The recession left few people unscathed, but some groups felt the pain more than others, the study found.
Older borrowers with incomes from $50,000 to $124,999 accounted for 53 percent of foreclosures in 2011; those earning below $50,000 accounted for 32 percent.
Among older mortgage holders, minorities were hit the hardest. Foreclosure rates on prime mortgage loans with fixed rates reached 3.9 percent for Hispanics in 2011 and 3.5 percent for African Americans, about double the rate of 1.9 percent for white borrowers.
Risky subprime loans, which helped to ignite the foreclosure crisis with their high interest rates and treacherous terms that were often peddled to unsuspecting borrowers, predictably fueled more foreclosures than prime mortgages.
African Americans had the highest subprime foreclosure rate among older borrowers in 2007. But in 2008, older Hispanics took over that status and suffered the highest foreclosure rate through 2011.
Other findings involving subprime loans given to borrowers 50-plus:
- Hispanics held the largest percentage of delinquent subprime loans (25.9 percent) in 2011, followed by Asians (25.0 percent), African Americans (24.9 percent) and whites (24.4 percent).
- The overall foreclosure rate on subprimes rose from 2.3 percent in 2007 to 12.9 percent in 2011.
- Rates of serious delinquency hit 25 percent in 2011, five times higher than the rates for prime loans.
The study recommends steps to improve housing policy, including:
- Requiring all states to implement foreclosure mediation programs to help more homeowners stay in their homes;
- Returning vacant bank-owned properties to their proper use as homes through funding for community banks and assistance to local and state programs;
- Developing rent-to-own programs to help people buy bank-owned or vacant homes;
- Setting loan servicing standards for all servicers, not only the five big banks that in February signed a settlement with state attorney generals to rein in abuses and misconduct that have resulted in improper foreclosures;
- Expanding access to housing counseling programs.
Carole Fleck is a senior editor at AARP Media.