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THE FORECLOSURE CRISIS
For children, a repossessed house—whether rented or bought—is destabilizing.
The impact of foreclosures on children around the country has been enormous. One-
third of the children who experienced homelessness after the financial crisis did so
because of foreclosures of the housing that their parents owned or were renting, ac-
cording to a recent study. One school official in Nevada told the Commission about
the significant challenges to the educational system created by the economic crisis.
All around, the demand from people who need help is outstripping community
resources. Coast to coast, communities are trying to stretch housing aid budgets to
help people displaced by foreclosures. In Nevada, for example, Clark County, which
contains . million people living in and around Las Vegas, was forced to cut its Fi-
nancial Housing Assistance program, despite the clear needs in the community. Gail
Burks, the president and chief executive of the Nevada Fair Housing Center, told the
Commission that her group finds that many they counsel through the foreclosure
process are in despair. “It’s very stressful. There are times that the couples we are
helping end up divorcing, sometimes before the process is over. . . . We’ve also seen
threats of suicide.”
And the stories continue. Karen Mann, the appraiser from Discovery Bay, Cali-
fornia, testified to the Commission about her family’s circumstances. Her daughter
and son-in-law refinanced their mortgage into an adjustable-rate mortgage. When
the time came for the rate to adjust upward, new financial troubles made the pay-
ments more than the family could afford. Because the market value of the home was
nearly equal to their mortgage debt, the family’s attempts to get the mortgage modi-
fied were fruitless. They lined up a buyer for a short sale, but the deal was nixed.
Then, when medical problems created yet another challenge, the couple and their
four children moved in with Mann. “The children were relocated to new schools,
and the adults dealt with the pain and emotional suffering while they were trying to
rebuild their lives,” Mann said. The couple filed for bankruptcy. Two months after
the bankruptcy was completed, the lender asked them if they wanted to modify
their mortgage.
In Cape Coral, Florida, Dawn Hunt and her husband, a mailman, and their two
children live in an attractive ranch-style home they bought for about , more
than a decade ago. It was a quiet, -year-old subdivision where most of the residents
were homeowners. In and , builders rushed to the area and threw up
dozens of new homes on empty lots. Homebuilder Comfort Homes of Florida LLC
broke ground for a house across the street from the Hunts, but did not complete it.
This fall, the house sat vacant, an empty shell. No stucco was ever applied to the con-
crete block exterior, and the house had no interior walls. A wasp nest decorated the
electrical box near the front door. The untended grass had grown four feet high.
Sharp sand spurs in the brush made it difficult to approach the property. Two doors
down from the Hunts, another house was also vacant, left empty when a family split
up and moved a year earlier. They abandoned a car in the garage. The roof leaked,
and a blue plastic tarp put in place to keep the rain out now flaps in the breeze. The
Hunts called the police after vandals broke into the house one night; intruders have
been back twice more in the daylight. 
