A retired telephone company worker named Ethelda Lopez recently
watched as her dream retirement home was auctioned off on the lawn
outside a county courthouse in downtown Merced.
A retired telephone company worker named Ethelda Lopez recently watched as her dream retirement home was auctioned off on the lawn outside a county courthouse in downtown Merced.
“When I heard my address, it was so disheartening,” she said. “It’s amazing how it all works.”
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 sprawling 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. It’s very trying. I would never wish this on anyone.”
Merced County ranked first in California for foreclosure filings in 2009, and sixth among counties nationwide, the national firm RealtyTrac reported recently. One in seven homes in this county of 250,000 people has been foreclosed on since September 2006, according to Foreclosure Radar, a California reporting service.
Ethelda Lopez’s story is one of two dozen gathered by the Merced Sun-Star 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 that they are suffering from stress or depression and are sometimes too ashamed to reach out for help.
This is the hidden human fallout of foreclosure. It is going largely untreated, even as many counties braces for more state cuts in mental health services.
The human toll
Thousands of new homes like Ethelda Lopez’s sprouted from farmland countywide in the past five years. Merced was gearing up for a bright new future as a college hub. Optimistic developers dreamt of throngs of buyers paying $300,000 and more so that they could raise their children in neat stucco homes along tranquil cul-de-sacs.
But the dream crumbled, and so did the peace-of-mind that home ownership is supposed to guarantee.
Now, many homeowners are caught up 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.
The drama plays out on the courthouse lawn like clockwork, Monday through Friday, at 12:30 and 3 p.m., when Realtors and investors bid for foreclosed homes like Ethelda Lopez’s. The crisis shows no signs of abating. In November, one in five Merced County homeowners was 90 days or more delinquent in payments, according to another service, First American CoreLogic.
What the statistics don’t show is the human toll. Debt-wracked residents are suffering from anxiety, sleeplessness and depression in a universe gone sideways. Clinically, their suffering may not qualify as PTSD, the psychological state felt by soldiers, cops, first-responders and others after a traumatic experience. But far too many are in sad shape.
At Merced-area health care clinics, workers report an increase in residents experiencing mental distress, and in the seriousness of their symptoms. Many new patients are homeowners or renters fearful of losing their homes and all the stability that 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 in-patient psychiatric unit and walk-in clinic. “A lot of people are self-medicating. There’s a lot more alcohol abuse. A lot more despair. Some people say they can’t live anymore.”
Many more 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.
“The trickle-down of this is big. Kids have stomach aches. They don’t want to go to school. Then you find out they’ve just moved in with someone else, their parents are about to lose their homes, they’re having trouble paying the mortgage,” said Elizabeth Morrison, clinical director of behavioral health at Golden Valley Health Centers, a network of 25 nonprofit community clinics and eight dental sites serving the Merced area.
School leaders are concerned, too. In the Merced Union High School District, which covers students in all of Merced, Atwater and Livingston, 613 students, or 7 percent, reported this year that they were “doubled-up” with another family in a single-family home. At Atwater High School, the number was 12 percent.
Some residents fear they soon will have no home at all.
“I don’t want to end up at that tent camp on Santa Fe,” said one middle-aged woman, who lost her job last year. She asked that her name not be used because she’s looking for employment. “It’s terrifying for a single person to live in a car,” she said.
Another woman, also facing foreclosure, swallows Lexapro and a stew of other anti-depression and anti-anxiety drugs just to make it through the day.
State cutbacks
The same economic downturn tied to the real estate crisis is savaging the California state budget, provoking massive cuts in mental health care throughout the state.
Merced County government has seen its number of mental health clinicians cut to 24 from 33 at a time when it needs more counselors, not fewer. Each outpatient nurse’s case load has increased by 125 cases due to the latest staff cuts last September.
In all, county workers’ caseload of ongoing mental health patients has grown from 2,365 in all of the last fiscal year to 2,229 for only the first six months of this one.
Yet a key piece of the department’s budget was cut in half last year in Sacramento, meaning that Merced County lost $1.1 million earmarked for inpatient and crisis care.
