A person in foreclosure is, by the definition of foreclosure, not losing their home. They never owned a home, all they owned is a call option on a home.
You can't lose something you never had to begin with.
Lets follow your logic. My lease runs out on Jan 31. Am I "losing my home"? If I'm not, what distinguishes my repo agreement/lease from other peoples call option/mortgage?
> Am I "losing my home"? If I'm not, what distinguishes my repo agreement/lease from other peoples call option/mortgage?
I actually agree with your basic sentiment, but there is an answer to this. Losing a mortgaged home hurts more than an apartment because people tend to have greater levels of endowment effects -
> In behavioral economics, the endowment effect (also known as divestiture aversion) is a hypothesis that people value a good or service more once their property right to it has been established. In other words, people place a higher value on objects they own than objects that they do not.
Endowment effects is looking pretty robust at this point, it's been shown on a lot of unrelated types of goods and services. People have a much greater attachment to a "home" than an "apartment" - I mean you can even think of the difference in connotation and prestige between being a "homeowner" and "renter" - this probably isn't a good thing by the way, but it's definitely real.
Average people don't care about call options or rates of return, they care that they have a roof over their head.