Are Old People Too Dumb To Get A Mortgage?

Are Old People Too Dumb To Get A Mortgage?The are some snippets of information which are hard to miss and this one surely caught my interest: According to the Mortgage Bankers Association, “cognitive decline impacts the housing behavior of older Americans.”

Does this mean older people are increasingly too dumb to buy real estate or get a mortgage? Apparently in some cases the answer is yes.

“The Baby Boomers are entering their traditional retirement years with an expectation of living longer than prior generations but also with more debt, meaning that they will have to make increasingly complex housing and financial decisions. In addition, the number of Americans over the age of 60 will grow to nearly 62 million by 2024. This study highlights the fact that memory loss in particular raises particular challenges for the financial well-being of older Americans and suggests that we may need to reassess how the mortgage industry designs, originates and services financial products for seniors,” said Lynn Fisher, MBA’s Vice President for Research and Economics.

As someone well past “traditional” retirement age I am deeply concerned about this issue. My fear is not that the report may be right but that it may be too narrow.

Does Renting Make You Forgetful?

According to the study:

  • 28% of homeowners and 36% of renters aged 65 and older in 2012 rated themselves as having a fair or poor memory.
  • 7% of homeowners and 16% of renters aged 65 and older in 2012 self-reported a medical diagnosis of memory disease.
  • For older homeowners, memory and cognition hold relatively stable until the late 70s, then decline fairly rapidly.
  • Likewise, the incidence of memory disease rises steadily with age. By age 90, about 20 percent of older homeowners suffer from memory disease.

If we can agree that many people suffer some form of memory loss as they get older, then several questions arise.

Given that nature has given us excess capacity such as two kidneys when we only need one, do we not have so much mental ability that a few lost thoughts are not a big deal? It’s often said that we only use 10 percent of our brain power, an urban myth, though if you listen to politicians the figure could arguably be lower.

Do older people suffer from memory loss, or are they just trying to forget some of the horrors encountered over lives long lived? Could it be that forgetting stuff is a sign of good mental health, a way to cope with unpleasant thoughts? Think about people who have had a terrible car accident. Why would anyone want to remember that?

Mental Tests For All Mortgage Borrowers

The study tells us that “as increased longevity pushes many financial decisions to later ages, there is substantial interest in the extent to which cognition can be improved and its natural decline forestalled. One pathway for this is the ‘use it or lose it’ approach, in which more stimulating environments for older individuals, including the workplace, may help to preserve, and perhaps enhance, cognitive acuity. Borrowers and lenders will need to keep abreast of these developments as our understanding of aging, cognition and financial decision-making continues to evolve.”

If Doug Neidermeyer was reading this there’s no doubt he would describe such a conclusion as “worthless and weak!” The fact that we have “traditional retirement years” is evidence of the great social pressure to toss experienced workers out of the workplace, not make them more productive or mentally agile. Think of Admiral Hyman Rickover, the brilliant engineer and father of the Nuclear Navy who politicians and federal contractors wanted to dump after only 63 years on the job.

Why not get to the real point? If old people have fading memories then shouldn’t federal regulators require mental acuity tests to assure that some poor soul age 65 and above does not get financing which is unneeded or too expensive?

And in fairness — given what we know today about cognition — why single out the elderly? Maybe there should also be mental tests for those with a career in football, people who drink or smoke, individuals who have worked on Wall Street and anyone getting a reverse mortgage. In fact, realizing that one cannot be too careful, then regardless of age maybe there should be universal mental acuity tests for everyone getting a real estate loan….

Of course, the first question on such tests should be: Who was Doug Neidermeyer? There will be extra points for anyone who can explain the meaning of Dylan’s It’s All Over Now Baby Blue.

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4 Comments on "Are Old People Too Dumb To Get A Mortgage?"

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  1. Roddy Pfeiffer says:

    It’s pretty dumb to go into retirement with a mortgage. Was this written by a mortgage broker?

  2. Dan says:

    Anyone who has a mortgage payment after age 60 will be in trouble. A lender who presents a mortgage to a borrower where the terms surpass the borrower’s 65th birthday is a fool.

  3. Good Neighbor says:

    I’m in my “middle years”. Most adults I know own their own home…. and of those that are now “seniors”, they finished paying off their 15 yr. and 30 yr. mortgages some time ago. Thus, they have no need to “get a mortgage”. So, really, which people are the ones that are dumb? It’s not any elderly that I know!

  4. Ken says:

    If the Feds stop spraying us with aluminum, Barium and other metals we might have better memories and less cancer…..

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