More and more people are carrying mortgage debt into their retirement years, either through the purchase of a second home later in life or because of an adjustable rate loan that is on the rise.
Advisors who work with clients on the younger end of the senior spectrum may find some of them are struggling to meet the demands of their mortgages.

If that’s the case, AARP has some suggestions for saving the home or staying out of further debt:

  • Refinance, if it isn’t too late. Use a reputable lender and get a fixed rate.
  • Talk to the lender. Most will work with borrowers to come up with a payment plan.
  • Talk to a credit counselor. Usually mortgage debt isn’t the only problem.
  • Sell the home and downsize. This can be difficult if the house has sentimental ties, but it is better than losing the house outright and having no equity.
  • Consider bankruptcy. It’s a last option but is sometimes unavoidable.

While considering any of these options, consumers – and their advisors – need to look out for predatory scams. The National Consumer Law Center says foreclosure rescue scams come in at least three variations:

  1. Phantom help. The rescuer charges high fees for making phone calls or doing paperwork the homeowner can do easily. Homeowners get a false sense of hope.
  2. The lease/buy-back. Homeowners sign over the title to the home under the assumption they will stay in the house as a renter and be able to buy it back at a later time. These scams usually make the terms so arduous that the buy-back is impossible and the owner is evicted.
  3. The bait-and-switch. Predators get homeowners to sign papers that give the deed to the predator, but the owner thinks he is signing papers to bring the mortgage into good standing.

For more information and resources, visit www.aarp.org.