Safe as Houses: Financialization, Foreclosure, and Precarious Homeownership in the United States

Abstract

The financialization of the U.S. economy has had important implications for household well-being, but the mechanisms connecting financialization and precarity have not been fully identified. This research identifies mortgage foreclosure as a nexus connecting macro-level financialization to an array of downstream consequences for homeowners and asks (1) how mortgage securitization, a key technology of financialization, enabled new foreclosure practices; and (2) how these practices affect housing precarity among homeowners at risk of foreclosure. To answer these questions, I analyze court records, interviews with key participants, and primary source documents to examine the evolution of mortgage foreclosure in Cook County, Illinois, from 1992 to 2006. I find that as mortgage securitization transformed the social and economic relations between borrowers and lenders, foreclosure became actively managed as both a driver of costs and a source of profits, and loan administrators and their attorneys worked to reduce costly borrower protections. These changes increased housing precarity by making foreclosure more frequent and more rapid.