GOVERNING  UNCERTAINTY:  FORECLOSURE,  FINANCE,  AND  THE  AMERICAN  DREAM  IN   MICHIGAN     By     Anna  Virginia  Jefferson                             A  DISSERTATION     Submitted  to   Michigan  State  University   in  partial  fulfillment  of  the  requirements   for  the  degree  of     Anthropology  -­‐  Doctor  of  Philosophy     2013     ABSTRACT   GOVERNING  UNCERTAINTY:  FORECLOSURE,  FINANCE,  AND  THE  AMERICAN  DREAM  IN   MICHIGAN     By     Anna  Virginia  Jefferson     Michigan  alone  has  accounted  for  more  than  one  of  every  eight  foreclosures   nationwide  since  the  housing  crisis  began  in  2006.  This  dissertation,  researched  at  the   height  of  new  foreclosure  activity  (August  2009—October  2010)  in  mid-­‐  and  eastern   Michigan,  argues  that  widespread  foreclosure  undermines  American  cultural  citizenship.   Data  for  the  dissertation  include  fourteen  months  of  participant  observation  at  housing   counseling  agencies,  industry  trainings,  outreach  events,  and  political  rallies;  interviews   with  distressed  homeowners  (n=29)  and  housing  professionals  and  activists  (n=34);  and   secondary  materials  including  legislation,  government  analyses,  popular  media,  and   industry  training  materials.     My  key  claims  are  (1)  that  threatened  foreclosure  upends  claims  to  upward   mobility,  the  American  dream,  and  national  greatness  premised  on  a  broad  middle  class.   (2)  The  foreclosure  crisis  accelerated  the  reconfiguration  of  state  power  such  that  finance   is  more  integral  to  the  state  and  everyday  life.  Simultaneously,  citizens’  access  to  the  state   is  mediated  both  through  banks  and  non-­‐profits  that  try  to  help  homeowners  avoid   foreclosure.  Together,  personal  experiences  facing  foreclosure  and  their  governance  in   everyday  life  change  the  substantive  rights  of  American  citizenship,  namely   homeownership,  state  legitimacy,  and  belief  in  the  consonance  of  business  and  public   interests.     As  the  birthplace  of  the  American  auto  industry  and  strongest  labor  union,   Michigan’s  history  validated  beliefs  in  upward  mobility,  the  blue-­‐collar  middle  class,  and   economic  and  social  inclusion  for  African  Americans—all  told,  the  prototype  of  the  good   life.  These  were  instrumental  to  the  postwar  vision  of  shared  affluence,  the  most  visible   sign  of  which  was  owning  a  home.  From  the  perspective  of  distressed  homeowners  and   housing  professionals,  Michigan’s  post-­‐industrial  struggles,  including  foreclosures  and  the   state’s  infamously  “shrinking  cities,”  continued  to  rupture  the  social  compact  and,  similar   to  deindustrialization,  privilege  finance  over  community  wellbeing.     The  signature,  albeit  flawed,  policy  response  to  the  foreclosure  crisis  is  the  federal   Home  Affordable  Modification  Program  (HAMP)  administered  through  mortgage  servicers   and  sometimes  with  housing  counseling  agencies,  such  as  those  where  I  conducted   fieldwork.  Michigan  implemented  an  additional  protection  in  2009  so  that  distressed   homeowners,  with  the  help  of  a  housing  counselor,  could  negotiate  alternatives  to   foreclosure.  Financial  institutions  failed  to  implement  HAMP  and  other  programs   effectively,  confounding  both  homeowners’  and  the  state’s  efforts  to  safeguard  citizens’   welfare.  Counseling  agencies  that  offered  frontline  assistance  simultaneously  distanced   their  clients  from  the  state  and  taught  them  to  lower  their  expectations  for  modifications.   Homeowners’  experiences  strained  their  loyalty  to  financial  institutions  they  believed   served  their  interests  and,  as  they  negotiated  under  the  auspices  of  state  or  federal   programs,  their  trust  in  public  institutions.  In  conclusion,  I  argue  that  these  mediations   refigure  the  locations  and  practices  of  governance  and  citizenship.                                                 Copyright  by   ANNA  VIRGINIA  JEFFERSON   2013     DEDICATION                                         This  work  is  dedicated  to  Randy,  who  makes  so  much  possible.   I  also  dedicate  this  dissertation  to  the  Michigan  homeowners  and  advocates  who   generously  shared  their  time  and  experiences  with  me.   v   ACKNOWLEDGMENTS       I  am  tremendously  grateful  to  my  committee  members  Elizabeth  Drexler,  Laurie   Medina,  Brandt  Peterson,  and  Lisa  Fine.  Their  interest,  commitment,  and  willingness  to  ask   me  questions  have  been  unwavering  over  the  years.  My  advisor,  Elizabeth  Drexler  has,   above  all  else,  resolutely  trusted  me  while  holding  me  to  the  highest  standards  of  truth   telling.  