Sunday, Feb. 07, 2010

Foreclosures wreaking havoc on psyche of countless people

MERCED — Three weeks ago, a retired telephone company worker named Ethelda Lopez watched as her dream retirement home was auctioned on the lawn outside the county courthouse in downtown Merced.

"When I heard my address, it was so disheartening," she said. For six months, she had made hundreds of calls to her mortgage company, federal officials, local political leaders — begging them all for lower payments or more time. No one paid heed.

Wracked with depression and anxiety, she was too ashamed to tell her friends that she was losing her stucco-and-stone ranch home in the Atwater countryside.

"I couldn't stop crying myself to sleep," said Lopez, 51. "When I started to try to tell my story, it would just come out as crying. I was too embarrassed, too depressed to go out anymore. ...

I would never wish this on anyone."

Lopez's story is one of two dozen gathered in a four-week investigation of the psychological and other health problems wreaked by the foreclosure crisis. Over and over, residents caught up in that crisis -- homeowners, renters, even Realtors — report they are suffering from stress or depression and are sometimes too ashamed to reach out for help.

This is the hidden human fallout from foreclosure. It is going largely untreated, even as county governments brace for more state cuts in mental health services.

Thousands of new homes, including Lopez's, sprouted from farmland throughout the region over the past five years. Merced, in particular, was gearing up for a bright future as a college hub. Optimistic developers dreamed of throngs of buyers paying $300,000 and more so they could raise their children in neat stucco homes in tranquil cul-de-sacs.

But the dream crumbled, and so did the peace of mind homeownership is supposed to guarantee.

Now, many homeowners are caught in a nightmare, trying to figure out how to pay mortgages on dwellings worth a fraction of what they owe — or whether they should give up the dream and move on.

About 50,000 Northern San Joaquin Valley homes have been lost to foreclosure since the housing crisis began 3½ years ago, according to ForeclosureRadar. That means about one in eight homeowners has been displaced, which makes the valley the nation's foreclosure epicenter.

Anxiety, sleeplessness

The drama plays out in front of courthouses in Modesto, Merced and Stockton every weekday, when investors and their real estate agents bid for foreclosed homes such as Lopez's.

What the statistics don't show is the human toll. Debt-wracked residents are suffering from anxiety, sleeplessness and depression.

Clinically, their suffering may not qualify as post- traumatic stress disorder, the psychological state felt by soldiers, police officers, first-responders and others after a traumatic experience.

Some residents have reached out for help.

At Merced-area health care clinics, workers report an increase in people experiencing mental distress and an increase in the seriousness of their symptoms. Many new patients are homeowners or renters fearful of losing their homes and all the stability a home provides, they say.

"We're seeing more people coming for crisis services, people who have never been in the system before," said Theresa Schoettler, who manages Merced County's inpatient psychiatric unit and walk-in clinic. "There's a lot more alcohol abuse."

Many feel so much shame about their financial and emotional distress that they shut themselves off, too fearful to ask for help, mental health workers report. Entire families suffer as stress radiates from debt-plagued parents to their frightened children, they say.