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Posts Tagged ‘home equity’

Mortgage Debt: Problematic for Retirees

September 27th, 2013 Comments off

The Consumer Financial Protection Bureau (CFPB) says 30 percent of homeowners over 70 have mortgages to pay off. A study for 2001 reports eight percent of owners over 75 were carrying mortgage debt. More homeowners over 65 continue to pay on their homes into their retirement years, and that may make it more difficult for them to remain in their homes long term. Health care costs, property taxes and home maintenance will likely rise against incomes that rise little, if at all. Eric Belsky, managing director for Harvard University’s Joint Center for Housing Studies, states the number of households with persons over 65 will rise by 11 million over the next ten years. As nytimes.com reports, reverse mortgages may become more prominent. The homeowner borrows against home equity, but must have enough resources to maintain insurance and taxes, or they could lose the home. Most reverse mortgages are insured by the Federal Housing Administration (FHA), MHProNews has learned. A study of 32,000 people who sought information about reverse mortgages from 2006 to 2011 will be released in Nov. 2013.

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Housing Recovery should help Middle Class

April 19th, 2013 Comments off

CNNMoney informs MHProNews Federal Reserve Governor Sarah Bloom Raskin says now that the housing market is improving, middle class families who have not been able to take advantage of the low interest rates may now have that opportunity. Speaking at the Levy Economics Institute’s Minsky Conference, Raskin said, “As house prices rise, more and more households have enough home equity to gain renewed access to mortgage credit and the ability to refinance their homes at lower rates.” She said Federal Reserve research indicates a home price increase of ten percent could be sufficient to propel 40 percent of underwater homeowners into the black.

(Image credit: Joshua Scott/CNNMoney)

Lenders Say Housing Recovery is Happening

April 9th, 2013 Comments off

According to what HousingWire tells MHProNews, 70 percent of lender professionals believe the housing recovery is real, and will continue to improve during the coming six months. Sixty percent of bankers think credit will be available over the next six months for refinancings, and 59 percent say credit will be available for residential mortgages. Andrew Jennings, chief analytics officer at FICO, says, “ Mortgage lenders have been understandably guarded over the past five years. The improvement in their sentiment should be welcome news, and I wouldn’t be surprised to see lenders cautiously expanding their mortgage and home equity lending businesses.”

(Image credit: HousingWire)

Housing Crisis Tab: Nearly a Year’s GDP

September 11th, 2012 Comments off

HousingWire reports Ann Fulmer, with fraud analytics firm Interthinx, said the nation’s housing meltdown, with all the mortgage-backed securities litigation, bailouts, lost home equity, and lawsuits cost $13 trillion, almost as much as the $15 trillion gross domestic product (GDP) for 2011. Speaking at a Mortgage Bankers Association (MBA) gathering, she noted, “We did not pay attention to data integrity on the way up, and so we have wiped out almost an entire year of gross domestic product in the United States.” She said in the future, loan originators or borrowers may try to fudge on loan applications, supporting documents, or manipulate numbers for the down payment amount. “If that becomes the standard then that becomes the problem area.” As MHProNews has learned, she added, “If you don’t get it right up front then you have a defective loan.”

(Image credit: HousingWire)

Foreclosure Rate for Seniors Rising

July 27th, 2012 Comments off

In a study by the American Association of Retired Persons (AARP) written up in SeniorHousingNews, seniors have taken a big hit in foreclosures since 2007, with those 75 and older having a rate of 3.2%, higher than younger members of the 50-plus age group. The foreclosure rate on prime loans for older homeowners increased from 0.1% in 2007 to 2.3% in 2011. AARP adds: “In their older years, people often tap their home equity—the biggest asset that many have—to pay for long-term care, home maintenance, medical bills and other expenses. What happens when that money no longer exists?” As MHProNews noted in an earlier story July 18, 2012, 7-10,000 Americans reach 65 years of age every day.

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Seniors Fare Better During Housing Crunch

July 6th, 2012 Comments off

Senior Housing News states although household net worth across all age groups fell 35 percent between 2005 and 2010, from $102,844 to $66,740, for 65+ homeowners the drop was only 13 percent, from $195,890 to $170,128. The 35-and-under households median net worth dropped from $8,528 to $5,402, a 37 percent decline. The most home equity of all age groups is the 70-74 range, with a value of $140,000. MHProNews.com has learned much of seniors’ net worth, excluding home equity, is in outside investments.

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CFPB to Require more Transparency in Reverse Mortgage Market

June 29th, 2012 Comments off

NationalMortgageNews reports senior citizens, the primary target of reverse mortgages, do not fully understand its risks and features and the tradeoffs involved, leading the Consumer Financial Protection Bureau (CFPB) to plan stronger disclosure requirements. In a conference call with reporters, CFPB Director Richard Cordray said, “They may focus primarily on the amount of money they can garner in the short term, and underestimate the long-term costs and risks.” A study by the bureau last year disclosed 73% of borrowers accessed nearly all of their home equity available in the reverse mortgage, with little or no planning for taxes and insurance in the future. While the bureau does not plan to eliminate any current products, Cordray reiterated CFPB will use its enforcement authority to root out unfair and deceptive practices. MHProNews.com has learned of mailed literature claiming a reverse mortgage is a government benefit.

(Image credit: Senior Equity Financial)

Middle-class Americans Net Worth Falls

June 19th, 2012 Comments off

Because so much of the net worth of middle-class Americans is connected to home equity, the housing downturn led to household net worth falling from $102,844 in 2005 to $66,740 in 2010, as house prices have fallen 35% below their peak in 2006, according to Standard & Poor’s/Case-Shiller index. While the drop in net worth cut across all age groups and education levels, HousingWire says households between 35 and 44 took it on the chin—their net worth fell 59%. Those younger than 35 lost 37%, while the 65 and older set lost 13%. Households that had a high school diploma lost 39%; the net worth of those with a bachelor’s degree saw a 32% drop.

(Graphic credit: HousingWire)

American Families’ Net Worth Drops

June 12th, 2012 Comments off

OriginationNews tells MHProNews.com primarily as the result of lost home equity, the median net worth of American families plummeted from $126,400 in 2007 to $77,300 in 2010, a drop of 38.8 percent in just three years. According to the Federal Reserve’s Survey of Consumer Finances in 2010, three-fourths of the loss was the fall in home equity. For the same period, average net worth dropped 14.7 percent, to $498,800 from $584,600. The previous three-year period, 2004-2007, median net worth increased 17.9 percent, while average net worth rose 13.1 percent. Median income fell less than net worth 2007-2010, dropping from $49,600 to $45,800, while average income fell from $88,300 to $78,500 during the same period.

(Graphic credit: HousingWire)