New Orleans The AARP has issued an invaluable and depressing study meticulously collected from mortgage loan data in the available years since the housing crisis went full blown in 2007. The information seems radically different from the spinning popular mythology and the profile of the foreclosure victims among the chattering classes (including British bank regulator and economist Adair Turner who we discussed a couple of days ago). The AARP data lines up much more closely with what we have found in the Advocates & Actions pilot program in Phoenix over recent years.
The study indicates that the victims are older and were more often facing payments based on prime interest rates rather than subprime rates, meaning these borrowers had more citizen wealth and were not steered out of traditional products. The source for that information was none other than the huge Federal Reserve Bank of New York.
Most disconcerting, according to the AARP study and the report in the Times most seniors are up against the wall on their loans simply because they are on the wrong side of the recession:
- Pension cuts
- Rising medical costs
- Shrinking stock portfolios
- Falling property values
Looking at those four triggers for senior foreclosures is disturbing because to my knowledge there is absolutely NO PROGRAMS anywhere that address the fundamental issues that simply come down to more “month than money.” This demographic from boomers hardly 50 through seniors in their 70’s are not going to find much work, even flipping burgers and pretending to be security these days.
Equally troubling, the AARP and Federal Reserve are clear that these seniors are “not saving enough money.” How the hell could they?!? According to the Federal Reserve, “half of households whose head is between 65 and 74 have no money in retirement accounts….” Talking to scores of former ACORN employees, some with decades of seniority and others caught in the doldrums of the nonprofit market, who are about to receive distributions from the old ACORN retirement fund closeout, it is depressing how many are going to have allocate most of their retirement money to pay-off loans, debts, and even pieces of mortgage arrears that they have accumulated over the last couple of years. And, these are the lucky folks in this recession, since they have a check coming rather than no prospects.
Polls today released by the Times indicate for the first time that George Romney has pulled ahead of Barack Obama coming into the November election and the drift to the right is being pushed by fears of the economy not improving. Like a broken record I keep saying that Tim Geithner and the Treasury Department who were so rolled by Wall Street and the banks on the housing crisis have critically (and I hope not fatally damaged) the President, but abysmally failing to realistically address the foreclosure and housing crisis in the country. The result of such failure leads to desperation and such desperation could find just these folks voting for Romney hoping that something might help them, even though there’s no hope that he would be anything but worse on this issue.
What a mess!