Roy Johnson fell so far behind on his $1,000-per-month mortgage payments that last year he allowed the redbrick, three-bedroom ranch he had owned since 1963 to lapse into foreclosure.
“I couldn’t pay it any longer,” he said. “One day, I woke up and said, ”˜Hell, I’m through with it. I’m walking away from the house.’ ”
That decision swept Mr. Johnson, 79, into a rapidly expanding demographic: older Americans who have lost their homes in the Great Recession. As he hauled his belongings by pickup truck from this Atlanta suburb and moved into his daughter’s basement, Mr. Johnson became one of the one and a half million Americans over the age of 50 who lost their houses to foreclosure between 2007 and 2011. Of those, the highest foreclosure rate was for homeowners over 75.
Wait a minute. He bought the house in 1963? If he had the standard 30 year mortgage he would have own his house free and clear in 1993. The article says that he owned his house for 48 years. So something (probably a lot) is missing from this story.
Did he re-finance to take out a home equity loan? You know paying off a mortgage and not using your house a security for a loan is a good way to keep your house.
I had the same question. Poor journalism to leave so much unsaid. Here in the UK where property prices are astronomical, we often find that what we call The Bank of Mum and Dad steps in to help the kids get their own place, sometimes remortgaging their own home to do so.
For so many in this category, such as my wife and me, refinancing after paying on our mortgage for ten years just isn’t the best thing to do, and we fit into that category. She’s 67 and I’m 74. Fortunately, we have a very good retirement income……I’m retired USAF with a 100% disability rating with the VA, on Social Security with Medicare as my primary provider and the VA as my secondary. She is retired from a major insurance carrier, on Social Security on her own account, has an excellent 401K plan, we have money in the bank and tax-free municipal bonds. We are able to cover our expenses without trouble, and we manage to take monthly trips (mini vacations), we manage to have money left over. We have a 30 year fixed rate mortgage, and we often double up on the payments. If we were to refinance, we’d both be 20-30 years older by the time the mortgage was paid off. Not going to happen.
It’s just common sense to use good money management, and we’ve done that; she’s an expert money manager.
Exactly — he’s had his mortgage two years longer than I’ve been alive so how on Earth did that happen? I was a single mum and would have paid off my first house in 20 years if I hadn’t had to move.
Interestingly enough, it was the school tax and home insurance premiums that constituted the biggest chunk of my mortgage payment, not the P&I. In South Texas, the large, steady influx of illegal immigrants who have school-age children and the hurricane threat and actual tropical storm damage make things costly.
If the loan was non-recourse, then the bank has no moral right to complain – it knew the terms and accepted them.