The National Council of La Raza (NCLR), the largest national Hispanic civil rights and advocacy organization in the U.S., and the University of North Carolina at Chapel Hill's Center for Community Capital have released ‘The Foreclosure Generation: The Long-Term Impact of the Housing Crisis on Latino Children and Families‘ – a study that uses interviews with Latino families who have suffered a foreclosure to shed light on the damage inflicted by the loss of their home.
‘An estimated 1.3 million Latino families will lose their homes to foreclosure between 2009 and 2012. This represents a shocking loss of wealth and a major blow to community stability,’ says Janet Murguia, NCLR's president and CEO. "This study brings to light the human and social costs of foreclosure and the urgent need for stronger government intervention to help homeowners, including those who are unemployed."
Job loss and jumps in mortgage payments were the most common triggers that led to default and foreclosure, the study finds. Families interviewed reported an average loss of $89,155 due to the foreclosure. The dramatic financial loss forced parents to pull back on plans to help their children pay for life expenses, such as college, a car or a home.
Despite having reached out for help to avoid their foreclosure, none of the families interviewed was offered a sustainable forbearance, workout, or loan modification from their financial institutions, NCLR says. The study also concludes that foreclosure caused parents, spouses and children to feel a "heavy emotional burden, including depression, increased anxiety, tension, and feelings of guilt and resentment."
"Our findings on the impact of home foreclosures on families are disturbing," says Robert Quercia, director of the Center for Community Capital. "Children, in particular, experience problems in school and are deeply affected by instability in the home."
Interviews for the study were conducted by five nonprofit community organizations that belong to the NCLR Homeownership Network and provide housing counseling to Latinos.
SOURCE: National Council of La Raza