Older homeowners in foreclosure have one advantage that others do not. The Older Americans Act of 1965. The Act created the federal Administration on Aging, which in turn funds state Legal Aid offices to assist older Americans with legal issues, including foreclosure. Because of this law, most jurisdictions offer seniors free legal assistance with foreclosure. Go to the Department of Health and Human Services web site to find resources in your area. You can also locate your local Legal Aid office on the Legal Services Corporation website.

This help is available without means testing—so you don’t have to worry about whether you own a second home in the Hamptons or are the beneficiary of an extremely profitable retirement fund. The idea behind the Older Americans Act is to keep as many older Americans as possible living independently in the community. As such, these offices and your local administration on aging offer plenty of resources and assistance with mortgage problems and other issues (such as making sure you are getting the benefits you are entitled to, which can free up money to pay your mortgage).

Reverse Mortgages

Taking out a reverse mortgage is one option for older homeowners seeking to avoid foreclosure. This type of loan is only available to borrowers who are 62 years old or more. A reverse mortgage is different from an ordinary mortgage because it pays the owner of the property. You borrow money, in this case, to pay off your existing mortgage, and the lender takes a lien against your property. You do not make any payments. You get to stay in the home as long as you live. While you are alive and living in the home, interest accrues. When you pass on, move out, or sell the home, the mortgage balance becomes due. Neither you nor your heirs are responsible for any shortfall if the mortgage balance exceeds the value of the home.

Reverse mortgages are not for everyone. For one thing, they are taken out in the expectation that the mortgage balance will increase. That means you can’t get a loan for the full value of the home. How much you can get will depend on several factors, including your age at the time of the loan. You will not be able to own the property with anyone who is younger than 62, which may complicate estate planning.

Conclusion

As an older American facing foreclosure you have options that are not available to younger debtors. Make sure you know about your rights and don’t be shy about using the free services that are available to you.

Go here for articles on elder law.

If you do need to consult with an estate planning or real estate attorney, you can find one at AttorneyPages.