I  am  also  indebted  to  Anne  Ferguson  of  the  department  of  anthropology  and  Center   for  Gender  in  Global  Context  for  the  joy  of  editing  the  Gendered  Perspectives  on   International  Development  working  paper  series  for  four  years.   This  work  would  not  have  been  possible  without  the  encouragement  of  Jodi  Mercer,   Mary  Townley,  Sharon  Evans,  and  Sean  Chapman  in  the  homeownership  division  of  the   Michigan  State  Housing  Development  Authority  (MSHDA),  Franklin  Street  Community   Housing  Corporation,  Capital  Area  Community  Services,  and  many  housing  counselors  and   consumer  advocates:  especially  Tami  Farnum,  Verna  Smith,  Bill  Acheson,  Juanita  Grissom,   and  Bette  Brown,  and  Ingham  County  Treasurer  Eric  Schertzing.  Thank  you  for  your   curiosity  about  this  project  and  willingness  to  share  your  time,  knowledge,  and  resources.   I’m  deeply  grateful  to  all  the  homeowners  facing  foreclosure  who  were  willing  to  share   their  stories  with  me.  Many  of  them  said  it  was  important  to  share  their  stories  in  order  to   reduce  foreclosure’s  shaming  power  and  help  others  in  the  future.  I  have  tried  to  be  a  good   steward  of  your  stories  and  trust.     The  MSU  Graduate  School  provided  me  with  generous  financial  support  through  a   University  Enrichment  Fellowship  (2005—2010)  and  a  Dissertation  Completion   Fellowship  (2013).  The  anthropology  department,  in  conjunction  with  the  Writing  Center,   began  offering  facilitated  peer  writing  groups  in  2011,  which  were  key  to  my  writing   vi   process.  To  my  writing  buddies  and  dear  friends,  thank  you  for  the  moral  and  intellectual   support:  Deon  Claiborne,  Adrianne  Daggett,  Rowenn  Kalman,  Tazin  Karim,  Christine   Labond,  Rebecca  Meuninck,  and  Heather  Yocum.  Additional  friends  in  Michigan  without   whom  this  project  could  not  have  succeeded  include  Cristina  and  Bryan  Benton,  Tyson  and   Beth  Cowles,  David  and  Cris  Käppynen,  Andrew  Ratkiewicz,  and  Sara  and  Josh  Vredevoogd.   Deepest  namaste  to  my  yoga  teachers,  especially  Hilaire  Lockwood  O’Day  of  Hilltop  Yoga,   who  taught  me  mana  eva  manushyanam  karanam  bandha  mokshayoho…and  so  much  more.     I  could  not  ask  for  better  colleagues  than  I’ve  found  at  Abt  Associates.  Their   intellectual  and  material  support  and,  above  all,  friendship  have  been  invaluable.  I   particularly  thank  Sandra  Nolden  and  Mary  Joel  Holin,  who  encouraged  me  to  take  time  off   to  write.  Kimberly,  Meg,  Katie,  Judy,  Kristina,  Jennifer  L.,  Jennifer  T.,  Shawn,  Morgan,   Melissa,  and  Melanie—thank  you  for  the  cheerleading,  cups  of  tea,  walks  around  the  pond,   and  more.  Jean  and  David  Layzer,  thank  you  for  an  idyllic  space  to  write  at  a  key  time  in  the   dissertation  process.     My  parents—Marcia  Walker,  Michael  Cox,  Jon  Jefferson,  Jane  McPherson,  and  Coral   and  Ray  Juras—are  incredible  friends,  teachers,  and  role  models.  This  dissertation  and   much  more  would  not  be  possible  without  the  moral  support,  intellectual  challenge,  and   safe  haven  provided  by  my  husband,  Randall  Juras.  The  depth  of  your  confidence  in  and   generosity  to  me  is  marvelous  and  humbling.   vii   TABLE  OF  CONTENTS     LIST  OF  TABLES.........................................................................................................................................................x   LIST  OF  FIGURES..................................................................................................................................................... xi     Chapter  1   Introduction ............................................................................................................................................. 1   Distress .................................................................................................................................................................... 1   On  Crisis,  Finance,  and  Citizenship  ............................................................................................................. 