The News Story – The foreclosure crisis is still burning years after the housing crisis ended

Though the media keeps harping on glowing stories about the improvement of the real-estate market, a large segment of Americans are still facing the threat of foreclosure.
 
Reports the Washington Post, about 800,000 Americans are in the middle of “transitioning out of” President Obama’s foreclosure-relief initiative.  According to thePost, “About 28 percent of the borrowers who qualified for the Home Affordable Modification Program (or HAMP) redefaulted since the government launched its effort in 2009.”  About 11% of program participants were in danger of defaulting as of November 2013 because of missed mortgage payments.  For remaining program participants, only time will tell.  When RAMP ends, these borrowers will see their interest rates—which had been dramatically slashed—slowly start to climb again.
 
Research suggests that as serious as the housing crisis was, however, factors beyond interest rates and mortgage payments may lie behind at least a part of the current foreclosure epidemic.

The New Research – Divorced, in default, and depressed

Consequent to the economic meltdown of 2008, millions of Americans found themselves in default on their houses, with hundreds of thousands actually losing their homes.  Not surprisingly, in a study recently completed at the Universities of Maryland, Pennsylvania, and North Texas, researchers report that many of those caught in this tidal wave of default and foreclosure are suffering from poor physical and mental health.  Nor should it astonish anyone that a disproportionate number of those caught in this destructive maelstrom are divorced and separated. 
 
To determine the effects of housing strain and mortgage foreclosure on health, the researchers surveyed 798 residents of Arizona, California, Florida, and Nevada—the four states with the highest rates of foreclosure in July 2008.  The data so obtained reveal a strong linkage between housing strain and both physical and mental health.  “Homeowners in default or foreclosure reported the poorest health status of any housing group on multiple metrics,” the researchers report, “differing most from homeowners with no housing strain.  Owners with moderate strain and renters reported intermediate health outcomes.”  A similar pattern prevails for psychological well-being: reports of “serious psychological distress” come from less than one-fiftieth (1.4%) of home owners experiencing no housing strain, while such reports come from over one-fifth (21.4%) of those in default or foreclosure.  Reports of serious psychological distress come from slightly less than one-tenth (8.8%) of renters.
 
Statistical analysis establishes the differences in well-being separating homeowners feeling no housing strain from those in default or foreclosure as highly significant (p < 0.001 for both physical health and psychological distress).  But further statistical analysis reveals that those in default or foreclosure are decidedly less likely than secure homeowners to be in an intact marriage.  The researchers report that, compared to homeowners feeling no housing strain, “homeowners in default or foreclosure were less likely to be married” (p < 0.05).  Among homeowners reporting no financial strain in their housing status, about four-fifths (78%) were married and only one tenth (8.8%) were divorced or separated.  In contrast, among home owners in default or foreclosure, only two-thirds (66.7 %) were married, almost one-fifth (19.8%) were divorced or separated, and slightly over one-tenth (11.5%) had never married.  Among renters in this study, about half (51%) were married, about one-third (33%) had never married, and about one-seventh (15%) were divorced or separated.
 
The researchers understandably see in their findings evidence that “homeowners in default or foreclosure represent an identifiable high-risk group.”  But their study also identifies marital status as a dividing line between those at high risk and those at low risk not only for housing strain but also for all the physical and mental ills that come with that strain.  The researchers suggest that their study might justify “coordinated, affordable health and social services” for the “vulnerable population” found among homeowners.  But wise policymakers will recognize the need to shrink that vulnerable population by fostering more enduring marriages.
 
(Carolyn C. Cannuscio et al., “Housing Strain, Mortgage Foreclosure and Health in a Diverse Internet Sample,” Nursing Outlook 60.3 [2012]: 10.1016/j.outlook.2011. 08.004.)

This article has been republished with permission from The Family in America, a publication of The Howard Center. The Howard Center is a MercatorNet partner site.

Nicole M. King is the Managing Editor of The Howard Center’s quarterly journal, The Family in America: A Journal of Public Policy, the United States’ leading journal of family-policy research....