We were recently troubled by the findings of a research paper authored by Julia Isaacs of the Brookings Institute for the organization First Focus which was titled The Ongoing Impact of Foreclosures on Children. In the report, Ms. Isaacs quantified the number of children that have been impacted:
- 2.3 million children have already lost their homes to foreclosure
- 3 million additional children are at risk of losing their home
She also noted the four ways foreclosures may affect children negatively:
“First, and most obviously, families receiving foreclosure notices are much more likely to move than other families, and, … children who move frequently do less well in school.
Second, homeowners receiving a foreclosure notice are under a lot of financial and psychological stress, as they struggle to stay in their house, and if that fails, to find a new home quickly…parents under a lot of financial distress sometimes engage in harsher and less supportive parenting, which in turn can lead to negative behaviors on the part of children, making it harder for them to interact well with peers and in school.
Third, foreclosures and housing instability have a negative impact on physical as well as mental health, with studies finding higher rates of non-elective visits to emergency rooms and hospitals in ZIP codes with the highest foreclosure rates, as well as a strong association between housing instability and postponement of needed health care visits and necessary medications.
Finally, because foreclosures are often highly concentrated in certain neighborhoods, children living in or near foreclosed homes may suffer the consequences of living in neighborhoods with more vacant houses, higher crime rates, lower social cohesion, and a lower tax base.”
If you find that you are at risk of foreclosure, know your options. The new National Mortgage Settlement might give you a pathway to stay in your home.
You can get information on the opportunities the settlement offers here.
However, if you have exhausted all your options and now must decide between a short sale and foreclosure, analyze what is the best decision for you and your family. Tomorrow, we will discuss these choices.