7   State  Power  Beyond  the  State.................................................................................................................11   Anthropology  of  Finance...........................................................................................................................17   Consumption  as  Citizenship ....................................................................................................................20   Consumption  and  the  American  Dream  of  Citizenship.....................................................................27   The  Promotion  of  Homeownership......................................................................................................31   Situating  Michigan  in  the  Foreclosure  Crisis.........................................................................................37   “The  Cities  that  Built  America” ...............................................................................................................37   The  Context  of  Local  Foreclosures........................................................................................................41   Research  Methods,  Participants,  and  Data.............................................................................................46   Chapter  2   At  Home  in  a  Crisis.................................................................................................................................................59   Buying  In ...............................................................................................................................................................59   Busted,  Part  I .......................................................................................................................................................64   Tearing  Down  the  House................................................................................................................................68   Busted,  Part  II .....................................................................................................................................................71     Chapter  3   “Not  what  it  used  to  be:”  Schemas  of  Class  and  Contradiction  in  the  Great  Recession ..........84   The  Rise  and  Restructuring  of  Michigan’s  Industrial  Cities............................................................86   Eras  of  Economic  Restructuring ............................................................................................................94   Losing  the  Good  Old  Days ..............................................................................................................................98   Downward  Mobility ...................................................................................................................................... 107   “I  went  shopping”....................................................................................................................................... 115   “The  Average  Middle  Class  Poor  Person” ............................................................................................ 122   Chapter  4   Financialization,  Debt,  and  Ownership...................................................................................................... 132   Financializing  Mortgages  and  Too  Big  to  Fail .................................................................................... 137   Uncertainty:  Lenders  Work  With  You  “Like  the  Brick  Wall  Across  the  Street”................... 149   Financialized  Ownership ............................................................................................................................ 165   Narratives  of  Moral  Order  and  Visions  of  Escape ............................................................................ 182   Walking  Away ............................................................................................................................................. 183   Suicide  Stories............................................................................................................................................. 187   viii   Strategic  Default  and  Other  Paths  to  Redemption ...................................................................... 190     Chapter  5   Foreclosure  Intervention:  State  Power  in  the  Great  Recession ...................................................... 196   Betwixt  and  Between  State  Power.......................................................................................................... 198   “Turning  Everywhere” ............................................................................................................................ 198   Being  Seen  Like  A  State........................................................................................................................... 206   The  Housing  Counseling  Industry  and  The  Arts  of  Governance ................................................ 213   Foreclosure  Interventions.......................................................................................................................... 216   “They  can  see  it  and  they  know” ......................................................................................................... 223   Michigan’s  90-­‐day  Law............................................................................................................................ 225   Housing  Counseling  in  Practice................................................................................................................ 