Aside from the actual financial loss involved, losing your home can be a horrendous blow to the ego and an emotional burden on you and your entire family.
Denial is one of the major factors contributing to foreclosures.
They hope that it will take care of itself, or maybe that they'll win the lottery. They might even admit it to themselves, but they refuse to take that all-important first step. They don't want to call their mortgage company and admit that they are having financial problems. The most important thing to remember is that the lender does not want to foreclose. Lenders are in the money business, not real estate.