Medical Reasons Behind Foreclosure of Houses That Are Homes

November 18th, 2008 | Tags: Foreclosure House

A good section of the medical fraternity feels there are medical reasons behind the escalating foreclosure of houses that are homes. Today one out of 92 houses approximately are in foreclosure across America. This has caused a national alarm and everyone from pundits to politicians is scrambling for causes. Without pinpointing the reason no remedy will be possible. The standard explanations given for foreclosures are predatory lending, gullible naïve borrowers, falling real estate market and increasing interest rates.

Many policy makers and experts should be surprised that even in the middle of this storm, one of the main reasons for foreclosure is not one of the above mentioned causes. Studies have been made in four states on house owners under facing foreclosures. The conclusion was that in half the cases medical problems have led to foreclosures. From this if a parallel can be drawn with the national scene then it can be said that medical reasons have pushed a staggering number of 1.5 million Americans into the foreclosure zone annually recently.

About half – 49% - of those surveyed said that they defaulted in mortgage payments because of illness and or injuries (32%), medical bills beyond their means (23%) and loss of job due to physical ailments. 14% complained that they had to look after sick members of the family and this led to lowering of income and subsequently foreclosure.

Studies were made of medically caused interruptions in the last two years. 37% said that they had to honour medical bills over $2,000 from their own pockets. 30% were jobless for over two or three weeks because of illness or injury. 13% paid their medical dues by dipping into home equity. 8% were either disabled or unable to work for the time being. Seven of the ten respondents said they reported a medical cause for foreclosure or suffered a similar cause before the onset of foreclosure.

Taken together these results show that the typical reasons for foreclosure that are citied generally are missing. It is obvious that foreclosures are not merely caused by toxic loans, bad properties or foolish borrowers. Rather a good chunk of the foreclosures are because of sudden medical interruptions that have an impact on the budget of families.

Those who conducted the study however clarify their conclusions by saying that because of limitations in methodology the findings are limited and not comprehensive.