INCREASING NUMBER OF OLDER BORROWERS FACE FORECLOSURE

Many older homeowners on low fixed incomes are now facing foreclosure, say legal-aid advocates and AARP attorneys, because they were often fraudulently sold loans they could never afford, the Wall Street Journal reported today. Many of these homeowners had lived for decades in their home and had built up substantial equity, but had low incomes. This made them tempting targets for brokers who persuaded them to refinance their mortgages, telling them they could lower their monthly payments. Instead, many of these loans were loaded with fees and exploding interest rates and quickly became unaffordable. Hundreds of thousands of people in once-hot markets such as California’s Central Valley fall into this category, say housing counselors. Often the only way to keep these people in their homes is if lenders rescind the fraudulent loans or reduce the principal, steps most are unwilling to take.