The Emergence of Post-Traumatic Foreclosure Disorder

By William Hudson

Foreclosure Calls That Haunt

For years, Neil Garfield and his staff received daily calls from homeowners facing foreclosure.

The voices carried every emotion imaginable:

• Fear and confusion

• Helplessness and betrayal

• Anger and urgency

• Despair and complacency

Some homeowners waited too long and discovered nothing more could be done. Others fought back and prevailed. Many lost. But all were changed forever.

When Foreclosure Becomes Trauma

The way people react to foreclosure depends on:

• Resiliency and emotional strength

• Family support and outside resources

• The degree of injustice suffered—loan modifications revoked, fraud discovered, or defaults engineered by servicers

A simple foreclosure from financial hardship is devastating enough. But years of litigation, unethical tactics, and judicial complicity create trauma that lingers for years.

That trauma deserves a name: Post Traumatic Foreclosure Disorder (PTFD).

PTFD: A Parallel to PTSD

While not a medical diagnosis, PTFD mirrors the symptoms of Post-Traumatic Stress Disorder (PTSD):

• Intrusive memories of lawsuits, evictions, or bank fraud

• Avoidance of neighborhoods, courts, or even conversations about foreclosure

• Negative changes in mood—anger at banks, distrust of lawyers, numbness, hopelessness

• Changes in emotional reactions—outbursts, hypervigilance, guilt, shame, self-destructive behavior

These symptoms interfere with work, relationships, and everyday life.

Physical and Social Consequences

The impact of foreclosure extends far beyond the courtroom:

• Health risks: Princeton researchers linked foreclosure to higher rates of hypertension, diabetes, and anxiety-related medical visits. Suicide attempts also rise with foreclosure rates.

• Family strain: Parents under financial stress struggle to provide stability. Children may show depression, poor academic performance, and long-term developmental issues.

• Public shaming: Foreclosure notices posted online or nailed to the front door brand families with stigma that can impact reputation and employment for years.

• Economic collapse: Job losses, rising costs, and the inability to modify loans compound stress and force families into deeper crisis.

The Modification Rollercoaster

Loan modification programs like HAMP were supposed to help. Instead, they became another source of trauma.

• Endless requests for paperwork

• Conflicting answers from servicers

• “Dual-tracking”—taking payments while secretly preparing foreclosure

• Offers that lead to false hope and then sudden rejection

This cycle creates an emotional rollercoaster that leaves homeowners exhausted, humiliated, and defeated.

Why the Stigma Must End

Foreclosure is not usually a choice. It often results from:

• Job loss

• Health crisis

• Market collapse

• Rising living costs

Yet society continues to shame families for circumstances beyond their control. Worse, banks are incentivized to foreclose rather than modify, creating trauma that is both unnecessary and avoidable.

A Call for Recognition

Although Post Traumatic Foreclosure Disorder is not in the DSM-5, it should be recognized as a real and devastating phenomenon. Millions of Americans have experienced it. Mental health professionals need to:

• Understand foreclosure as a trigger for trauma

• Provide resources for resilience and recovery

• Advocate for systemic change in banking practices

When to Seek Help

Foreclosure trauma is real, and it can be life-threatening.

👉 See a doctor or mental health professional if symptoms last more than a month, feel overwhelming, or prevent you from regaining control.

👉 If you or someone you know is suicidal, get help immediately:

• Call the U.S. National Suicide Prevention Lifeline at 800-273-TALK (800-273-8255).

• Press 1 to reach the Veterans Crisis Line.

• Call 911 or go to the nearest emergency room if someone is in immediate danger.

Final Word

Foreclosure is more than a financial event—it is a mental health and medical crisis.

Homeowners may rebuild in time, but the scars of foreclosure—emotional, physical, and social—run deep. Recognition is the first step toward healing.

REFERENCES

Ackerman, T. (2010, March/April). Foreclosure vs. homeless: Take a proactive approach. Facts and Findings. Retrieved from http://www.nala.org/Upload/file/PDF-Files/FactsFindings/Ackerman.pdf

Caner, A., & Wolff, E. N. (2004). Asset poverty in the United States: Its persistence in an expansionary economy. Levy Economics Institute of Bard College, Public Policy Brief, 76. Retrieved from http://www.econstor.eu/bitstream/10419/54341/1/515646784.pdf – See more at: http://execrank.com/board-of-directors-articles/understanding-the-negative-effects-of-home-foreclosures-on-mental-and-physical-health/#sthash.twdomYHj.dpuf

Kalita, S. (2011, August 1). Tying health problems to rise in home foreclosures. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB1000142405311190419940457653829377187000 6.html?mod=WSJ_hp_LEFTTopStories

Lashley, M., Maudry, B., Jeffers, A. E., & Davis, D. E. (2009). Psycho-social impact of mortgage foreclosure. European Journal of Management, 9(3). Retrieved from http://www.freepatentsonline.com/article/European-Journal-Management/260792631.html

Mental health: Keeping your emotional health. (2002, October 1). American Family Physician, 66(7), 1287-1288. Retrieved from http://www.aafp.org/afp/2002/1001/p1287.html

Robertson, C., Egelhof, R., & Hoke, H. (2008, August 18). Get sick, get out: The medical causes of home mortgage foreclosures. Health Matrix, 18(65). Retrieved from http://law.cwru.edu/studentLife/organizations/healthmatrix/files/Robertson%20Final%20Article~1.pdf

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Tags: distressed homeowners, ptsd depression, stress, trauma
Posted in discovery, foreclosure defenses, foreclosure mill, Uncategorized |