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

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  • Walker Nelson Kahn

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.

Suggested Citation

  • Walker Nelson Kahn, 2024. "Safe as Houses: Financialization, Foreclosure, and Precarious Homeownership in the United States," American Sociological Review, , vol. 89(2), pages 197-226, April.
    • Handle: RePEc:sae:amsocr:v:89:y:2024:i:2:p:197-226
    DOI: 10.1177/00031224241231011
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    References listed on IDEAS

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    1. David Durand, 1941. "Risk Elements in Consumer Instalment Financing," NBER Books, National Bureau of Economic Research, Inc, number dura41-1, June.
    2. Kurt Eggert, 2007. "Comment on Michael A. Stegman et al.’s “Preventive servicing is good for business and affordable homeownership policy”: What prevents loan modifications?," Housing Policy Debate, Taylor & Francis Journals, vol. 18(2), pages 279-297, January.
    3. David Durand, 1941. "Risk Elements in Consumer Instalment Financing, Technical Edition," NBER Books, National Bureau of Economic Research, Inc, number dura41-2, June.
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