asked for a bench warrant to be issued for Lawrence. The judge denied the request.

Police were sent to Lawrence's house to check on her after her lawyer expressed concern for her client's well-being. They found her body inside her home.

Metro Homicide Detectives are working currently the case. It is unclear if her death was due to natural causes, or if it was a suicide.

Detectives said this afternoon that they have ruled out homicide as a cause of death.

Last Monday, Lawrence pled guilty to only one criminal charge of notary fraud.

Lawrence came forward earlier this month and admitted that she had notarized around 25,000 fraudulent documents as part of a foreclosure fraud scheme.

Title officers Gary Trafford and Geraldine Sheppard of California are allegedly behind the fraud that involved forging signatures on tens of thousands of notices of default between 2005 and 2008. The two were indicted on more than 600 charges in a 439-page indictment filed on November 16.

The Nevada Attorney General is negotiating the terms of surrender for the pair. Both are expected to surrender sometime in December.

Links:

Nevada Files First Criminal Charges in Robo-Signing Case

The Robo-Signing Foreclosure Scandal Was Predicable and Is Not News

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The Pull Yourself Up by the Bootstraps Businessman is a Welfare Case at Best.

Over two years ago, in July, 2006, Nouriel Roubini predicted and explained why the U.S. would experience its worst housing recession in the last 50 years, why home prices would fall approximately 20%, and why it would all start with the “subprime” market. Mr. Roubini also predicted that this housing and mortgage collapse would lead to the collapse Fannie Mae and Freddie Mac.

Fast forward to September of 2008 and our government is taking control of Fannie Mae and Freddie Mac in what can only be called the "nationalization" (not fully nationalized as "companies’ common and preferred shares will remain outstanding, but will be junior to new preferred shares that the government will receive.") of the mortgage industry as these two giants guarantee three-quarters of all new US mortgages.

On July 11, 2008 Nouriel Roubini's article "Insolvency of the Fannie and Freddie Predicted Here Two Years Ago. What Happens Next? Or How to Avoid the “Mother of All Bailouts” said,

"So let’s call a spade a bloody shovel: nationalise Freddie Mac and Fannie May. They should never have been privatised in the first place. Cost the exercise. Increase taxes or cut other public spending to finance the exercise. But stop pretending. Stop lying about the financial viability of institutions designed to hand out subsidies to favoured constituencies. These GSEs were designed to make losses. They are expected to make losses. If they don’t make losses they are not serving their political purpose." -- Nouriel Roubini

Once again, we, the taxpayers will pay the price for the lack of regulation in our financial markets, a.k.a., legalized corruption, that we were brainwashed to believe is/was absolutely essential for our economy to thrive. Of course, the ones who defined and declared their version of laissez-faire capitalism or "free market" economics sacred, are the same ones who profited so egregiously. They will not pay the price...we, the taxpayers will pay, potentially, up to $200 billion.

As Nouriel Roubini said regarding Fannie Mae and Freddie Mac,

"...socialism for the rich, the well connected and Wall Street; it is the continuation of a corrupt system where profits are privatized and losses are socialized."

Affordable housing and health care are crucial to the existence of a civilized society. Privatizing profits and socializing losses does not work in the "human rights" realm. How can an industry maximize investment return to shareholders, which only serves to increase housing and healthcare costs for everyone, and at the same time see to it that everyone has access to those necessities?

The risk-taker...the pull-yourself-up-by-your-bootstraps (PYUBYB) businessman doesn't exist. At the same time the PYUBYB rants and raves about universal health care, welfare, and/or any social program designed to level the playing field a tad, PYUBYB relies on hard working Americans who can just about afford to put food on their table, can't afford to go to the doctor, can't afford medicine, as his safety net.

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All the Bank's Fault?

Recently, while visiting Madrid, as part of a European tour including Switzerland, Germany, Italy and Spain, Warren Buffet blamed the banks for the credit crisis.

"The banks exposed themselves too much, they took on too much risk .... It's their fault. There's no need to blame anyone else",

Warren Buffet went on to say he didn't think conditions would continue to worsen in the financial markets, only general conditions in the business world and that he had no idea when an upturn would occur.

"I don't think the situation will get worse in financial markets. General conditions in the business world will get worse, but it will only last a while",

Keeping in mind, Warren Buffet may know a little more than me when it comes to the world of finance, I respectfully disagree with him. Yes, the banks are at fault but they are not the only ones at fault...far from it.

There is plenty of blame to go around including we, the American people. We let things get out of hand perceiving reality through the prism of deliberate ignorance and greed allowing politicians to gloss over the harshness of what exists objectively and in fact.

