A study by a University of Iowa researcher found that age, education and race were factors that didn’t follow the norm in determining who would be impacted by the mortgage crisis. Jerry Anthony examined bankruptcies from 2007 where people had become “house broke” or faced a mortgage payment that became too big. Anthony says he was surprised to find that people over the age of 40 were not more financially stable than younger homeowners.

He says the study found people over the age of 60 paid a higher percentage of their income on housing than people under the age of 40. Anthony says you would expect people over the age of 60 to have paid off most of their mortgage, and have lower mortgage costs, but he says that wasn’t the case. Anthony, an associate professor in the school of urban and regional planning, says older people tend to carry more debt, and lenders seemed to target them.

Anthony says “predatory lenders” took off between 2006 and 2007, and “targeted people of that older generation in a pretty systematic manner.” He says the lenders would offer loans against the equity in homes and that gave people a bigger debt load. Anthony says education didn’t help people stay away from problems, as the study found those with less education had lower housing costs.

Anthony says people were perhaps too smart for their own good, as they consolidated all of their unsecured loans into a mortgage secured by their home. He says that can lower the interest rate and give you a tax deduction for the loan interest, but he says on the down side, if you miss mortgage payments, lenders are going to come after your house. Anthony says if you miss a few credit card payments, the credit card companies are not going to come after your house. The study also found the mortgage problems didn’t follow the tradition trends when it came to race.

Anthony says all research from the past has been consistent in finding that Hispanics and African-Americans paid more for their housing when compared to whites. But he says this study found no race differences when it came to the bankruptcies, which he says was surprising. Anthony says there’s plenty of blame to go around for the mortgage crisis, from predatory lenders to naive consumers. Anthony says people should re-think the idea that owning a home is always the best way to go. He says it depends on how long you plan to stay in the home and how much you would have to pay in rent.

(Dar Danielson/Radio Iowa)