Don't Let Foreclosure Destroy Your Mind

Unfortunately, 40 other homes in the neighborhood went on sale at the same time, saturating a housing market where consumers had little appetite or capacity to purchase them any longer. His realtor now estimates he might sell the home for $750,000. The value of his rental properties declined sharply as well.

To make matters worse, Frank's client lost the job he had been in for more than three decades. (Frank declined to provide his name, citing privacy concerns.) A business coach suggested he take his severance package and take a six-month vacation, which he plans to embark on shortly.

"It's terrible," says Frank. "He's just under water and he's just going to let the thing go under foreclosure. He's not broke but because of the stress, he lost his job, too."

The American Psychological Association provides tips for those coping with such financial anxiety. The group suggests that you don't overreact to a bad situation, but also don't become passive. It's important to identify the key problems, formulate a plan and stay focused on improvement and long-term goals despite short-term problems or pain.

If you find yourself moving toward unhealthy behaviors -- smoking, drinking, drugs, gambling or emotional eating -- consider seeking help from a mental-health specialist before it becomes a serious problem or causes damage to your personal relationships or job. Credit counseling services and financial planners can also help in times of economic stress.

And on the bright side, the APA notes, "times like this, while difficult, can offer opportunities to take stock of your current situation and make needed changes."