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MELISSA BLOCK, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Melissa Block.

ROBERT SIEGEL, host:

And I'm Robert Siegel.

Since the U.S. housing crisis began, more than 2 million families have been through a foreclosure or a short sale. Losing a house can be hard in many ways.

For the next few minutes, we're going to focus on what it does to a borrower's credit. Researchers are only now starting to track what happens to people after they lose their homes, and after their credit takes the inevitable hit.

NPR's Yuki Noguchi tracked down a few such borrowers to talk about life after foreclosure.

YUKI NOGUCHI: Melissa Moore is a 41-year-old mother of two. In the space of five years, she has gone from being a landlord to being at the mercy of them.

Ms. MELISSA MOORE: My credit is below abysmal. And it never was like that before. I mean, I - the mortgages that I had, they were in my name. I was able to get them by myself because I had really good credit.

NOGUCHI: But Moore bought those homes at the epicenter of the housing bust in Phoenix. After the value of those homes plummeted by two-thirds, she had no option but to sell for far less than the mortgages were worth in order to move to Boston for a job. But then in Boston, few landlords even considered her.

Ms. MOORE: You know, I am a responsible person. I'm an attorney. I'm not a kid. I have a family. And for someone to question - and I understand why they question it - but for them to question it, it's very hard to be put back in that position. I feel like I'm back in my early 20s, you know, where you don't have any credibility. It's difficult.

NOGUCHI: Anywhere, credit is an issue. Moore feels like her 480 credit score marks her - like when she tried, and failed, to refinance a small loan on her car.

Ms. MOORE: I'm at the dealership with people who are significantly younger than I am, you know, sort of looking at me funny because my credit is so bad. And again, why didn't you pay your mortgage for 13 months, and this whole thing. And it's humiliating to be in that position.

NOGUCHI: That is not the only impact people facing foreclosure fear. Some people who have been through foreclosure worry employers might use damaged credit scores against them when they interview for a job. According to one survey of employers, nearly half of employers ran credit checks on some of their job applicants.

To address concerns that this penalizes those already affected by the recession, there's a bill in Congress proposing to prohibit employers from using credit scores to screen job seekers. To be sure, there are people who remain relatively unaffected after losing their home. Some say they even had no trouble getting a new home loan. They are the exception, though.

People like Steve Pacheco are far more typical. Pacheco's story began with his wife briefly losing her job early last year. He asked the bank to modify the mortgage on his Chicago-area home.

Mr. STEVE PACHECO: Basically, they told us to stop making payments, and then they might be able to work out a modification for us. And, you know, in hindsight, that was the worst possible thing to do, since we ended up being in the foreclosure process.

NOGUCHI: Pacheco's credit plummeted from 750 to 500, which made him unwelcome in most rental offices.

Mr. PACHECO: I tried to work deals, you know - saying, hey, we'll give you -double the security deposit, or we'll sign on for a two-year lease right now if, you know, if you're looking for somebody. And it didn't seem to matter. As soon as they heard foreclosure or as soon as, you know, they saw my credit report, you know, that was it for them. They weren't willing to work with us.

NOGUCHI: Instead, they had to rent an old house from a friend, further from work. That, in turn, meant they needed another car, which they were only able to get after paying a high premium, and 20 percent interest, on a used clunker.

Pacheco says in addition to his confidence and his credit, he lost sleep and even social support during the process.

Mr. PACHECO: Through the whole thing, like, there are people that - I told them I moved because I sold my house. But even though, you know, it's kind of true, it's not the whole story. And I feel like, you know, I'm not being 100 percent honest with them, and it tears me up a little bit.

NOGUCHI: Pacheco says he feels stigmatized because of the number attached to his name. But since there are so many others who've met a similar fate, he hopes maybe that will lessen over time. He says by speaking about his experience now, perhaps a landlord might be listening. And maybe they'll be more willing to look beyond the credit score.

Yuki Noguchi, NPR News.

SIEGEL: And tomorrow, Yuki explores how the large number of foreclosures is forcing some landlords to change the way they think about borrowers with bad credit.

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