Is mortgage crisis causing divorces?

The financial pressure that comes with an escalating house payment or a foreclosure may indeed be playing a role in breaking up marriages, experts say.

By Don Moore for

The home-mortgage crisis in the United States has spawned problems in the mortgage, real-estate and banking industries, and many consumers now face mortgage-payment increases in the coming months that could cause the number of foreclosures to climb even higher.

And all of those financial woes, experts say, may be spawning another problem: an increase in divorces.

“Historically, the three most likely reasons for foreclosure problems are: loss of job, loss of health and loss of spouse. On top of that, these days, escalating mortgage payments are exacerbating the divorce problem,” said Nicholas Retsinas, the director of Harvard University’s Joint Center for Housing Studies.

The Harvard housing expert said it’s too soon for a definitive study linking divorce to the country’s recent foreclosure woes. But Scott Daniels, an Ocala, Fla., real-estate agent, doesn’t need a study to tell him what he already knows: The mortgage-industry crisis is causing an increase in the number of couples who are getting divorced.

“In the last three months, we have accepted five listings which are divorce sales. In each instance, it’s due to the obligation of meeting their mortgage payments,” Daniels wrote earlier this year in his blog.

“Faced with pressure, these couples are blaming one another! Rather than attempt to work together to resolve the problem, they find it easier to separate. They each have in common the same exact problem: No one is able to make a decision on what price to sell for!”
Daniels, of Florida List for Less Realty, said financial woes caused by variable mortgage rates “are really straining to a relationship. When times are good, people are happy. They love and laugh in unison. When the world is bad, they get ugly with each other. Human nature is funny that way.”

Daniels thinks once statistics between the mortgage rates and divorce rates are compiled, the public will see a national trend. “It’s a trend that will continue as long as real-estate prices spiral down. Many couples can’t face the reality of mounting bills, higher mortgage payments and decide it’s better to part. As we move forward this trend is happening at an alarming rate leading to foreclosures,” he says.

In response to his blog post, Daniels said, he received 50 to 60 replies from real-estate agents around the country who agreed with his assessment that the mortgage problems are leading to more and more foreclosures — and more and more divorces.

In 2002, when the latest statistics were available,, ranked Nevada as the No. 1 state in the nation for divorce. Arkansas ranked second and Wyoming third. In cities, Reno, Nev., had the most divorces, with Las Vegas and Evansville, Ind., following behind.
Though there are no studies linking foreclosure to divorce rates, Frank Fincham, the director of Florida State University’s Family Institute, said, “Financial problems among couples are one of the main reasons for divorce in this country today.” A recent poll commissioned by ranked financial issues as the No. 2 reason that Americans divorce, with abuse ranked as No. 1.

Columbus, Ohio, psychologist Jeff Sherrill said: “There is clear data on divorce and wealth. . . If you’re poor, your financial situation helps make marriage unstable. If you’re having trouble sustaining a stable life, it can result in divorce.”

Randy Kessler, a lawyer in Atlanta, said the downturn in the housing market is definitely causing more stress for couples, even if they are not getting divorced.

“For years, Middle America thought it could get a divorce and use the equity in their home as a safety net, but there is no equity. There is no equity today,” Kessler explained. “It used to be, when couples bought a house, in five years it was worth more. And when people got divorced in those days they expected to be able to live for a while off the proceeds from the sale of the house. . . . We do have a lot of people in trouble in this country because the value of their house decreased.”

Still, despite the serious financial drawbacks to divorce, Kessler said: “If you want a divorce, it doesn’t matter what it costs you. Before most people get a divorce they have thought about it long and hard.”