Foreclosures Erode a Child’s Future, You Can Help Reclaim It

Foreclosure puts children at an educational disadvantage, as they may experience school transfers, interruptions in learning, and difficulty accessing resources and extracurricular activities. These challenges can lead to academic setbacks, lower graduation rates, and limited opportunities for higher education, and future opportunities as they lose familiar teachers, friends, and support networks.

Due to the financial strain, life disruptions, emotional distress, and instability it causes to children and their family, foreclosure is believed to increase the risk of juvenile delinquency, in particular property crimes (such as theft, vandalism, or burglary), substance abuse-related offenses, and offenses related to peer group involvement or gang activity.

Foreclosure often results in housing instability for children. After a foreclosure, the parent(s) are often unable to even rent a home, as their negative credit report is visible to landlords evaluating tenants. They may have to move to temporary or substandard housing, stay with relatives, or even experience homelessness.

Foreclosure results in a loss of community and social connections for children, isolating them from friends, neighbors, and community resources that provide a sense of belonging and support. This can result from having to change school districts, leaving their neighborhood, and even being shamed and intentionally socially isolated by their peers through bullying.

Foreclosure causes sadness, fear, and confusion in children, disrupting their sense of stability and leading to emotional distress that may manifest in behavioral changes, and an increased risk for various mental health disorders. Because foreclosure often involves housing instability and a breakdown of friend and social support networks, intense loneliness and isolation is often common.

Foreclosure is associated with multi-generational financial hardship, creating a systemic cycle of poverty and unhealthy debt to make ends meet on a daily basis, and never rising out of that cycle. Because foreclosures have a negative impact on the long term education of a child, it also is shown to limit their future earning potential.

The unstable living conditions that follow a foreclosure can expose children to unsafe environments, increasing their vulnerability to various forms of abuse. Foreclosures take a heavy toll on parents' mental health and contribute to heightened tension, conflict, and strained relationships. The increased stress within the household can escalate the risk of child abuse as parents or caregivers may struggle to cope, leading to potential maltreatment or neglect.

The stress and fear associated with foreclosure can trigger physiological responses in children, such as elevated cortisol levels and disrupted sleep patterns. The financial strain can limit their access to nutritious food, healthcare services, and a safe living environment. These combined factors can have long-lasting effects on a child's physical health, resulting in chronic illnesses, compromised immune function, and a higher risk of developing health conditions later in life.