No statistics are available for exactly how many county residents seeking mental health help are dealing with home foreclosures. Nor has much medical research been conducted on how the wave of foreclosures can affect public health nationwide.
However, an article published in October in the American Journal of Public Health reported on a study of Philadelphia area residents undergoing foreclosure in the summer of 2008.
The findings are grim. More than one-third of those residents met the screening standards for major depression, such as feelings of sadness and changes in appetite or sleep patterns, said the article’s lead author, Dr. Craig E. Pollack, a RAND Corporation researcher and assistant professor of medicine at George Washington University in Washington, D.C. That compares with about 13 percent for people living in poverty.
“The financial stress is quite severe for individuals and their families,” Pollack said in a telephone interview. “They’re buying their homes with a great deal of hope and expectation, and when that hope and expectation turns into disappointment, that can have a very harmful effect on people’s health and well-being.”
Another researcher, Dr. Esther Sternberg, who has studied stress extensively, said that for a homeowner, foreclosure can provoke a massive emotional upheaval.
“Moving against your wishes, and moving because you’ve lost everything, is one of the biggest stressors I can imagine,” said Sternberg, director of the Integrative Neural Immune Program at the National Institutes of Health and author of the book “Healing Spaces: The Science of Place and Well-being.”
She continued: “There’s change. Uncertainty. Fear, because you don’t know what’s going to happen to you. Different parts of the brain get involved. Then you’re grieving the loss of your dream.
“It would be a pretty resilient person who would not develop depression as a result of all of this.”
Not as planned
It wasn’t supposed to be this way. Just a few years ago, Merced flashed all the trappings of a boomtown.
Construction was under way on the gleaming new UC Merced campus, designed to educate 25,000 students in the San Joaquin Valley. That meant new jobs and a new college-town cachet for Merced. Developers began touting it as a bedroom community for would-be homeowners squeezed out of the pricey Bay Area housing market.
So the houses went up, and buyers bit, shouldering huge debt and risky mortgages. But campuses grow slowly; UC Merced’s enrollment is 3,414 students today. Many potential out-of-town buyers weren’t ready to move into the new homes intended for them.
When the housing bubble burst, Merced County fell hard. With the accompanying recession, the area lost a litany of failed retailers: Mervyns, Linens ‘n Things, Circuit City and then Gottschalks, the venerable Fresno -based department store.
The county’s only locally owned bank disappeared, too. The federal government took over County Bank in early February 2009 after it was trapped in a quagmire of bad loans to developers, eroding investor confidence.
Merced County’s unemployment rate soared. In December, 19.8 percent of workers wanted jobs, far outstripping the 12.4 percent rate for California and the 10 percent rate for the nation overall.
Morrison remembers when she first noticed an uptick in patients seeking mental health counseling at Golden Valley. It was the same time that she began seeing day laborers lined up along Olive Avenue, hoisting signs that touted big closing sales at Mervyns and other stores.
One of her clients, a man with almost no cash, told her that he had awakened early in hopes of getting a day job holding a sign for Linens ‘n Things: “He said that he got there at 5 a.m., and the line was already around the block.”
As a therapist, Morrison is trained to ask clients in crisis to think about alternatives – say, friends and relatives who can loan money or open up their homes. Too often these days, her clients have no alternatives at all. If they lose their homes, they can’t rent new quarters without first putting down cash. That can mean a $700 deposit for a one-bedroom apartment, and another $700 for the first month’s rent.
One client already had displayed anxiety and other mental health problems so severe that she was on a fixed disability income. When the house she rented went into foreclosure, she had no money to rent another home. So she moved in with her ex-husband, who had a history of physical abuse and continues to verbally abuse her.
For residents on the verge of losing their homes, knowing that their neighbors and friends are in the same straits may or may not be reassuring.
Jobs remain scarce, and that, coupled with the high foreclosure rate, may make residents even more pessimistic, said Jim McDiarmid, director of behavioral sciences at the Mercy family medical residency program.
“It’s depressing when you realize that you’re living in a community with such high unemployment,” McDiarmid said. “Your chances of getting back on your feet are so much less.”
