Alert
Close

Last chance – give now. Before 2014 ends, help struggling seniors. Donate

Highlights

Open

You and Your Town Contest-You could win an AARP RealPad

Contests and
Sweeps

$10,000 Winter Escapes Sweepstakes

Beat the cold and cozy up to a chance of winning $10,000! See official rules.

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

AARP Books

Visit the Money Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular
articles

Viewed

Delinquent Homeowners

Many Americans have stopped paying their mortgages and remain in their homes

Not paying can give troubled borrowers a chance to get back on solid financial ground. "I say take advantage and save $20,000, $30,000, $40,000 or more in order to go live somewhere else, or buy a house outright," says Stopa, whose law offices are in Tampa. He says that despite homeowners' clamoring for help, many banks never provided any. Now, he says, "homeowners are doing what is in their own best interest."

Bank-imposed fees, interest and fines covering the time the home goes unpaid continue to drive up the mortgage principal.

Bankers say the cost of living for free will ultimately result in higher interest rates shouldered by people who had nothing to do with these delinquencies. "It will be factored into all mortgages so future borrowers will be paying more," says Bob Davis, executive vice president at the American Bankers Association.

Delinquent borrowers say they have few options. They cite job loss, collapsed real estate values and subprime mortgages that reset to unaffordable heights.

Martinez, 58, says he would happily trade places with a working, paying homeowner. "I don't like how I'm living. It's embarrassing to me," says Martinez, who lost his job six years ago and fell behind on his mortgage. The bank demanded a $7,000 payment. He offered $3,500; the bank wanted the entire amount.

"What was I supposed to do? If I could strike a deal with my lender, I would," says Martinez. "People who feel it's unfair, they're entitled to their opinion, but they should make sure they have the facts before they make a judgment."

Borrowers like Martinez face serious consequences that could last for years. Bank-imposed fees, interest and fines covering the time the home goes unpaid continue to drive up the mortgage principal. Moreover, once a foreclosure goes through, banks can file suit for the balance unless there's been a negotiated settlement.

Meanwhile, the borrower's credit score nosedives, making it difficult to get future financing for a home, car or any other big-ticket item.

Next: Foreclosure process takes much longer now. >>

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts

Processing

Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.

The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Life insurance: you are covered rain or shine

Exclusive annuities for members from AARP Lifetime Income Program from New York Life.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Homeowners Insurance
Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points

Advance your skills. Transform your career.

Explore your learning possibilities.