In the wake of the housing market crisis, a wave of foreclosures ripped through the country, leaving a trail of financial destruction behind it. But while the borrowers with mortgages on these properties often get the most attention as being the most devastated by the market collapse, many people forget about the impact this had on their households, USA Today reports.
According to a recent survey conducted by First Focus, one in 10 U.S. children have encountered some form of hardship from the financial crisis, with an estimated 2.3 million kids living in a home lost to a repossession in the past five years.
"Children are the often invisible victims of the foreclosure crisis," report author Julia Isaacs told USA Today.
Meanwhile, the report noted that there are currently an additional 3 million children living in homes that are at risk of a foreclosure.
Regionally, real estate data showed that the most children impacted from the foreclosure crisis were in states that experienced waves of repossessions, such as Florida, Arizona and California. In contrast, the state's with the most housing safety and soundness for children were Alaska and North Dakota.
The report indicated that there are serious consequences from a child getting uprooted from a foreclosure, said the report. A number of factors, such as health, development and school performance, can all be negatively impacted. Specifically, it was found that the math and reading levels of these children drop as if they had missed a month of school after going through a foreclosure.
However, Isaacs noted that since the study only examined mortgage records between 2004 and 2008, the widespread effect of the foreclosure crisis on children could actually reach much further. In addition, one factor that was not accounted for are the economic implications of families that have multiple children. While this data was not examined during the survey, experts believe there is a possibility that the mortgage delinquency rate may be high in families with more children as a result of the added financial draw.
While the damaging effect of foreclosures can be long lasting on not only children, but entire households, the recent multibillion-dollar settlement reached between the nation's largest lenders and state attorney general offices on behalf of homeowners who were wrongfully foreclosed upon could help these families regain their financial footing.