Mortgage Loophole Leaves Many Widows Fighting Foreclosure
Several women across the country who have lost their husbands -- who, in many cases, were the sole holder of their homes' mortgages -- are fighting to stay in their properties, according to The New York Times.
One factor that may keep many of these women from being able to stay in their residences is that numerous lenders have certain rules and regulations pertaining to spouses whose names are not on the mortgages of their homes, the paper notes.
In one case, the newspaper reports, a Florida woman who lost her husband to kidney failure in 2011 was not named on home loan forms. Because of this, she cannot get her home's lender to lower her rates and terms, nor have them accept her checks for monthly payments. Should she continue to be unable to do this, foreclosure could be imminent.
To amend this oversight, a number of Americans have asked the Consumer Financial Protection Bureau to step in and implement regulation that will help these widows remain in their homes and current on their loans, according to the Times.
"Surviving spouses are trapped without a clear way to preserve their home," Housing and Economic Rights Advocates lawyer Arabelle Malinis told the newspaper.
Should legislation be put in place by the CFPB in the near future, many older borrowers who are added to their mortgages for their homes may look to lower their monthly payments.
According to a study by AARP, roughly 3.5 million loans among Americans ages 50 and older were delinquent as of December 2011. With this high rate, senior borrowers might want to consider speaking with lenders and other debtors regarding a reduction in debt. Without doing so, the demographic could see a rise in foreclosures on their homes, which could deter not only their personal finances, but housing conditions nationwide as well.
See more on Credit.com:
How Do Short Sales and Foreclosures Impact Credit Scores?
Rebuilding Damaged Credit After Your Spouse Dies
11 Tips to Repair Your Credit
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