Longing for a Better American Dream: Homeowners in Trouble Evaluate Shared Equity Alternatives

Abstract

ObjectiveWe investigated how households with histories of mortgage default, including foreclosure, view traditional homeownership and how shared equity homeownership (SEH), an alternative housing tenure, would be evaluated.MethodFocus groups and individual interviews with households who had contacted foreclosure counseling organizations were analyzed for themes relating to perceptions of homeownership and renting. After explaining the SEH concept, interviewees compared this form of tenure to both traditional homeownership and renting.FindingsInterviewees associated homeownership with increased ontological security and financial stability, but the associations were reversed when mortgage delinquency and foreclosure were discussed. Nonetheless, they strongly preferred owning to renting. Participants were interested in SEH and found it a potentially valuable form of homeownership if practical details were properly addressed.ConclusionsSEH offers the benefits that interviewees associated with homeownership. Those with histories of mortgage default expressed strong interest in SEH as an alternative to traditional homeownership and renting. Policy implications are discussed.