Mortgage Dreams & Disappointments
By: State: Oregon
Bob and Martha "Marty" Barney take care of the yard during what may be their last fall at their Milwaukie home before potential foreclosure. Oregon foreclosures have increased 160 percent since last year.
When Bob and Martha "Marty" Barney signed the mortgage on their four-bedroom Milwaukie house, they never dreamed that a mere 18 months later they would be struggling to prevent foreclosure. While the Barneys have yet to miss a mortgage payment, the "upside down mortgage" they inadvertently signed up for increases their payment each month. Despite their attempt to cover expenses by coming out of retirement, the Barneys can only afford the house for a few more months.
The Barney's situation is unfortunately more and more common across Oregon. Reports indicates that thousands of Oregonians are currently facing or already in various stages of foreclosure. According to RealtyTrac, the number of foreclosure filings on Oregon properties increased 21 percent from September to October of 2008. These 2,841 filings translate into a 159 percent increase from this same time last year. Nationwide, RealtyTrac reported that the number of foreclosures rose 5 percent, a 25 percent increase.
It's now widely recognized that primary factors in the nation's rising foreclosure filings can be attributed to shaky subprime and predatory mortgage lending practices and buyers investing over their heads. Rising national and state unemployment rates are also contributing to Oregonians' rising rate of foreclosure.
Effect of Mortgage Crisis on Older Americans
An analysis of data on the mortgage crisis by age from AARP's Public Policy Institute found that older Americans like the Barneys have been significantly impacted by the current mortgage crisis. More than 684,000 homeowners aged 50 and over were either delinquent in mortgage payments (30 to 180 days late) or actually in foreclosure at the end of last year, according to the research report.
Another major finding of the study was that older Americans are particularly vulnerable to fallout from subprime loans. "Older Americans with subprime first mortgage loans are nearly 17 times more likely to be in foreclosure than Americans of the same age with prime loans.” In addition, they are also "eight times more likely to be delinquent than Americans aged 50 and over with prime loans."
"These facts are quite alarming as it's extremely difficult, and in some cases impossible, for older Americans to recover their financial stability following a foreclosure," says AARP Oregon State Director Jerry Cohen.
A 2009 Legislative Action Priority
Enacting mortgage lending reforms will be one of the organization's priorities during the 2009 legislative session, Cohen added.
"AARP will work tirelessly to protect not only older consumers, but consumers of all ages, from unfair or deceptive lending practices," Cohen said. "We've got to reverse the financial insecurity and devastating social and economic consequences these practices have had for Oregonians and our neighborhoods, and communities.”
Local, State and Federal Resources Can Help
The good news is that there are a variety of resources at the local, state and federal levels available to help homeowners prevent foreclosure, and protect themselves from scams or unfair lending practices.
Please refer to the resources listed below.
Related Articles
Get Above Water: When You Are Struggling to Make Mortgage Payments
AARP Research Report (Sept. 2008): A First Look at Older Americans and the Mortgage Crisis
Center for Responsible Lending Report: Solutions to the Foreclosure Crisis
Center for Responsible Lending Report: State & Local Foreclosure Prevention Policy Options
National Governors Association State Summit on Foreclosures and Housing Solutions
Other Resources
AARP Get Involved Advocacy Center
Oregon Department of Consumer and Business Services
Get an overview of the foreclosure process in Oregon, tips for homeowners to avoid foreclosure, a list of foreclosure counselors in Oregon, and more.
Call 1-800-SAFENET toll-free or visit www.dfcs.oregon.gov/ml/foreclosure/counselors.html.
Oregon Department of Consumer and Business Services' "Foreclosure, you can avoid it"
Call 866- 814-9710 for a free copy or download it here: www.dfcs.oregon.gov/pdf/3496e.pdf
AARP's "Borrower's Guide to Home Loans"
Call 866-554-5360 toll-free or e-mail oraarp@aarp.org for a free copy of publication D17381.
U.S. Department of Housing and Urban Development: Avoiding Foreclosure
How To Avoid Foreclosure Brochure
Help for Homeowners Facing the Loss of Their Home
Institute for Foreclosure Legal Assistance
Offers information and links to newly-funded legal services programs, including AARP's Legal Counsel for the Elderly.
Acorn Housing HELP (Home Equity Loss Prevention)
Free foreclosure counselors. Call 1-888-409-3557 toll-free or online at https://secure.acornhousinghelp.org/.
State Attorney General's Consumer Hotline
To report foreclosure scams: 877-877-9392 toll-free or online at www.doj.state.or.us
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