As Economy Falls, Fears Rise

Fears are mounting in the wake of Wall Street’s recent losses and the struggling state of the housing market. The foreclosure numbers alone can be terrifying: 81,312 homes were …

Fears are mounting in the wake of Wall Street’s recent losses and the struggling state of the housing market. The foreclosure numbers alone can be terrifying: 81,312 homes were lost to foreclosure in September and 265,968 people received some form of foreclosure filing on their homes during that time period. That’s an increase of 71 percent from the same time last year, according to CNN Money. And all the economic troubles facing the country is adversely affecting crime rates and the public’s psychological well-being.

“Using data on foreclosures, neighborhood characteristics, and crime, we find that higher foreclosure levels do contribute to higher levels of violent crime,” according to a 2005 study by the Federal Reserve Bank of Chicago. When the foreclosure rate rises by one percent, violent crime in the neighborhood increases by 2.33 percent, according to The Boston Globe. Even solidly middle-class neighborhoods are suffering from the increased crime that goes hand-in-hand with a sinking economy.

Franklin Reserve in Elk Grove, Calif., has more than 2,000 bank-owned houses for sale. The residents of the neighborhood formed the Franklin Reserve Neighborhood Association (FRNA) to combat the escalating criminal activities such as drugs, theft and graffiti. People in some Rhode Island neighborhoods have begun stealing plumbing from abandoned houses, causing flooding, according to The New York Times.

There has also been a disturbing number of violent incidents stemming from the collapsing housing market and subsequent economic problems.

In the San Fernando Valley, Karthik Rajarama—former money manager—shot and killed his wife, sons and mother-in-law before killing himself. In his suicide note he stated that he had considered killing only himself because of his financial difficulties, but killing the entire family seemed more honorable. “Rajaram once worked for a major accounting firm and for Sony Pictures, and had been part-owner of a financial holding company,” according to the Ventura County Star.

Carlene Balderrama—a 53-year-old woman from Taunton, Massachusetts—shot herself on July 22 an hour and a half before her home was scheduled to go up for auction. She had been intercepting foreclosure mailings and shredding them before her husband could see them. She left a life insurance policy and a suicide note instructing her family to pay off the remainder of the mortgage using the money from the insurance.

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And then there’s Addie Polk from Akron, Ohio, who has been dubbed by some as the “poster child” of the foreclosure crisis. The 90-year-old widow shot herself in the chest Oct. 1 when officials arrived to evict her from the home in which she’d lived for 40 years. “Court records show Polk took out a 30-year, 6.375 percent mortgage just four years ago for $45,620 with a Countrywide Home Loan office in Cuyahoga Falls. She took out a line of credit that same day for $11,380. Her La Croix Avenue home was appraised by Summit County in 2004 at $31,230,” according to the Akron Beacon Journal. Ms. Polk survived her suicide attempt and Fannie Mae subsequently forgave her mortgage.

Suicide prevention hotlines report an increased number of calls as a result of the recession.

“The Samaritans of New York have seen calls rise more than 16 percent in the past year, many of them money-related. The Switchboard of Miami has recorded more than 500 foreclosure-related calls this year,” according to CNN.

Turning to desperate measures is an unfortunate trend during difficult economic times. Though the stories of ruined Wall Street tycoons hurling themselves from New York City skyscrapers on Black Thursday is probably exaggerated, suicide rates did increase from 14 to 17 per 100,000 people during the Great Depression, according to the National Parks Service. During the economic downturn of the 1970s, the city of New York was a “hell on earth,” according to The New York Times. But, the paper also states, this was not necessarily directly influenced by the sagging economy but rather by the city’s decision to lay off a large portion of the police force.

The foreclosure crisis and the economic downturn are definitely scary, but that doesn’t mean that we should let fear of them consume our lives. There are some important ways in which those struggling with foreclosure and financial issues can adjust their approach and make the ordeal a little easier on themselves.

“Adding to financially tense households is an air of secrecy. Experts said it’s common for one spouse to blame the other for their financial mess or to hide it entirely, as Balderrama did,” according to CNN. Homeowners going through foreclosure need to realize that they do not have to get through this difficult situation alone. Keeping spouses and families in the dark will not make the situation any better; in fact, it is likely to make it worse in the long run.

Dr. Keith Ablow, a psychiatry correspondent for FOX News Channel and a New York Times bestselling author, wrote on that those struggling with finances should try to put the issues into perspective “as things happening in your life, not life itself,” seek more information on the economy and try to view themselves as survivors rather than as victims.

“This perfect storm of lowered self-esteem and perceived loss of face is indeed the growing place for divorce, panic disorder, major depression and stress-related medical conditions like hypertension. That’s why a national program that would offer a kind of ‘outplacement’ psychological counseling to those who are losing or who have lost their homes is needed,” Ablow wrote. “Losing one’s home can feel like losing one’s self.”

When one’s financial situation begins to feel desperate, it is wise to seek the help of a qualified professional; whether that person is a psychiatrist or a financial counselor, he or she can help make a plan to get through the problems.

Suicide prevention hotlines are also available and willing to listen.


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