229   Getting  In....................................................................................................................................................... 229   Counselor  Ethics  and  Practice ............................................................................................................. 237   It’s  After  Hours:  The  Limits  of  the  Law................................................................................................. 247   Evicted............................................................................................................................................................ 249   The  Legal  Battle.......................................................................................................................................... 257   Chapter  6   Conclusion:  Governing  Uncertainty ............................................................................................................ 265   The  American  Dream:  Configurations  of  State  and  Self ................................................................ 269   Changing  State  Forms................................................................................................................................... 273     APPENDIX ............................................................................................................................................ 284     BIBLIOGRAPHY .................................................................................................................................................... 306   ix   LIST  OF  TABLES     Table  1.  Demographic  Information:  Lansing,  Detroit,  Michigan,  and  United  States .................42     Table  2.  Household  Characteristics  of  Homeowners  Facing  Foreclosure .....................................51   Table  3.  Bankruptcy  and  Property  Transfer  Vocabulary......................................................................73   Table  4.  Primary  and  Secondary  Mortgage  Market  Terminology.................................................. 136   Table  5.  Help-­‐Seeking  by  Homeowners  Facing  Foreclosure ............................................................ 201   Table  6.  Loss  Mitigation  Options .................................................................................................................. 234     Table  7.  Overview  of  Primary  Data  Collected  (August  2009—April  2011)............................... 304     x   LIST  OF  FIGURES     Figure  1.  Historical  Reflections  (speech  incidents).............................................................................. 103   Figure  2.  Foreclosure  Timelines ................................................................................................................... 221   Figure  3.  Sketch  of  Farm  Layout ................................................................................................................... 251   Figure  4.  Letter  to  Township  Board ............................................................................................................ 259       xi   Chapter  1:  Introduction     Distress     The  day  I  first  met  C.J.  to  talk  about  her  mortgage  trouble  was  one  of  those   midwestern  fall  days  when  the  maples  have  started  to  turn  but  the  sun  shines  brightly,   beating  off  the  underlying  chill.  I  pulled  up  to  C.J.’s  golden  brick  and  vinyl-­‐sided  ranch   house  in  southwest  Lansing,  Michigan,  in  an  established  subdivision  with  a  high  foreclosure   concentration  and  foreclosure  risk  score,  according  to  measurements  developed  by  the  U.S.   Department  of  Housing  and  Urban  Development.  At  the  time,  C.J.  was  among  thousands  of   distressed  Michigan  homeowners  who  were  trying  to  maintain  homeownership  through  a   loan  modification  offered  under  the  federal  Home  Affordable  Modification  Program   (HAMP)  or  another  work-­‐out  option  available  through  their  mortgage  servicer.   Approximately  6  percent  of  mortgage-­‐debtors  nationwide  were  in  serious  delinquency,  or   “distress”  (OCC  and  OTS  2010).1       In  spite  of  the  balmy  weather,  it  was  dim  and  cold  in  C.J.’s  house.  She  did  not  normally   turn  on  the  heat  in  order  to  save  on  utility  costs,  but  had  been  running  a  space  heater  in  the   living  room  that  morning  to  make  the  house  more  hospitable  for  my  visit.  I  met  C.J.  through   one  of  two  primary  agencies  where  I  conducted  research  on  the  experiences  of  foreclosure   intervention  in  mid-­‐  and  eastern  Michigan  in  2009  and  2010.  Although  the  agency  had  not   been  able  to  get  C.J.  a  loan  modification,  she  responded  to  a  letter  it  mailed  to  her  on  my   behalf.  