Pam Rainey: Today’s seniors didn’t anticipate financial strain

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Pam Rainey

A few years ago, it was easy for senior citizens in America to "cash out" on their biggest investment: their home. The economy was different 10 years ago. These seniors who are underwater in their mortgages, and barely making ends meet, have not always been in a financial crunch. At one time their homes were paid for. Their retirement plans were healthy.

That was before they cashed out on their home and then went into credit card debt.

Now, some of these seniors find themselves unable to work due to their age and health. Their 401k accounts are drained, and they simply cannot live on Social Security and pay their mortgage.

Some seniors are now widows or widowers. They are paying a mortgage that is getting them nowhere and are trying to maintain a house. Roofs need repair. Hot water heaters break. Air conditioners get old. Keeping up a yard becomes more difficult as health concerns deepen.

These folks didn't do anything wrong. None of us had a crystal ball. Who knew what the economy was going to do? Because no one knew of the impending economic crisis, these seniors failed to factor into their budget the cost of medication and a supplemental Medicare insurance policy. Now a trip to the grocery store is where they first cut on their budget. Before long, these seniors become frail because they are not eating healthy, balanced meals.

So who can help? Here lies the problem. Seniors can be proud as they get older and are often ashamed to tell anyone how much in debt they are.

The adult children I talk to do not want their parents to suffer or worry about finances. They are clueless about their parents' financial woes because their parents have become great actors. And they will not share information about their income and and expenses with them.

But there is a solution, though it's difficult. The first step is gathering the family and telling the adult children about current debt and the frustration it causes.

The second step: Put your house on the market as a "short sale."

If a homeowner qualifies financially but can no longer make their payments, a real estate agent can help them through the tangled web of paperwork that is required for this transaction. (With all the paperwork involved, they should be called "long sales.")

The seller gives his or her real estate agent permission to discuss the loan with the financial institution that carries the mortgage, obtain documents for the homeowner to complete and then place the house on the market.

When a buyer comes along, the bank notifies the real estate agent if they will take the offer or if the agent needs to submit more offers. The seller is involved in the decision as to whether to take the offer or not.

Most of the time, the seller walks away from the transaction with no money in their pocket - but with a huge burden removed. No more house payments, upkeep or yard maintenance. At closing, sellers can obtain from the title company that indeed each lien against the house is paid in full.

The seller then can move to a senior adult facility - and there are many in our area. Some are based on income and are very fashionable and comfortable. Many have recreation facilities and transportation provided for the residents.

I know. This is a difficult decision for homeowners. But many who have made this decision and have gone through this process have told me that once they have sold their home, moved and settled into a new care-free life, their lives become less complicated. They can afford medication, proper nutrition and now have an overall sense of well being they did not have before.

There are times in life we have to make hard decisions and they are not always a result of making poor decisions in the past. Simply put, our world has changed over the last 10 years, and none of us could predict the crises now facing the country - and its seniors.

Moving forward with dignity is not only admirable but a learning moment for those who come behind us.

PAM RAINEY is a licensed Realtor, and her real estate information is brokered by Real T Team. Reach her at or 940-367-1188.

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