Getting a Workout: Mortgage Modification, Class, and Shifting Financial Institutions

Abstract

The foreclosure crisis of the Great Recession (2007-2009) has presented American homeowners with a diverse array of options for dealing with a mortgage they can no longer afford. In this article I explore how homeowners navigate this ever-changing financial landscape. I combine in-depth interviews with homeowners at risk of foreclosure in San Jose with an institutional ethnography of a foreclosure prevention help center. I find that most homeowners pursue one of two strategies for dealing with their mortgage troubles. The first strategy, employed largely by working class homeowners, relied on reaching out to their peers with similar financial difficulties. This proved to be both an efficient strategy and a particularly good source of insider information. The second strategy, pursued primarily by middle class homeowners who were ashamed of their financial circumstances, relied on impersonal and anonymous sources of information. This strategy was not only less efficient and less informative; it also frequently resulted in missed opportunities. Importantly, class variation in strategies of action was largely the result of differential access to other troubled homeowners.