RealtyTrac’s January 2008 U.S. Foreclosure Market Report™, reports that foreclosure activity in 2008 is “up 57 percent from January 2007.” In real terms, this translates into foreclosure filings on 233,001 properties and represents “an increase of 8 percent from the previous month”. Financial and home related pressures are among the ten greatest stressors we can face, therefore, it goes without saying that concern over losing a home can impact an employee’s work performance. Yet, employers can play a role in helping employees to deal with this stress and maintain focus at work.

The number of employees that will be affected at your organization will depend upon where you are located. While foreclosures for some states decreased in January; the greatest number occurred in California, Florida and Texas. Legal protection for tenants also varies by state. Cynthia Osterman writes in a Reuters article that “New Jersey and the District of Columbia dictate that leases survive foreclosure. “ High foreclosure rates may reduce the number of available rental units, writes Osterman, while existing tenants may face cut off utilities, “eviction, financial loss and pressure tactics from new owners who want them to move out.”

So, what steps can an employer take to mitigate the impact of foreclosure or potential foreclosure? Affected employees may require a flexible work schedule to be able to negotiate with banks, creditors or landlords or to move. Employers can also direct employees towards trustworthy legal and financial advice. In a USA Today article, Sandra Block recommends the following sources of information: The Homeownership Preservation Foundation, The National Foundation for Credit Counseling, and the U.S. Department of Housing and Urban Development. It is important that employees access a trustworthy source of information to avoid becoming victims of predatory lending practices.

Some organizations have employee assistance programs (EAP) in place. The purpose of an EAP, according to the Employee Assistance Professionals Association “is a worksite-based program designed to assist (1) work organizations in addressing productivity issues and (2) "employee clients" in identifying and resolving personal concerns, including, but not limited to, health, marital, family, financial, alcohol, drug, legal, emotional, stress, or other personal issues that may affect job performance.”

Meanwhile, the employee can take action as well. Citing performance management expert Dick Grote, L.M. Sixel highlights the importance of telling the boss about the situation before performance is affected. The purpose of sharing this information is not to provide an excuse, but to create understanding if and when flexibility is needed. As Grote suggested in the aforementioned article on dealing with life stressors, companies still “have the right to discipline employees, even if they had very understandable reasons for not getting work done. (Of course, that doesn't include employees who take time off under the Family and Medical Leave Act.)”

For more detailed information on predatory lending practices, the Knowledge@Wharton article referenced below may be helpful.

References:

Block, Sandra. “Foreclosure hurts long after home’s gone, so cut a deal while you can.” USA Today [www.usatoday.com]. Obtained February 28, 2008.

Employee Assistance Professionals Association. “About Employee Assistance” [www.eapassn.org]. Obtained February 28, 2008.

Knowledge@Wharton. Parsing The Predatory Lending Problem. [www.forbes.com], February 25, 2008.

Osterman, Cynthia. “Eviction can come suddenly for renters.” Reuters [www.reuters.com]. February 14, 2008.

RealtyTrac Staff. “Foreclosure activity increases 8 percent in January.” RealtyTrac. Press release [www.realtytrac.com]. February 26, 2008.

Sixel, L.M. “Focus in face of adversity.” Houston Chronicle [www.chron.com]. October 3, 2007.