In the wake of the housing market collapse, a high foreclosure rate plagued the country as a number of borrowers defaulted on their mortgages. However, while these consumers gained the most notoriety for their financial hardship, there were a number of other hidden effects of the foreclosure crisis, MarketWatch reports.
Since 2007, more than 5 million occurred throughout the housing market with an additional 3 million to 5 million expected in the coming years, according to data from the Center for Responsible Lending. While much of the fallout as a result of the high rate of foreclosures was obvious, here are some other consequences of the crisis.
The effect on children
By the time the foreclosure rate peaks, industry experts anticipate an estimated 8 million children to be affected in one way or another. This includes both the children of borrowers who directly experience foreclosure and children of renters who are evicted as the result of a home repossession.
It's believed the overall health, development and educational performance of these 'invisible victims' are damaged from the foreclosure process. Specifically, a report from First Focus claims that a child enduring a foreclosure has the same effect on their math and reading skills as missing an entire month of school.
Overall health and well-being
Meanwhile, not only does the health of children suffer from a foreclosure, but adults are also vulnerable. Studies have revealed that there are a number of parallels that can be drawn between an individual who has their home repossessed and visits to the doctor for mental health, preventable conditions and other stress-induced issues.
Researchers from Princeton University and Georgia State University found that areas with high rates of foreclosure often have a larger number of emergency room visits for heart attacks, strokes and hypertension. Estimates show that the 2.82 million foreclosures that occurred in 2009 resulted in approximately 4.18 million ER visits.
Impact on local law enforcement
Communities with a large number of foreclosed houses can suffer because there is no one occupying these properties paying property taxes. While law enforcement is often one of the last services to face budget cuts in most states, some areas have had to resort to this. This is troubling since vacant homes can attract criminal activity, such as squatting and burglary.
