Foreclosure can be devastating, causing losses far greater than the family home. In fact, foreclosure affects all aspects of our lives-including our mental, physical, financial, emotional, and even spiritual well-being. Naturally, those facing foreclosure are directly impacted, but the effects of foreclosure into the homes, lives, and businesses of everyone throughout the community.
Eventually, even those who aren’t facing foreclosure will experience the negative effects in their lives, neighborhoods, and businesses. With today’s high foreclosure rates, the rising loss of homes will impact all of us in at least one of the following eight ways.
1) Foreclosures affect neighborhood stability, jobs, local business, service-related business, crime, and property values.
When homeowners lose their homes, their families are displaced, causing multiple problems in the neighborhood. Vacant and/or abandoned properties become a blight upon otherwise well-kept neighborhoods. Even upscale communities are not immune to the negative impact of foreclosure, as once manicured lawns become overgrown and weed infested, and a lack of routine maintenance creates an eyesore to other residents and would-be buyers, while driving down property values of homes in the near vicinity.
These properties are also appealing to criminals. Vacant properties can become hangouts for criminals and gang activity and are inviting to thieves, who sometimes dismantle these homes piece by piece, taking light fixtures, appliances, and copper pipes. Eventually, the damage and loss can make repairs more costly than the value of the home, deeming it unsellable to a permanent homeowner.
In addition, communities lose much-needed jobs to foreclosure. Businesses need homeowners and residents to survive, and each foreclosure results in a decline in customers. This also applies to service-related businesses and jobs. With each foreclosure is a loss of property or real estate tax-funds which support libraries, schools, parks, medical care, and support services for the residents in the community. The loss of jobs and social and support services lowers property values and results in neighborhood instability as homeowners relocate to other communities. In fact, some cities have had to file bankruptcy in response to the loss of revenue resulting from foreclosures.
Each of these has the potential to affect all of the residents of a neighborhood or community, and they all result in lower property values, higher crime rates, higher unemployment, and a decline in neighborhood services, safety and appeal.
2) Foreclosure affects our youth. Adults aren’t the only ones who suffer from foreclosure. Children are especially vulnerable to its effects. Not only does it increase their stress levels as they wonder about the uncertainty of their family’s future, but they are also affected by the stress their parents face. Foreclosure is emotionally devastating, and the worry and anxiety parents experience greatly impacts their children. Along with the loss of their home, stability, and childhood friends, they usually experience a change in schools and lifestyle. Extracurricular activities are often no longer possible. Some older children will seek part-time employment in order to assist their family, leaving less time for studies or the pursuit of other interests. Those who are displaced become homeless or move into less desirable neighborhoods, resulting in fear, loneliness, and anxiety.
Children who are victims of foreclosure have also been found to have less confidence. Their self- esteem is directly affected and they are more likely to exhibit behavioral problems, have health-related issues, and experience a drop in grades or interest in school, sports, and making friends. The trauma is further exacerbated when these children leave behind their belongings or pets, leaving them with little or nothing of their former lives.