The Financial Crisis Hits Home: Foreclosures and Asset Exhaustion in Boston

This article reviews the depletion of financial assets that families in foreclosure experienced in Boston, Massachusetts. Drawing on 37 interviews with predominantly families of color in foreclosure around the City of Boston between 2007 and 2008, this article suggests that a critical process on the path to foreclosure is asset depletion that leads to asset exhaustion. Asset depletion is the process of using up savings and other liquid and nonliquid investment vehicles to cover day-to-day expenses when income is not enough to do so. In the case of foreclosure, asset depletion to the point of asset exhaustion is motivated by the significance of the home for the family. Even when a family does not lose its home to foreclosure, it loses critical stabilizing financial assets, leaving the family vulnerable to further economic shocks and less likely to achieve upward social mobility. This article explores the process of asset depletion that leads to asset exhaustion in foreclosure and the motivations that drive a family to deplete its assets to the point of exhaustion in foreclosure, providing key insights for policymakers considering the implications of foreclosure for affected families' economic security and social mobility.