Study of Medical Causes of Home Mortgage Foreclosures

Christopher T. Robertson of Harvard, Richard Egelhof , and Michael Hoke have co-authored Get Sick, Get Out: The Medical Causes of Home Mortgage Foreclosures, 18 Health-Matrix Journal of Law and Medicine.  Here's the abstract:

In recent years, there has been national alarm about the rising rate of home foreclosures, which now strike one in every 92 households in America and which contribute to even broader macroeconomic effects. The "standard account" of home foreclosure attributes this spike to loose lending practices, irresponsible borrowers, a flat real estate market, and rising interest rates. Based on our study of homeowners going through foreclosures in four states, we find that the standard account fails to represent the facts and thus makes a poor guide for policy. In contrast, we find that half of all foreclosures have medical causes, and we estimate that medical crises put 1.5 million Americans in jeopardy of losing their homes last year.

Half of all respondents (49%) indicated that their foreclosure was caused in part by a medical problem, including illness or injuries (32%), unmanageable medical bills (23%), lost work due to a medical problem (27%), or caring for sick family members (14%). We also examined objective indicia of medical disruptions in the previous two years, including those respondents paying more than $2,000 of medical bills out of pocket (37%), those losing two or more weeks of work because of injury or illness (30%), those currently disabled and unable to work (8%), and those who used their home equity to pay medical bills (13%). Altogether, seven in ten respondents (69%) reported at least one of these factors.

If these findings can be replicated in more comprehensive studies, they will suggest critical policy reforms. We lay out one approach, focusing on an insurance-model, which would help homeowners bridge temporary gaps caused by medical crises. We also present a legal proposal for staying foreclosure proceedings during verifiable medical crises, as a way to protect homeowners and to minimize the negative externalities of foreclosure.

Comments

[Ron Stone]

I was a mortgege loan officer until the banks had the government put us out of business my making us follow a different set of rules. During those years ( many of which were before the housing crash), I saw one family after another's credit (and chance of home ownership) destroyed by medical bills. People's homes are the current victim. What's next?

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Am I the only person who has put together that the current mortgage & foreclosures crisis that our WHOLE nation is seeing is the fault of the current administration bankruptcy reform?

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When the cause of a disease or class of diseases is known to be a single type of microorganism, use 01 without further subdivision for works about the type of microorganism

[Michigan Refinancing]

Maybe the healthcare bill that has recently passed will reduce the occurances of foreclosure from health issues.

The currrent issue is the record number of strategic defaults.

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[John Beck Tele Seminar]

A legal proposal for staying foreclosure proceedings during verifiable medical crises, as a way to protect homeowners and to minimize the negative externalities of foreclosure.