The COVID-19 coronavirus pandemic has negatively impacted older people in the United States, both in terms of more dangerous health consequences of the disease itself and in terms of the ability of older traditional mortgage borrowers to make payments on time. Many older homeowners are at greater risk of losing their homes to foreclosures as a result of the pandemic, according to new figures released this week by the Consumer Financial Protection Bureau (CFPB).
The CFPB, in collaboration with the US Census Bureau, has been tracking the economic impact of the pandemic on older people since April 2020, almost since the announcement by the World Health Organization on March 11 of that year.
“In July 2021, about 682,400 elderly homeowners were delayed on mortgage payments,” according to data released by the Bureau. “In addition, the 236,000 senior homeowners who had their current mortgage were not sure if they would be able to make the payment next month. While the number of older homeowners holding back mortgage payments appears to be declining in recent months, the survey data shows large fluctuations over time. Accordingly, the CFPB will continue to monitor emerging data and identify relevant trends. ”
Exposure to older homeowners also appears to be stronger for older people of color than for their white counterparts, according to the study.
“Overall, 4.4% of older homeowners with mortgages delay payments. Differences in the proportion of older homeowners not paying mortgages are most noticeable by race / ethnicity and income, ”the Bureau explained. “In particular, the proportion of older people withholding mortgage payments is higher for non-whites and older homeowners with incomes below $ 25,000 than their peers.”
Interestingly, the proportion of older homeowners not paying mortgage payments also disproportionately affects households of three or more people, the data show.
“[I]In general, older people who delay mortgage payments live in families of 3 or more people, ”the data says. “In addition, one third of older people who delay mortgage payments live with minor children. Thus, any foreclosure on older homeowners living with 3 or more people will displace not only the older homeowner, but often several generations living in the same home. ”
Reports of older homeowners who are delaying mortgage payments also correlate in many cases with reports of a family member recently losing a job, the data said. Up to 36% of older homeowners fall into this category, indicating to the CFPB and the Census Bureau that these people’s fortunes are also linked to broader economic recovery.
While it is possible that at least some of those affected by these issues could fall into the demographic realm of the reverse mortgage product category, traditional forward lenders are showing a growing determination to serve older people with new, traditional mortgages in line with the pre-pandemic situation. making report from the Wall Street Journal.
Earlier this year Bankrate singled out one case where a 97-year-old borrower received a new 30-year forward mortgage. According to the loan officer, since the same underwriting rules apply to older people as to younger people, all a client needs is income and assets to qualify for a loan.
Read data release in CFPB.