As long as we're (my loved ones and I) doing OK, we blind ourselves to those Americans who having very little to begin with and who must adapt to getting by with less and less as we not only permit but champion legislation created, amended and destroyed over the last 30 years that we thought mistakingly would line our pockets. However, now that we may be facing the grim truth we only thought applied to others, we start to tune in and find out what's going on.

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The Forgotten Victims of the Sub-Prime Crisis

According to the National Coalition for the Homeless, more than two million foreclosures occurred in 2007 alone, that is a 75% increase from 2006 to 2007, 149% increase from 2005, and exceeds the projected number of foreclosures for both years, 2008 and 2009.
It is now estimated that in 2008-2009, "2,258,457 more homes will be lost to foreclosure in the United States".

These statistics and many other factors fully explained in the foreclosure report, provide the grounds for believing the existence of a strong link between the foreclosure crises and increasing homelessness in communities around our nation.

The media seems to strongly suggest that the foreclosed upon are as much to blame as the lenders and the industry at large. This is not true for a number of reasons. The first one is the deliberate, needless complexity built into disclosing the terms of the mortgage contract itself, a huge problem (financial contracts) through the financial industry as a whole. The second one is apartment foreclosures. Numerous renters are suffering and sometimes homeless due to the actions of people they knew nothing about and had no control.

"People don't think of low-income families in apartments being hurt by the mortgage crisis, but in many ways, they are the most vulnerable -- and the least to blame when they get tossed out." Rev. John Estrem, CEO of Catholic Charities

There is no doubt greed and dishonesty characterized a certain percentage of the people who agreed to the terms of these loans, however, a much bigger percentage ended up as victims of a systemic greed and dishonesty that gradually infiltrated the infrastructure that supports and protects our financial system from corruption.

Once again, those we profess to support and honor are once again the group of people who suffer the most from the injustices intentionally incorporated into our prevailing social order as the housing crisis is hitting veterans especially hard.

"A recent Pentagon study has shown, military personnel are particularly vulnerable to predatory lending, and the financial stresses for many military families has been well documented". - Ellen Harnick, Senior Policy Counsel, Center for Responsible Lending

The people who get paid to understand how the housing and financial markets work not only dropped the ball, they greased their hands with a pound of butter before the game started. The integrity of the lending and investment banking profession has reached an all time low.

These mortgage foreclosures are hitting our communities already facing an uphill battle due cutbacks in federal programs designed to assist American citizens bear the weight of hard times in order to prevent them from sinking to a point of no return.

Meanwhile, our government rushes to the aid of the corruptors and corrupt, - Bear Stearns and all the legislation passed to facilitate the greedy agendas of faceless corporations and heartless hedge fund managers - the perpetrators of this financial fiasco, to prevent our economy from crashing. We, the people must demand, at the very least, the same concern for the innocent citizens paying the steepest price and safeguards put in place preventing the greedy, unethical behavior of a few from effecting the security and livelihood of the many.

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Operation Hope

Crown Prince Haakan and John Bryant Hope
John Hope Bryant is the founder of Operation Hope, a non-profit center, partnered with carefully chosen banks, that provide services to those who have no hope of purchasing a home, due to bad credit, financial illiteracy and lack of assets, and assists them through the process of saving for home ownership, to the point where they are empowered to buy and own their own home.

Operation Hope works hand in hand with each person. They begin the process by pulling a credit report on him or her, map out a strategy to get the person’s credit score up, open a savings account and will match every dollar that person saves up to $7,500. Throughout this whole process Operation Hope emphasizes how important it is to make each person financially literate not only for the individual but for the health of our economy.

John Hope Bryant asserts that healthy, responsible sub prime lending has lifted more poor people into home ownership than anything in the last 50 years. Operation Hope assumes everyone has common sense, a sense of dignity and a desire to do better but have not had access or the opportunity to learn the very basics of finance.


"It is arrogant that some people should not or don’t deserve or shouldn’t be a homeowner. If you’re renting and you can afford a payment equal to what a mortgage payment would be…why wouldn’t we want that person to be a stakeholder? They will be net contributor to the American Dream and they’ll feel better about themselves."

Mr. Bryant points out that the current sub prime lending crisis is mostly a result of independent mortgage brokers who have been misrepresenting under qualified financially illiterate people from the poor to people of middle-class. These mortgage brokers have no ongoing relationship with these people. Banks, on the other hand have a long term relationship with their borrowers and Operation Hope will only partner with FDIC publicly traded banks and so far, none of Operation Hope’s loans have gone bad.

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