For the past seven years, Gerri Dolan has guided seniors through legal issues, sitting across the table from McHenry County residents as they face the stark reality of foreclosure.
She still remembers her first foreclosure as a lawyer with Prairie State Legal Services, a nonprofit that provides free legal advice for those with low incomes or who are over age 60.
“It was just upsetting to think that people who owned a home for 20, 25 years were losing it and did lose it,” Dolan said. “If you can think about how hard it might be for you to move at your age, think about someone who has been in a home for 20 or 25 years, is 70 years old and has to think about packing up and moving.
“It’s really a greater tragedy for seniors” than foreclosures in the under-60 set, although the numbers aren’t as great, Dolan said. “I think the tragedy is worse.”
More than 1.5 million Americans 50 years or older have lost their homes to foreclosure since the housing market collapsed in 2007, and 3.5 million more are at risk, according to an AARP report this year.
And as more baby boomers enter their retirement years, Dolan, who specializes in senior issues, doesn’t see the issue disappearing. Even as the housing market improves, she predicts a housing crisis as a glut of former homeowners try to find rental options.
Like many Americans, some seniors took advantage of low interest rates and high home values, perhaps to finance their retirement, the AARP suggests.
That’s one of the conclusions Ed Beckstrom reached.
Beckstorm is a counselor and the education and outreach coordinator for Consumer Credit Counseling Service of McHenry County.
He and the other counselors at the nonprofit who walk clients through their options see people who, during their 50s, lost their jobs and tapped into their savings to maintain their lifestyle. Now in their 60s, they don’t have anything left and can’t make their payments, he said.
Sometimes it’s a particular event – like a medical crisis, the death of a partner or a change in income – that pushes them over the edge, Beckstrom said. “It puts them in a situation where they can’t handle it anymore, and because they’re seniors, they don’t have a lot of options. They can’t get a job.”
Dolan sees many of the same things, adding that a bothersome trend is older parents who refinanced to help a grown child and now can’t afford the payments.
But despite 70 percent of Tony Bellino’s business coming from short sales, the ReMax real estate agent said he is not seeing seniors. He covers much of southern McHenry County and at the height of the housing crash, about 95 percent of his business came from short sales.
Bellino said he’s had only one short-sale client over the age of 60 and doesn’t know why.
Beckstrom has a guess.
“Short sales are such a cumbersome process,” he said. “It might take quite a while for the whole thing to work, and seniors tend to not really want to go through that. They don’t have the time and patience to go through the stress and emotional commitment.”
Plus, their credit score isn’t as important to them as it would be to a younger person, Beckstrom said.
The hit a credit score takes from a short sale is easier to recover from than one from a foreclosure.
Whatever the reason, Dolan doesn’t recommend sitting back and letting a foreclosure just happen.
This month Prairie State Legal Services started up a phone line dedicated solely to handle incoming foreclosure calls, a program paid for through a settlement between the federal government and some of the banks, said Sam Degrino, another lawyer with the nonprofit.
“I have a feeling that a significant portion [of the calls] that we take will be seniors,” Degrino said. “When it comes to foreclosure, seniors have many of the same problems that other homeowners have.”
Prairie State Legal Services provides free legal advice to seniors as well as a few other qualifying groups. The new intake number, specific to those with foreclosure issues, is 888-966-7757. For more information, go to pslegal.org.
Consumer Credit Counseling Service of McHenry County provides financial advice. For more information, go to illinoiscccs.org or call 815-338-5757.