C.J.  is  an  African  American  woman  who  had  retired  from  her  job  as  a  corrections                                                                                                                   1  The  OCC  and  OTS  mortgage  delinquency  statistics  represent  mortgages  owned  by   federally  regulated  thrifts  and  banks  (approximately  64%  of  all  outstanding  mortgages).   1   officer  and  subsequently  became  disabled.  Though  she  filed  for  non-­‐duty  disability   benefits,  her  claim  was  denied—which  was  immensely  painful  to  her  after  feeling  that  she   put  her  life  at  risk  for  the  state  throughout  her  career.  She  had  struggled  consistently  for   the  past  3  years  to  pay  her  mortgage,  medical  bills,  and  utilities.  Her  house  had  been  in   foreclosure  before,  in  2004,  but  she  bought  it  back  during  the  redemption  period  (after  the   public  auction)  by  draining  her  retirement  accounts.  Already  feeling  betrayed  by  the  many   banks  that  had  owned  her  loan,  her  union,  and  the  state,  the  feeling  intensified  while   working  on  a  loan  modification.  “[Y]ou  vote  as  a  democrat—you  vote  for  these  people.   When  you  need  them,  you  can’t  access  them  or  call  them  or  they  don’t  respond  to  you.”   When  she  did  not  qualify  for  the  Obama  administration’s  Home  Affordable  Modification   Program  (HAMP),     to  me,  it  was  a  lie.  It’s  not  meant  for  people  struggling,  trying  to  survive  and   have  good  health.  That’s  why  people  walk  away.  You  find  out  you’re  not   qualified.  You  hear  an  ad  and  go  to  the  agency  but  there  it’s  a  whole  other   ballgame.2             Although  she  had  been  severely  depressed  over  her  medical  and  economic  struggles,  C.J.   came  to  the  conclusion  that  if  she  had  to  give  up  her  house,  she  would  be  okay,  that  she   could  move  on  and  recover.  At  the  time,  her  recovery  strategy  hinged  on  hanging  on   somehow  for  a  couple  more  years  until  she  was  old  enough  to  draw  Social  Security.  It  is   significant  how  prominent  is  C.J.’s  feeling  that  she  has  been  failed  as  a  citizen,  not  that  she   has  failed  as  a  homeowner  or  as  a  debtor.         In  this  dissertation,  I  argue  that  facing  foreclosure  defines  crisis  and  financial   citizenship—categories  I  use  to  analyze  the  shifting  institutional  locations  of  governance                                                                                                                   2  Interview,  C.J.,  October  5,  2010,  Lansing,  Michigan.   2   and  the  subjective  experience  of  that  power.  Recognizing  that  the  crisis  was  multifaceted,   as  were  people’s  positionalities,  the  question  I  entered  the  field  with  was,  How  do  people   affected  by  the  foreclosure  and  financial  crisis  in  Michigan  make  sense  of  their  experiences   as  individuals,  citizens,  community  members,  and  as  subjects  of  the  American  dream?  What   I  discovered  in  research  from  August  2009  to  October  2010  was  that  although  history,   citizenship,  and  the  American  dream  weighed  on  the  experiences  of  foreclosure,  “making   sense”  was  in  shorter  supply.  I  therefore  take  uncertainty  and  unfixity  to  be  central  means   for  examining  shifting  boundaries  between  state  power,  financial  power,  and  non-­‐ governmental  institutions.       Contrary  to  my  intentions  when  I  began  this  project,  this  dissertation  is  not  a  story   about  the  outcomes  of  the  foreclosure  crisis  or  the  outcomes  of  housing  counseling.  Many   of  the  homeowners  I  discuss  in  detail  in  this  dissertation  had  been  working  to  avoid   foreclosure  on  the  order  of  2  years.  I  cannot  say  this  is  representative  of  distressed   homeowners  or  of  housing  counseling  practice  statewide.  Indeed,  no  one  can  because  a   lack  of  clear  statistics  on  the  scope  and  distribution  of  problems  in  the  foreclosure  process   continued  to  plague  intervention  efforts  up  until  the  time  of  this  writing  (early  2013).  The   2012  settlement  between  50  U.S.  attorneys  general  and  the  five  largest  mortgage  servicers   cited  the  companies  for  a  broad  array  of  deficiencies  in  their  foreclosure  processing,   including  long  delays  and  lost  paperwork,  suggesting  that  my  informants’  experiences  may   not  be  extraordinary  for  that  moment  in  time.  The  delays  owed  to  structural  factors  that   predate  the  crisis,  intended  responses  to  the  crisis,  and  unintended  consequences  of   programs.  