Unnoticed Medical Causes Behind Foreclosure Crisis

October 20th, 2008 | Tags: Foreclosure Crisis

The last two years have seen alarm bells ringing about the increase in foreclosure numbers. One out of 92 houses in America have slipped into foreclosure. This is telling on all corners of the socio-economic field of the nation. Hunting for causes the accusing finger has pointed to irresponsible and unregulated lending, gullible borrowers, jumpy real estate market and increase in interest rate. These have been bracketed as the standard causes for the foreclosure crisis.

But many will be taken by surprise to note that one of the most important and biggest causes for house foreclosures is a medical crisis. The medical fraternity studied in four states the borrowers who were going through foreclosures to discover that the medical causes were directly responsible for putting the houses of 1.5 million citizens at risk from losing their houses each year.

Of the respondents 49% showed that they fell into foreclosure because of medical problems. 32% complained of illness or injuries, 23% had to struggle with rising medical bills, 27% said that they lost their job due to illness and 14% said they succumbed to foreclosure because their time and energy as well as finances were taken up by caring for sick family members.

Further scrutiny showed 37% had to pay over $2,000 medical bills from their own pockets, 30% lost a couple of weeks in work because of temporary illness, 8% were laid low by disability or inability to work, and 13% ate up their equity meeting medical expenses. The total findings indicated that 7 out of 10 of the respondents were medically stressed either just before or during the foreclosure years.

This very important angle of the foreclosure crisis is missing from the standard accounts being presented. It may well be said that these medical causes led up to the foreclosure tragedy rather than vice versa.

It is further explained however that the results are not final but preliminary because of limitations in the methods used. But it is a pointer and needs further research. Medical debt launches a two-pronged attack – the illness itself and the worry and reality of financial loss. It sets off a chain reaction.

With the socio-economic fabric collapsing the underlying factor is that at all costs foreclosures must be stopped. Defaults must not be allowed. Support has to be given. For this a national health programme is of imperative importance as a direct remedial measure for foreclosure ailments.