Homeless Older Adults

The economic downturn continues to affect older adults, as evidenced by AARP’s recent suit against the Department of Housing and Urban Development (HUD).  It’s about reverse mortgages.  AARP argues that HUD—by insisting that surviving spouses (who are not named on the mortgage) pay the full loan balance to keep their home—is pushing older adults into foreclosure. And in fact, this policy ignores HUD’s own provisions against displacing a surviving spouse.

Reverse mortgages, which pay older homeowners a regular sum against the equity in their house, were designed to shield borrowers from economic upheaval. More than a half-million people have received reverse mortgages since Congress authorized the program a quarter-century ago. Those who withdraw equity cash through this program must be at least 62 years old. Participants receive either a lump sum or monthly payments from lenders. After their death, the house is sold and the mortgage is paid off. However lenders sometimes encourage only the elder member of a couple to put his or her name on the mortgage—hence the issue with the surviving spouse having to pay-off the mortgage.

Since last year, more than 32 percent of all San Diego County homeowners with mortgages were upside-down—owing more on their mortgage than the house is valued—according to CoreLogic. During the past three years, more than 640,000 Californians have lost their homes. This statistic reflects other key indicators of economic health. The average credit card debt among adults aged 65+ was $10,235. The consequences of the burst housing market and the resulting loss of equity have resulted in one in seven older adults facing retirement with a negative net worth.  It comes as little surprise that AARP in 2008 reported that Americans aged 50 and older accounted for approximately 28 percent of all delinquencies and foreclosures.

One repercussion from these events is that over the next ten years, HUD projects a 33 percent increase in homelessness among adults over the age of 62. This was unheard of in the past. In HUD data for San Diego County in 2009, individuals aged 51 years and older occupied 28% of local emergency shelters (933) and occupied 25% of all transitional housing (1018). Two years ago, Los Angeles-based Shelter Partnership, an advocacy group, released a study showing that among Los Angeles’ homeless population, 3,000 to 4,000 are over 62 years old and more than two-thirds struggle with some disability.

In our nation’s history, homelessness has rarely been an aging issue. With social security, Medicare, and rising home equity, older adults were unlikely to be displaced. The new economy has changed that. To help the homeless San Diego has eleven agencies and you can access their contact information at http://allcare.net/s2/sd.php#shelters. If you are having trouble with your mortgage and need free unbiased advice, try San Diego Home Loan and Education Center tel: 619-624-2330. Sometimes bad things happen to good people but it is prudent to check out all options beforehand. It is important to realize that this is happening across San Diego County and that you are not alone.