Foreclosures' financial strains take toll on kids

— -- In many ways, Shelby Morrow is a typical 16-year-old. She likes hanging out with her friends, dreams of getting her own car and enjoys writing short stories in the bedroom of her wood-frame house in Palm Harbor, Fla.

But in the past few months, she's been grappling with a financial reality that most teens don't face. The home she shares with her mother, Melody, and younger sister, Lindsey, is falling into foreclosure. Some days, she watches as her mother cries over the stress.

"I completely understand what's going on, so I went out and got a job as a server at a nursing home," Shelby says. "I don't want to move. Sometimes, I blame my mom for it, but I know it's not her fault. I'm scared."

Shelby and millions of other young people have become the largely overlooked victims of a real estate crisis that's led to record foreclosures, sinking home prices and rising numbers of families straining to pay mortgage bills as adjustable-rate loans grow more costly and home equity shrinks. Children and teenagers are enduring a variety of consequences — forced to move and say goodbye to friends, leaving behind schools and teachers, and losing the ability to take family vacations or take part in summer camps because of the financial strain.

Some are giving away family pets or suddenly finding themselves in charge of babysitting siblings because parents can no longer afford child care. In the most drastic cases, some wind up living with relatives or even in temporary shelters for the homeless.

"This housing crisis is taking away the innocence of our kids," says Phillip Lovell, vice president of education policy for First Focus, a Washington, D.C.-based bipartisan advocacy group focused on families and children.

"Kids take their homes for granted, and when you lose that, there are long-term impacts. It cripples children. It affects their education, health and behaviors. These are low- and middle-income children. It runs the income gamut."

Researchers are beginning to study the impact of the current housing crisis on children, and their findings are bleak: An estimated 2 million children will be directly affected by the subprime mortgage crisis as their families lose their homes to foreclosures, according to an April report by First Focus.

That number is considered low, the group says, because the study didn't include families who were renters when they were evicted as a result of foreclosures on their buildings, or families who bought homes with prime mortgages.

The consequences of foreclosures and frequent moves can include behavioral problems, learning deficiencies such as declining performance in math and reading, health problems resulting from families' inability to keep health insurance, and emotional issues such as shame and anxiety, according to the report.

Earlier studies support the First Focus findings. Children who are frequent movers were 77% more likely than those who have not moved to display several behavioral problems, according to a 1994 General Accounting Office report.