A study released recently by ProjectHOPE is attempting to call attention to how medical disability drives foreclosures — claiming medical problems are a more likely cause of foreclosure than (predatory) subprime lending:

While news that nearly 20% of subprime borrowers are behind on their mortgage payments, the real threat to working class security is disability due to illness or injury. A Project HOPE study, which examined reasons for personal bankruptcy, revealed that nearly 50% of respondents filed bankruptcy because of bills related to a major medical event. A full 21% of filers reported losing at least two weeks of work-related income due to illness or injury. “What’s sad about this situation, is that, for many working-age adults, a source of disability income (DI) during this period of disability could have eased the financial stress,â€? said President and CEO of NavGate Technologies, Robert Pearson.

I’m not really sure they proofed this release, since the first sentence in the above material makes absolutely no sense to me, however many times I read it. Nonetheless, it’s an interesting point — but I still have to wonder if those with medical disabilities are likely to also have poor credit histories, making them more likely to also be in the “subprime” bucket in the first place. Having worked in the default industry for years, I can tell you that a high percentage of foreclosures — and especially post-foreclosure evictions — involve some sort of medical disability, whether perceived or real. That’s a wholly unscientific result, but I’d bet that any HW readers also working in default, loss mit, foreclosure or REO would agree with that assessment.