We are now more than 10 years removed from the housing market collapse that set off the Great Recession, and the dust is still settling. Though the economy has improved in many ways, many Tennessee residents are still struggling with mortgages and other forms of debt.
A lawyer with experience in debt relief can help people understand their options, including mortgage modification and Chapter 7 bankruptcy.
A recent report showed how parts of Tennessee were hit especially hard by one of the many questionable financial practices that set off the recession: reverse mortgages. And they are still suffering. According to reporters from USA Today and the Memphis Commercial Appeal, primarily African American neighborhoods in Memphis have seen dramatically higher rates of foreclosures linked to reverse mortgages. The problem is most pronounced among seniors and older residents.
Researchers looked at 1.3 million loan records from recent years all over the country. Among other findings, they found 130 foreclosures in Memphis that resulted from problems with reverse mortgages. Their report said lenders targeted lower-income African American neighborhoods, where they encouraged vulnerable seniors to take out reverse mortgages without fully explaining the risks. When many of these seniors later ran into financial trouble, they ended up losing their homes.
Reverse mortgages provide a way for homeowners to collect their home equity without having to sell the home. Essentially, a reverse mortgage is a loan that is paid back as the home gains in value. A person who intends to live in their home for the rest of their life can use a reverse mortgage as a source of funds. Foreclosure may become a possibility when the homeowner is unable to meet property tax and insurance payments, or when they fail to abide by the terms of the loan.
It's a terrible thing to have to face foreclosure on a home, and it's infuriating to see people suffering because of unfair lending practices. An attorney with experience in debt relief can help homeowners find ways to return to financial health.