The Hidden Mental Health Toll of Foreclosure: What Housing Professionals Need to Know

May 22nd, 2024

Foreclosure can be a devastating experience, impacting homeowners not just financially but also emotionally and psychologically. As a housing professional, recognizing the mental health challenges your clients may face is crucial.

By acting with empathy and connecting clients with appropriate resources, you can help them navigate this difficult process. This blog post explores the common mental health effects of foreclosure, offers insights from expert research, and provides national and state-specific support resources.

What is the psychological impact of losing a home?

Research done since the foreclosure crisis of the Great Recession shows losing a home through foreclosure can be a mentally traumatizing event that leaves people with a profound sense of loss. This form of housing instability can lead to serious depression and health problems that may risk lives.

According to a report by The Urban Institute, foreclosure often brings feelings of grief, shame, personal failure, and a lost sense of security and stability.

The stress of foreclosure can also lead homeowners to experience a sense of powerlessness and a loss of control over their lives, especially since foreclosure can make it difficult to find new housing. This loss of autonomy that homeownership provides can be most difficult for those who have always prided themselves on being self-sufficient and responsible.

Foreclosure Can Lead to Increased Risk of Depression and Anxiety

Research has shown that being in foreclosure can lead to high rates of depression, anxiety and other mental health challenges. A meta-analysis conducted in 2015 of 35 studies about foreclosure, health and mental health found that 91% of studies concluded that foreclosure had adverse effects on health or mental health.   

The chronic stress of the foreclosure process can take a heavy toll, wearing down a person's psychological resilience. According to experts, foreclosure-related depression and anxiety can manifest in symptoms like persistent sadness, hopelessness, fatigue, difficulty concentrating, and changes in sleep and appetite. In severe cases, the mental distress of foreclosure has even been linked to an increased risk of suicide.

There are negative health effects of foreclosure as well, and homeowners often don’t have the time or financial resources to address them. Research shows an increased risk of developing or exacerbating heart disease, diabetes, high blood pressure and other health issues, like obesity. People in foreclosure might experience chest pains and stomach cramps and end up in emergency rooms for both their physical and mental health issues.

These health issues could have the cyclical effect of exacerbating  depressive symptoms, which in turn could lead to poorer health. All this may have negative effects on relationships, leading to more difficulties.

Strained Relationships and Social Isolation

The immense stress of foreclosure often leads to increased tensions and conflicts within relationships, affecting spouses, children and others. Losing a home not only strains marriages but also bewilders and frightens children. Many homeowners also may withdraw and self-isolate out of embarrassment and a desire to hide their financial hardship.

This social isolation can compound feelings of depression and hopelessness. The stigma surrounding foreclosure can make people feel judged or looked down upon by others, leading them to pull away from social connections when they need them the most. Relationship strain and social withdrawal can create a vicious cycle, as lack of family and social support is a known risk factor for mental health issues.

Assisting Clients in Foreclosure Experiencing Mental Health Challenges

Though you’re not a mental health professional, your support can help destigmatize foreclosure and frame these negative feelings as a natural response to a difficult situation.

The National REO Brokers Association (NRBA) compiled several mental health management strategies for those facing foreclosure:

  1. Reach out for professional support: Mental health professionals, such as therapists or counselors who help individuals and families cope with foreclosure-related stress, can provide valuable guidance and support. They can help your clients acknowledge and process difficult emotions and develop coping mechanisms to work through those complex emotions they may be experiencing.
  2. Connect with others in similar situations: Joining a support group for homeowners facing foreclosure can provide a sense of community and understanding. Clients sharing their experiences and learning from others who have gone through similar challenges can help them feel less alone and more empowered.
  3. Foster open communication with loved ones: Suggest your clients be transparent with their family members about their situation and feelings, if possible. Openly discussing their concerns and leaning on one another for support can help ease household stress and promote a more supportive environment.
  4. Balance present challenges with future goals: While it's important to address the immediate issues related to foreclosure, encourage your clients not to lose sight of their long-term objectives. Suggest they set realistic goals for the future and create a plan to work towards them. Helping them focus on the possibilities ahead can provide a sense of purpose and motivation.
  5. Engage in self-care activities: Tell clients how important it is to make time for practices that promote physical and mental well-being, such as regular exercise, healthy eating habits and getting enough sleep. Engaging in hobbies or activities that bring them joy and relaxation can also help improve their overall mood and health. Recommend community resources in your area that can help support this goal.

Remind clients that seeking professional help is a sign of strength, not weakness, and taking care of their mental health is as important as navigating the practical aspects of foreclosure.

Finding Mental Health Support in SUN States

There are national resources like the Substance Abuse and Mental Health Services Administration, the National Alliance on Mental Illness (NAMI) Helpline, and the 988 Suicide & Crisis Lifeline that you can recommend to your clients. Most states offer some government support or community resources for those experiencing mental health challenges. Here is where you can get that help in the states that SUN serves.

The State of Connecticut offers mental health services for residents in crisis or in need of ongoing medical help. The state provides resources for residents looking for crisis line, housing, inpatient care or addiction recovery. Learn more about Connecticut’s mental health services.

Delaware Health and Social Services (DHSS) through its Division of Substance Abuse and Mental Health provides a variety of services to residents to help them address mental health issues. Discover Delaware’s mental health support through DHSS.

The Illinois Department of Human Services (IDHS) provides access to mental health resources for families in Illinois. Explore IDHS mental health resources.

The Maryland Department of Health Behavioral Health Administration has a system of walk-in and urgent care centers that provide addiction and recovery support and other mental health support to individuals and families. Find out more about Maryland’s Behavioral Health Administration services.

The Massachusetts Department of Mental Health provides access to services and supports to meet the mental health needs of individuals of all ages. Learn more about Massachusetts Department of Mental Health offerings.

Residents of Michigan can find a wide variety of mental health services on the state's Health & Human Services site. They help adults who have a mental illness, among other demographics. Get more information on Michigan’s Health and Human Services support.

The State of New Jersey Department of Human Resources through its Division of Mental Health and Addiction Services provides a wide variety of services and resources to the state's residents. Their full array of services cover residents of all ages who are confronting mental health issues. Learn more about New Jersey’s Division of Mental Health and Addiction Services.

The Ohio Department of Mental Health and Addiction Services (OhioMHAS) is the central portal to find help with mental health challenges. They are ready to connect clients to the services and resources that they need to support prevention, treatment, and recovery. Connect with OhioMHAS for mental health support services.

The Pennsylvania Office of Mental Health and Substance Abuse Services (OMHSAS) is where residents start to find the mental health resources they need. There, residents can find the county or local provider agencies under contract with the county to provide services. Explore Pennsylvania OMHSAS resources.

Residents may find mental health assistance at its Department of Behavioral Healthcare, Developmental Disabilities & Hospitals (BHDDH). The state offers mental health advocacy, therapy referrals and interfaith counseling, among its services. Visit BHDDH’s website to learn more about their mental health resources.

The Wisconsin Department of Health Services provides the state's residents with mental health support. It supervises the 72 counties responsible for delivering services and providing for the well-being, treatment and care of individuals living with mental health concerns. They often do this in partnership with community-based agencies and organizations. Discover Wisconsin Department of Health Services mental health resources.

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