AARP recently declared that the provisions in the recently passed Mortgage Relief in the House of Representatives were good for seniors and encouraged the Senate to pass a bill quickly. Resistance by those in the Senate has increased during the last few weeks against this bill because of the broad implications that it may have on the financial services industry. By allowing bankruptcy judges to write down mortgage balances in order for homeowners to an affordable level of payments has many in the financial services industry running scared as this allows judges the ability to modify contracts and thus calling into question the value of the actual loans and mortgages. According to AARP research, they show that even at the end of 2007, a quarter of all foreclosures or delinquencies were on mortgages held by Americans age 50+. While the figures quoted by AARP are somewhat stale, they identify a segment of the population in need of some type of relief. Many seniors may not qualify under current or proposed standards for mortgage modifications because of a limited, fixed income. AARP claims that seniors 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.
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.
Maybe AARP is looking to add a bankruptcy attorney referral service/solution to its co-branded portfolio of products?
For the full AARP Statement, click here.