AARP. This glitch in the foreclosure crisis arises due to the prevalence of mortgage notes obligating husbands-only; when they die, their widows often do not qualify to refinance the mortgage note.
According to the AARP study, the mortgage foreclosure rate for persons over 50 rose by 23% between 2007 and 2011. The causes are believed to be the surviving spouse's fixed income, the increased cost of needed medication, and the small print on the couple's mortgage note.
Our rapidly aging population is also to blame. This demographic has produced a disturbing Catch-22: to stay in the home, the widow must take over the mortgage payments; but in order to do that, the payments must be up-to-date. In many cases where the wage-earning husband dies, especially following a long illness, the unsuspecting widow finds that the mortgage is already significantly behind.
Add to his dynamic the fact that, in general, elderly Americans are saving less and spending more. Our elders between the ages of 65 to 74 are becoming indebted at the fastest rate of any other age-group.
In the case of a widow in poor health, the application process alone can be hazardous to one's health. As veterans of the process can attest, the process features unanswered phone calls, and repeated requests by loan servicers for the same documentation.
The lesson implied in this ominous trend is to get your house in order, literally, prior to the death of one of the spouses. This means that a married couple should make every attempt to place both spouses on the mortgage note so that refinancing the marital home is not necessary following the death of one spouse.
Another "best practice" is to have each spouse participate in paying the bills and managing the mortgage when one of the partners attains age 50. Traditionally, one spouse takes primary responsibility over the bill-paying tasks. Familiarity with the process will reduce stress levels when, for example, a widow finds herself as the only one left to keep the mortgage on track.
Finally, having an executed estate plan will reduce stress when a spouse dies. Consult with an estate planning attorney in your community to learn more about your options. Good luck out there; if you don't look out for yourself, no one else will.