Zillow: Older Americans More Likely To be Delinquent on Underwater Loans

While the younger age brackets—at 48% of those 40 under —are most likely to be underwater on their home loans, the oldest borrowers are more likely to be delinquent on their mortgage payments, reports Zillow in its second quarter negative equity report. 

Delinquency (measured as a borrower who is 90 days or more past due on a mortgage payment) among those who are underwater is most common in the oldest and middle age brackets with 10.6% of underwater borrowers over the age of 85 delinquent on their mortgage payments and similar percentages of borrowers in both the 40 to 44 and 45 to 49 age brackets delinquent on their mortgages, Zillow says.

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“An explanation for this divergence might lie in the fact that while younger borrowers are more commonly underwater, they are underwater by less than those in older age cohorts. This can be seen by comparing the median loan-to-value ratio of underwater borrowers by age, which is lower in the younger age brackets.”

View the research in detail

 Written by Elizabeth Ecker

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  • “Reverse mortgages are not mortgages.  They are essentially equity release and equity conversion.”  Really?

    I have yet to meet a borrower who has “defaulted” on their equity.  Defaults occur on debt covenants and particularly on mortgages.  With such sophomoric descriptions of a reverse mortgage as the quotation above, it is no wonder that seniors are so confused about reverse mortgage mortgage obligations.

    I know several originators who proclaim that they explain reverse mortgages like the quotation above but then make sure seniors understand it is debt.  Could they make it more confusing?  Most of our customers barely understand the forward mortgages they had so why are we so determined to confuse them even more with a bogus concept like equity release and equity conversion?  Is that “reverse mortgage education” at work???

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