MERCED — Three weeks ago, a retired telephone company worker named Ethelda Lopez watched as her dream retirement home was auctioned on the lawn outside the county courthouse in downtown Merced.
"When I heard my address, it was so disheartening," she said. For six months, she had made hundreds of calls to her mortgage company, federal officials, local political leaders — begging them all for lower payments or more time. No one paid heed.
Wracked with depression and anxiety, she was too ashamed to tell her friends that she was losing her stucco-and-stone ranch home in the Atwater countryside.
"I couldn't stop crying myself to sleep," said Lopez, 51. "When I started to try to tell my story, it would just come out as crying. I was too embarrassed, too depressed to go out anymore. ...
I would never wish this on anyone."
Lopez's story is one of two dozen gathered in a four-week investigation of the psychological and other health problems wreaked by the foreclosure crisis. Over and over, residents caught up in that crisis -- homeowners, renters, even Realtors — report they are suffering from stress or depression and are sometimes too ashamed to reach out for help.
This is the hidden human fallout from foreclosure. It is going largely untreated, even as county governments brace for more state cuts in mental health services.
Thousands of new homes, including Lopez's, sprouted from farmland throughout the region over the past five years. Merced, in particular, was gearing up for a bright future as a college hub. Optimistic developers dreamed of throngs of buyers paying $300,000 and more so they could raise their children in neat stucco homes in tranquil cul-de-sacs.
But the dream crumbled, and so did the peace of mind homeownership is supposed to guarantee.
Now, many homeowners are caught in a nightmare, trying to figure out how to pay mortgages on dwellings worth a fraction of what they owe — or whether they should give up the dream and move on.
About 50,000 Northern San Joaquin Valley homes have been lost to foreclosure since the housing crisis began 3½ years ago, according to ForeclosureRadar. That means about one in eight homeowners has been displaced, which makes the valley the nation's foreclosure epicenter.
The drama plays out in front of courthouses in Modesto, Merced and Stockton every weekday, when investors and their real estate agents bid for foreclosed homes such as Lopez's.
What the statistics don't show is the human toll. Debt-wracked residents are suffering from anxiety, sleeplessness and depression.
Clinically, their suffering may not qualify as post- traumatic stress disorder, the psychological state felt by soldiers, police officers, first-responders and others after a traumatic experience.
Some residents have reached out for help.
At Merced-area health care clinics, workers report an increase in people experiencing mental distress and an increase in the seriousness of their symptoms. Many new patients are homeowners or renters fearful of losing their homes and all the stability a home provides, they say.
"We're seeing more people coming for crisis services, people who have never been in the system before," said Theresa Schoettler, who manages Merced County's inpatient psychiatric unit and walk-in clinic. "There's a lot more alcohol abuse."
Many feel so much shame about their financial and emotional distress that they shut themselves off, too fearful to ask for help, mental health workers report. Entire families suffer as stress radiates from debt-plagued parents to their frightened children, they say.
"The trickle-down of this is big. Kids have stomachaches. They don't want to go to school," said Elizabeth Morrison, clinical director of behavioral health at Golden Valley Health Centers, a network of nonprofit commu- nity clinics and dental sites in the region.
School leaders are concerned, too. In the Merced Union High School District, which covers students in all of Merced, Atwater and Livingston, 613 students, or 7 percent, reported this year that they were "doubled up" with another family in a single-family home.
Modesto City Schools officials are seeing the same trend.
"We don't track those numbers, but really, what we're seeing is some empty homes, and people starting to double up in homes or even triple up in homes," said Marlin Sumpter, director of child welfare and attendance at the 28,000-student district.
Families also are moving to areas with less expensive rents, including but not limited to Ceres and Merced, Sumpter said.
"There's a variety of where they're moving, and it's determined largely by where they have family members to live with," he said.
Mental health spending cuts
The same economic downturn tied to the real estate crisis is savaging the California state budget, provoking massive cuts in mental health care. Merced County's government has seen its mental health clinicians cut to 24 from 33. Each outpatient nurse's caseload has increased by 125 cases because of staff cuts in September.
Stanislaus County has closed mental health clinics in outlying communities and reorganized staff to focus resources on patients with the most severe mental illnesses. It has avoided laying off clinicians, but vacant positions may be left unfilled.
No statistics are available for exactly how many Merced and Stanislaus county residents seeking mental health help are dealing with home foreclosures, apparently because county agencies are not keeping a tally.
Stanislaus County's mental health crisis team says it sees one or two people each week who are losing their homes.
Most are not a match for the county's treatment services and they are often referred to support groups, said Madelyn Schlaepfer, associate director of county Behavioral Health and Recovery Serv- ices.
Victims of the housing crunch also are seeking help at the Doctors Behavioral Health Center in Modesto, a facility that contracts with the county. Some have such a sense of hopelessness or suicidal tendencies, they are considered for admission to the hospital, which is designed to stabilize people in psychiatric emergencies, its medical director said.
"Some of them are mimicking the stages of grief and loss that you see with death and dying," said Dr. Antoun Manganas.
The psychiatrist estimates he has seen 50 to 60 victims of the economy in the past year. Their anxiety over losing their homes and jobs may be accompanied by family tensions and a sense they have lost control of their lives, he said.
Some have moved into the homes of relatives and feel overwhelmed with the stress of their new living arrangements.
Manganas said many should be referred for professional counseling, but help is not available if they don't have private insurance, Medi-Cal or Medicare.
"We counsel them as much as we can (at the hospital) and try to arrange counseling at a church or support groups in the community," he said.
Living with severe stress
An article published in October in the American Journal of Public Health reported on a study of Philadelphia-area residents undergoing foreclosure in the summer of 2008.
The findings are grim. More than one-third of those residents met the screening standards for major depression, such as feelings of sadness and changes in appetite or sleep patterns, said the article's lead author, Dr. Craig E. Pollack, a Rand Corp. researcher and assistant professor of medicine at George Washington University in Washington, D.C. That compares with about 13 percent for people living in poverty.
"The financial stress is quite severe for individuals and their families," Pollack said. "They're buying their homes with a great deal of hope and expectation, and when that hope and expectation turns into disappointment, that can have a very harmful effect on people's health and well-being."
Another researcher, Dr. Esther Sternberg, who has studied stress extensively, said that for a homeowner, foreclosure can provoke a massive emotional upheaval.
"Moving against your wishes, and moving because you've lost everything, is one of the biggest stressors I can imagine," said Sternberg, director of the Integrative Neural Immune Program at the National Institutes of Health and author of the book, "Healing Spaces: The Science of Place and Well-being."
She continued: "There's change. Uncertainty. Fear, because you don't know what's going to happen to you. Different parts of the brain get involved. Then you're grieving the loss of your dream.
"It would be a pretty resilient person who would not develop depression as a result of all of this."
Bee staff writers J.N. Sbranti, Ken Carlson and Michelle Hatfield contributed to this report.