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After the housing bubble popped in the mid-2000s, foreclosure rates increased fivefold. Many families had trouble paying their mortgages and faced losing their homes to foreclosure.

While we have information about the characteristics of families who lost their homes to foreclosure from earlier studies, we do not have much information about what happens to families throughout the foreclosure process or after losing their homes.

In the paper below, I use a unique data set linking the 2008 panel of the Survey of Income and Program Participation (covering the time period May 2008 through November 2013) with foreclosure event data for 2005 through 2011 from RealtyTrac, a company that maintains a database of foreclosure events based on government records. Using these data, I look at how families at risk of losing their homes or who lost their homes have fared.

I examine how foreclosure affects family well-being, including family income, use of government assistance programs, doubling up or sharing a household, food insecurity, and support from others. Not surprisingly, families experiencing foreclosure had a harder time paying their mortgage or other bills than families who did not experience foreclosure. Families facing foreclosure also saw their earnings fall more than those families who did not experience foreclosure, suggesting that losing a job could trigger and accelerate housing hardship.

Families at risk of losing their home were more likely to turn to government assistance programs for support than other families. Families experiencing foreclosure were also more likely to double up or share their home.

On average, families that experienced foreclosure received less support from family and friends to pay housing costs than other families, however upon receiving a notice of foreclosure the likelihood of receiving support for housing costs from family or friends increased.

The stage of foreclosure also affects well-being.

Families that defaulted on mortgage payments had a harder time meeting their expenses, including housing costs, than other families. However, families in default were less likely to receive help in paying their mortgage, even from family or friends.

Families with homes listed for sheriff’s sale were more likely to double up than other families, by either sharing their home or moving in with others. In an effort to slow down or prevent foreclosure, some families doubled up.

Families who lost their homes to foreclosure had lower earnings than other families. These families were also more likely to access public safety net programs and help from sources other than family or friends, suggesting that they had fewer of their own resources to save their home or find a new home.

In general, families facing foreclosure were worse off than their counterparts, and experienced declines in well-being in terms of income, the ability to meet their expenses, and support from family and friends. You can read more about how foreclosure affects family well-being in the paper.

Note: Initiated in 1983, the Survey of Income and Program Participation provides a wealth of information to analyze the economic situation of people in the United States. It offers detailed information on cash and noncash income, while also collecting data on taxes, assets, liabilities and participation in government transfer programs. The data allow the government to evaluate the effectiveness of federal, state and local programs.