Foreclosure Process Takes Toll on Physical, Mental Health

    • October 21, 2011

The nation's housing crisis, it turns out, is also a major public health crisis.

People who lose their homes lose more than just the roofs over their heads. They lose economic stability, social ties and, for many, mental and physical health, according to a series of studies by Robert Wood Johnson Foundation (RWJF) scholars. Some may even lose their lives.

Homeowners over age 50 who fell behind on their mortgages between 2006 and 2008 were much more likely to report symptoms of major depression, according to a new study written by a number of Foundation-supported scholars. Mortgage-delinquent homeowners were also more likely to lack a sufficient supply of food in their pantries and to go without prescribed medications for financial reasons.

"This is clearly reflecting the juggling that people are doing to make mortgage payments," says Dawn Alley, PhD, an alumna of the RWJF Health & Society Scholars program (2006-2008) and the lead author of the paper, which was published online on Oct. 20 by the American Journal of Public Health. "These short-term changes are likely to have long-term health consequences for families facing foreclosure."

The study is the first to examine the effects of foreclosure over a period of time. It builds on other studies by RWJF and other scholars that explore the link between foreclosure and health.

Health & Society Scholars program alumna Carolyn Cannuscio, ScD, ScM, (2005-2007), who is a co-author on Alley's study, also published a paper earlier this month in Nursing Outlook that found that homeowners in default or foreclosure had poorer mental health and more physical symptoms than renters and other homeowners. She and her co-authors—who include Alley, among other RWFJ scholars—found that distressed homeowners are an identifiable group that is responsive to survey queries sent by email about health and finances.

Contacting distressed homeowners by email is economical, efficient and may be preferable to contact via telephone which, the authors note, is often the means of communication used by debt collectors.

In addition, Craig Pollack, MD, an RWJF Clinical Scholar alumnus (2006-2009) and a co-author of Alley's study, and Julia Lynch, PhD, recipient of a 2006 Investigator Award in Health Policy Research and an alumnus of the RWJF Scholars in Health Policy Research program (2003-2005), have conducted a series of studies exploring the link between health and foreclosure. In the first, they found that homeowners in foreclosure were more likely to skip doctor visits or skip medications for financial reasons. More than a third of the homeowners studied also reported symptoms of major depression.

In another, they found that homeowners undergoing foreclosure use the health care system in different ways than peers in more stable housing. Homeowners were more likely to have an emergency department visit and more likely to not show up for a scheduled doctor’s visit in the two years leading up to foreclosure.

And in yet another study, Pollack and Lynch teamed up with Alley and others and found that mortgage counselors frequently encountered clients with major health concerns but that they could not respond appropriately because they lacked training.

Pollack and Lynch Warn: 'Foreclosures are Killing Us'

Pollack and Lynch wrote about their findings in a recent op-ed in the New York Times titled Foreclosures Are Killing Us. Foreclosure is not just a financial problem, they argue. It is a social problem that has huge health implications for homeowners and members of their families and communities. Lynch and Pollack have not yet studied the effects of foreclosure on the health of children but hypothesize that children are suffering from spending cuts on food and health care as well as disruption to education, which is one of the best predictors of future health.

Foreclosure is linked to a number of other intense stressors, Lynch says. "An awful lot of people in this country right now are subject to a huge amount of stress. Foreclosure is wrapped together for many people with a horrible, messy combination of job loss, ill health, uninsurance or underinsurance, and debt. When you put those things together, people are subject to really intense stress, which is likely to lead to depression and other health problems."

The problem is likely to worsen as unemployment rates remain stubbornly high and as economic recovery stagnates.

Foreclosure rates began to rise after 2003 thanks to a jump in subprime lending practices. By 2009, 2.2 percent of all homes in the United States—or nearly 3 million properties—were in some stage of mortgage foreclosure, according to Alley. Now, after slowing down in the first half of 2011, the rate of homes entering foreclosure is rising again, Lynch and Pollack note in their New York Times op-ed. The rate of first-time default notices jumped 33 percent from July to August, and at the end of September, a federal program to help unemployed and underemployed homeowners came to an end, they write.

Yet homeowners facing health crises have few places to turn, the scholars say. Mortgage counselors have become de facto crisis counselors, even though they lack the training to respond to clients who report health problems, depression or suicidal tendencies. Treating depression in unemployed people is critical, Alley adds, because people who are depressed take longer to find jobs. Treating depression can improve people's chances of finding employment and may help them manage the daunting financial planning work that foreclosure prevention programs require, Lynch and Pollack note in the op-ed.

Fortunately, policy solutions are available, the scholars say.

To start, homeowners in default are an easily identifiable high-risk group that can be targeted with interventions. Mortgage counselors, for example, could be trained to screen people for depression and other health problems and refer them to support providers. "Here we have people who are asking for help related to their mortgage, and we could use that as an opportunity to also assess for needs in other areas," Alley says.

Another opportunity to address homeowner health problems is during the mediation process between lenders and distressed homeowners and during negotiations with the financial services industry over mortgage fraud and abuse.

There are limitations to these solutions, however. Most people in default are not enrolled in federally funded default prevention programs. And state and federal lawmakers are tightening the budget reins as a result of the recent recession and therefore may be reluctant to set aside money for additional training for already over-burdened mortgage counselors.

"We realize state and federal budgets are tight at this time," Pollack says. "We hope lawmakers view these types of supportive initiatives for homeowners in distress as a priority. With these settlements ongoing, we really think it's important to think of the full cost of the crisis, which includes health costs."

Training mortgage counselors would be worth the relatively small investment it would require, Alley adds. Mortgage counselors trained in health triage could make referrals so homeowners in foreclosure could access treatment and support services in a cost-effective way. "There's a whole variety of things that can be done," she says. "The critical first step is recognizing the role that health plays here."

Additional co-authors on Alley's study, "Mortgage delinquency and changes in access to health resources and depressive symptoms in a nationally representative cohort of Americans older than 50 years," published on October 20 in American Journal of Public Health, include: Jose Pagan, PhD, a recipient of an RWJF Investigator Award in Health Policy Research (2006) and an alumnus and current National Advisory Committee member of the RWJF Health & Society Scholars program (2003-2005); Jennifer Lloyd, MA; and Michelle Shardell, PhD.

Additional co-authors on Cannuscio's study, "Housing strain, mortgage foreclosure, and health," published in Nursing Outlook on October 14, include: Pagan; Shardell; Beth Soldo, PhD; David Asch, MD, MBA, program site director of the RWJF Health & Society Scholars program at the University of Pennsylvania; and Terri Lipman, PhD, CRNP, FAAN.