Foreclosures are often expressed in popular media as occuring in “waves,” e.g., the foreclosure wave due to the reset of option adjustable-rate mortgage (ARM) interest rates, or the foreclosure wave due to increase in unemployment. While it may be adequate to describe the number of foreclosures as waves, the individuals who have experienced foreclosure first-hand might describe a foreclosure more in terms of a tsunami. In some situations, owners may be forcibly evicted from their homes. Abandoned properties may be boarded up, gutted, or vandalized. Foreclosure also has a lasting ripple effect on neighboring home owners by applying downward pressure on property values.

The effects of foreclosure in distressed homeowners:

• Loss of home
• Loss of equity
• Damage to credit – Scores may be lowered as much as 200 points or
  more, negative credit hit remains on credit history for seven years.

The effects of foreclosure on Neighboring homeowners:

• Declined home values
• Loss of equity
• Increased possibility for vandalism and theft

The effects of foreclosure on the surrounding community:

• Declined home values
• Reduced tax payer base
• Increased possibility for vandalism and theft