Broken Homes, Broken Dreams: Families in (and out of) Foreclosure
What is known about the impact of foreclosures on families and individuals has been learned through the analysis of large databases and influenced a public policy response that has produced mixed results for those experiencing foreclosure. Although quantitative data clearly demonstrate that foreclosures affect large numbers of people and have a disproportionate impact on people of color, there are many gaps in knowledge about factors that came into play during the foreclosure process. We know little about why lenders originate those loans and what factors came into play during foreclosure. We also know little about how individuals and families experience foreclosures, their housing trajectories after foreclosure, how they have fared, and what social workers can do to help them cope with their experiences. Social workers can play key roles in mitigating the effects of foreclosure, but they require knowledge of and training in housing issues.
This study examines the reasons for foreclosure and the effects of foreclosures on families. Through case studies constructed from data compiled during qualitative interviews, it provides context for relevant qualitative results by examining the experiences of more than 40 families that faced foreclosure. Data also come from interviews with service providers and community members who work with families undergoing foreclosure. We selected cases to elucidate disparities by race, income, and location. This study explores (1) families’ housing trajectories; (2) how they obtained their mortgages; (3) the resources, including social networks, they call upon in dealing with their foreclosure experience; (4) efforts made to prevent the foreclosure; (5) where families went after foreclosure; (6) the meaning and impact of foreclosure and the housing instability for respondents, their families, and children; and (7) points of possible intervention for social workers, legal assistance, and housing counselors.
The results of this study provide a complex picture of families during and after foreclosure. Public policies that affect families in different parts of the foreclosure process include counseling; mediation; and notice for families in foreclosure, loan modification, and rental assistance programs. We find that social workers can play a pivotal role in helping families navigate the maze of needed services. Many families indicate that unemployment, foreclosure, and other public assistance needs are new experiences. Additionally, this study finds that social workers are needed to assist families as they work through an imperfect system with bank lenders and servicers. Recognizing that families’ experiences differ by race and income and determining the best course of action will require persuasive data, strong voices, and innovative policy solutions.
Conclusions and Implications
Understanding the impact of foreclosures on families is critical to developing appropriate responses that helping families recover. This study offers an in-depth look into household experiences with foreclosure and offers important implications for social work practice and policy. The results suggest that social workers are needed to support families obtaining social services during and after experiencing a foreclosure. The results also indicate that social policy should take into account the varying foreclosure experiences for underserved populations.