AARP Executive Vice President Nancy LeaMond applauded House passage of the Mortgage Relief Bill and urged the Senate to prevent further foreclosures by quickly taking up the Bill. Following is her statement:
"The bankruptcy provision that passed the House today will allow people at risk of foreclosure, especially older Americans, to rework their mortgages in bankruptcy court and stay in their homes in situations where previous voluntary loan modifications had failed. With rising foreclosures undermining everyone's property values, this new option will not only help hundreds of thousands of homeowners save their homes, it will help keep everyone's property values from sliding further.
The bill passed in the House today allows older homeowners a sensible, affordable and sustainable way to workout their mortgage debt in a format that recognizes all of their household debt. Nine in ten older Americans say they want to stay in their homes for as long as possible. But AARP research shows that even at the end of 2007, a quarter of all foreclosures or delinquencies were on mortgages held by Americans age 50+. Unlike younger homeowners, older Americans have limited time to recover from financial catastrophe and if they lose their homes, they lose not only their shelter but also what is frequently their largest retirement asset.
"Many older homeowners risk foreclosure because they have suffered from predatory lending practices, have large bills from a medical crisis, or other financial problems that have lead them to take second mortgages or home equity loans. While many of the loan modification provisions in the bill will help younger homeowners facing foreclosure, older homeowners facing foreclosure need a structure that recognizes the limits on their ability to recover. Few retired homeowners can expect to find lucrative new jobs and most have too short a career in which to build up savings to replace the equity in a foreclosed home.
"With the bill passed in the House today older homeowners at risk of foreclosure who can't benefit from refinancing or restructuring -- because they are too far in debt or have lost too much value in their home -- can exercise bankruptcy as an option of last resort. Their ability to stay in their homes will help all Americans by slowing the drop in home values and averting blight on neighborhoods caused by foreclosures.
"AARP urges the Senate to quickly pass this measure before too many older homeowners and others facing foreclosure find they have no other recourse."