Foreclosure ripple effect: 8.3 million children in jeopardy

4 days

ago

By Allison Linn

When we think of foreclosure, we tend to think of the tremendous financial toll it takes on adults.

But a new report sheds light on the millions of children who are having their lives thrown into disarray by the crisis as well.

The analysis of foreclosure data, prepared for the children’s advocacy group First Focus, finds that as many as 2.3 million children have lost their homes to foreclosure. In addition, the report finds, another 3 million are at risk being displaced from their homes due to foreclosure.

The researchers also say that an additional 3 million kids could be affected by foreclosure because they live in a rental home that is either in foreclosure or at risk of being foreclosed upon.

That means more than 8 million children are either affected or at risk.

Julia B. Isaacs, a senior fellow with the Urban Institute and the author of the report, said a foreclosure can hurt children in several ways.

• When a school-age kid has to move unexpectedly, it often means that they must switch schools mid-year. 

• Isaacs said other research has shown that kids who switch schools have lower levels of math and reading achievement, even after controlling for other factors such as poverty.

• Such moves also are associated with higher rates of kids dropping out of high school, and such a big upheaval can be difficult socially for children.

• The parents’ financial stress also can impact the kids. Isaacs said research dating all the way back to the Great Depression showed that when parents are under great financial stress they may be less supportive parents. That, in turn, can lead to social and behavior problems.

• “This affects how parents interact with each other and how they interact with their children,” she said.

Isaacs’ analysis used Census data on living arrangements of families combined with estimates of foreclosures by state to come up with the estimates.