From the University of Pennsylvania School of Medicine comes this less than surprising finding: Foreclosure is depressing- really depressing. [Thanks L!]
WASHINGTON (AFP) – More than a third of US homeowners in foreclosure show signs of serious depression, according to a medical study published Tuesday, highlighting the crisis’ hidden impact on public health.
"The foreclosure crisis is also a health crisis," said lead author Craig Pollack, a professor at the University of Pennsylvania. "We need to do more to ensure that if people lose their homes, they don’t also lose their health."
Nearly half of a group of 250 people in Philadelphia whose homes were in foreclosure reported depressive symptoms, and 37 percent "met screening criteria for major depression; according a study by the University of Pennsylvania School of Medicine.
The research was published online this week in the American Journal of Public Health.
I thought that 37% seemed something similar to another report I read recently, so I dug it up. According to the latest FHFA report on Fannie and Freddie’s foreclosure prevention efforts:
- Delinquencies continued to increase as approximately 80,100 more loans became 60 days or more delinquent in May. Loans 60-plus-days delinquent increased approximately 7 percent in May to 1.3 million.
- Curtailment of income continues to be the largest reason for delinquency, growing from 34 percent in January to 40 percent in May.
Maybe it’s just coincidence, but it appears that the percentage of people who are suffering from severe depression and the percentage of people who are at risk of foreclosure due to loss of income are very similar.
There are other possibilities I suppose. L speculated:
I guess all that jubilation people experienced from buying a overpriced house they never could afford, or after refinancing the house they had and extracting all that cash to buy new cars and boats, vacations and other toys had to take its toll when the bill came due.
Of course, they might find that a lot more people that are not going through foreclosure are feeling depressed too. Perhaps those that pay attention to the bailouts and economic "news"?
I’m wondering if there may be a silver lining to a surge of clinical depression in the US. If the stages of grief are denial, anger, depression, exploration and acceptance…then depression is a necessary and constructive stage so long as people experiencing it have some relationships and other support to help them through.
As has been discussed in many ways on this blog, our entire culture has been in deep denial regarding the fundamental value of things versus the allure of fast money for doing nothing.
On the other side of this recovery cycle I continue to hope for housing affordability for the middle class. This is a good and not a bad thing, regardless of the pain we have to experience along the way to getting there.
I think its more withdrawal from the credit addiction than depression. We will have a new disability as soon as the Government figures out what to call it. Then the drug companies can get to work finding a pill to relieve the stress…… Prozac for poverty?
The depression med prescriptions are way up, I guess that Prozac makes you kind of zombie like, which probably means it’s working as it should.
Foreclosure can’t be all that depressing when you find out that you actually have money again, but not when the bankster garnishes your paycheck looking for some payback.
I guess all that jubilation people experienced… had to take its toll when the bill came due.–L
False prosperity is eventually beaten down by the iron rod of economic law. The resultant disillusionment sows seeds of political unrest.
Politicians respond by ginning up the economy with hot money, which fuels another boom, but politically inspired credit expansion produces capital misallocation. This short circuits the boom and the false prosperity is once more beaten down by the iron rod of economic law.
The way out of this squirrel cage can only come about by a return to honest money. Hint: gold is your friend.
Here’s an interesting article on the illusion of prosperity:
The Rise and Fall of Artificial Wealth
It offers a good statement of the problem, but I’m not sure I agree with the authors’ solution:
“In the short-term, Americans would have more ability to spend money if the Government would pass a bill that would give homeowners the opportunity to convert their current mortgages to interest-only for some duration of time, e.g. one, two, or three years. This could put several hundred dollars of disposable income back into the hands of consumers every month during the duration of the program. For example, for a $300,000 mortgage with a 5.5% interest rate, the total fully-amortized monthly payment would be $1,703 of which $328 is principal and $1,375 is interest in the first month. By allowing this borrower to pay interest only, the borrowers monthly payments would be reduced by $328 (or $3,396 per year) during the duration of the interest-only program. This would be a virtually no-cost government stimulus.”
After all, didn’t interest-only mortgages help get us into this mess?
malthus -
Money is a social contract. We haven’t worked out the unwritten fine print in that contract is all.
Au is merely the royal road to As and CN- contamination in what you and our kids will be drinking next month. That barbaric relic is just a distraction.
Every serious economic downturn has health consequences. Years ago, a researcher from John Hopkins studied the 1973 US recession. He concluded that there were about 60,000 ‘excess deaths’ due to the downturn. A number of these deaths had to do with people postponing health care, suicide, depression, etc.
I remember he called the 60k number ‘about the size of a colonial war’.
The shrink in population leads to a lot of incorrect statistics. Many economists, when they construct their ‘population growth’ models, use ‘housing starts’ as one of their major indicators.
This has lead to some serious overshoots in construction of retail, schools, as well as housing.
Hardly any economist (especially at the state planning level) seems to take this contraction effect into account.
Oh yeah… one other thing. In Japan, Soviet Russia, and Argentina…. the populations dipped due to health issues related to their various economic blow-ups. Lots of suicides, lots of drinking.
twist – careful. You start giving them ideas and the next thing you know, the gov’t will swap it around and blame people being depressed for the foreclosure rate. The only fix for that, obviously, is to completely redo the healthcare system and require everyone in country to take anti-depressants – funded by higher taxes, of course.
Money is a social contract.–John M.
No, money is a medium of exchange.
That barbaric relic is just a distraction.–John M.
No, it is the main show, of which the present commodities market is just the preview. Get your ticket now before you have to pay scalper’s prices.