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Older Homeowners Struggle with Mortgage Debt

About 1.7 million people 55 and over are behind on home loan payments

A foreclosure sale sign in seen in front of foreclosed home

Justin Sullivan/Getty Images

En español 

The pandemic continues to wreak havoc among homeowners and renters 55 and older, threatening some with foreclosure or eviction, according to recent U.S. Census Bureau data. Others reported having to cut back on necessities, such as food and medicine, to stay in their homes.

The data

The Census Bureau’s biweekly Household Pulse Survey shows how households are faring during the pandemic on a near real-time basis. For the most recent survey, which covers Sept. 1 through Sept. 13, the Census Bureau estimated that about 1.7 million homeowners aged 55 or older were behind on their mortgage payments. About 277,000 of those 55 or older viewed foreclosure as somewhat likely or very likely.

Of the 6.4 million homeowners of all ages behind on payments, about 1.1 million — 17 percent — were ages 55 to 64. Kim Blanton, author of the Squared Away Blog at the Center for Retirement Research at Boston College, notes that people in that age bracket don’t have Social Security benefits to fall back on. “If they lose their job, they don’t have steady income,” Blanton says.

Older homeowners aren’t the only ones facing the loss of their home: An additional 188,700 adults 55 and older are behind on their rent payments and face eviction. In August, the Supreme Court struck down the eviction moratorium declared in September 2020 by the Centers for Disease Control and Prevention (CDC).

A July report by the Consumer Financial Protection Bureau (CFPB) found that most households that are behind in their mortgage payments have three or more people living there. The recent census data reflected the same finding: 78 percent of households behind on their mortgages had three or more people in the household. “Any foreclosure therefore of older homeowners living with 3 or more people will not displace just the older homeowner, but often multiple generations living in the same home,” the CFPB report said.

Many of those who say it’s very likely they will face foreclosure are people of color who have household incomes of less than $25,000, the census data shows. Although the CFPB report didn’t connect low income and race to higher foreclosure rates, Blanton notes that many of those who lost their jobs during the pandemic tended to be people of color with lower incomes. The CFPB report does note that many older homeowners who are behind on their mortgage payments are also having problems paying for food and other expenses. About a fifth of those surveyed said that they sometimes or often didn’t have enough food to eat during the week; nearly half were getting help from nonprofits and the Supplemental Nutrition Assistance Program (SNAP) for meals and groceries.


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Some good news​​

There is some good news in the Census Bureau survey: The majority of homeowners older than 55 said that it was not likely at all that they would face foreclosure, and about 49 percent said they owned their properties free and clear. In addition, the number of those who said they were facing foreclosure in September was lower than those who feared losing their homes at the end of July.

The Census Bureau also notes that the Pulse survey is experimental, and that the margin of error in some categories may be substantial.

Although the pandemic-driven eviction moratorium imposed by the CDC has ended, it’s still possible to get mortgage forbearance from your lender to buy yourself some time, but you should act soon. Congress has not set a deadline on forbearance applications for loans owned by the Federal Home Loan Mortgage Corp. (Freddie Mac) or the Federal National Mortgage Association (Fannie Mae). The two own about 80 percent of all mortgages. But the Federal Housing Administration (FHA), which regulates the two mortgage giants, has set a Sept. 30 deadline for those seeking forbearance, as has the U.S. Department of Housing and Urban Development (HUD), the Department of Agriculture (USDA) and the Department of Veterans Affairs (VA).

Forbearance isn’t forgiveness; you’ll have to repay the payments you’ve missed. If you're in financial distress, talk with your loan servicer about your options. You may be able to find a mutually agreeable way to escape foreclosure and eviction — the worst-case scenario. Respond to any notices you get by phone or in writing. Coming out of forbearance can be a challenge, but don't make it tougher by ignoring the realities.​ 

John Waggoner covers all things financial for AARP, from budgeting and taxes to retirement planning and Social Security. Previously he was a reporter for Kiplinger's Personal Finance and USA Today and has written books on investing and the 2008 financial crisis. Waggoner's USA Today investing column ran in dozens of newspapers for 25 years.