However,  even  if  the  homeowners  I  discuss  are  outliers,  like  marginalized   groups  in  other  circumstances,  their  experiences  should  be  of  concern  to  anthropologists,   3   economists,  and  policymakers.  Experiences  at  the  margin,  because  of  their  extremity,   reveal  the  possibilities  and  fractures  that  inhere  even  in  the  smoothest  center  of  our  social   systems  (Das  and  Poole  2004).     In  fact,  recent  anthropological  work  on  bureaucracies  suggests  that  focusing  on  the   outcomes  achieved  by  programs  misses  fundamental  features  of  programs,  namely  the   importance  of  waiting,  wherein  one  is  simultaneously  “teeter[ing]  on  the  verge  of  both   success  and  failure”  (Hoag  2011:86).  It  is  in  this  dangerous  moment  of  possibility  that   homeowners  enter  housing  counseling  agencies,  when  their  daily  experience  shifts  from   the  certainty  associated  with  homeownership  to  the  uncertainties  of  negotiation.       “Distress”  is  the  housing  industry  term  to  describe  difficulty  making  a  mortgage   payment.  The  category  includes  being  delinquent  on  payments,  being  underwater  on  a   mortgage,  or  trying  to  conduct  a  short  sale  (noted  as  distressed  sales  in  real  estate   statistics).  Being  distressed  is  not  only  a  financial  state  but  also  often  an  emotional  one.   There  is  the  feeling  of  dread  and  uncertainty  that  can  drag  on  for  years  as  homeowners   wait  for  their  lender  to  come  to  a  decision—to  modify  or  foreclose—or  for  the  elusive   promise  that  their  financial  situation  will  improve.  When  homeowners’  secure  attachment   to  that  identity  is  challenged,  “facing  foreclosure”  becomes  its  own  kind  of  subjectivity,  one   that  intersects  with  other  subjectivities  of  class,  race,  gender,  politics,  and  so  on.       Mortgage  distress  changes  one’s  subjective  anchoring  to  the  home-­‐as-­‐identity  and   inexorably  undermines  one’s  claim  on  membership  in  the  middle  class—where  being   4   middle  class  is  synonymous  with  financial  security.3  Most  people  facing  foreclosure  in  the   housing  bust  are  doing  so  because  of  having  lost  jobs  or  income  (Jefferson  et  al  2012).  For   many,  then,  losing  their  house  to  foreclosure  is  the  culmination  of  a  series  of  losses,   beginning  with  the  financial  security  of  (to  the  extent  one  had  it  to  begin  with)  and   identification  with  one’s  job.  More  than  losing  a  job,  losing  a  home  stands  for  losing  one’s   membership  in  the  middle  class,  for  disruption  of  family  life,  and  the  home  as  a  safe  space.       One’s  home  is  perhaps  the  most  significant  space  for  individual  identity.  Foreclosure   disrupts  a  person  or  family’s  connection  to  place  and  also  often  follows  the  disruption  of   job  loss,  both  historically  (Perin  1977)  and  in  the  present  case.  "The  threat  of  foreclosure   represents  a  significant  disruption  to  the  identity  and  social  status  associated  with   ownership;  the  spatial  context  of  daily  life;  the  constancy  of  the  social  and  material   environment  and  one's  control  over  it;  and  the  home  as  a  site  of  refuge"  (Fields,  Libman   and  Saegert  2010:653).  Foreclosure  and  eviction  further  involve  emotional,  familial,  social,   and  financial  losses  (Greenbaum  2008;  Purser  2010).  Further,  in  times  of  economic  and   social  crisis,  Americans  tend  to  make  a  collective  turn  to  the  home  as  a  safe,  secluded,  and   moral  space  (May  2008;  Coontz  1992)  and  more  recently  to  gated  communities  to  hold  at   bay  a  suite  of  perceived  threats  to  a  safe  middle-­‐class  lifestyle  (Low  2003).  At  a  national   scale,  foreclosures  became  perceived  as  a  “crisis”  precisely  because  they  were  increasingly   affecting  middle-­‐class  Americans.  Widespread  foreclosure  undermines  personal  and   collective  identification  with  upward  mobility  and  the  American  dream  and  its  attendant   moral,  political,  and  economic  order  (Saegert,  Fields,  and  Libman  2009).                                                                                                                   3    A  significant  number  of  wealthy  homeowners  have  been  foreclosed  in  the  crisis,  too.   Compared  to  those  of  lesser  means,  they  are  more  likely  to  walk  away  from  their   mortgages,  indicating  a  foreclosure  by  choice  rather  than  by  necessity.   5     A  nascent  literature  about  the  experience  of  home  loss  in  the  Great  Recession  is   developing  around  the  concept  of  ontological  security  (e.g.,  Ross  2009;  Fields,  Libman  and   Saegert  2010;  Strom  and  Greenbaum  n.d.).  Originally  developed  by  Anthony  Giddens,   ontological  security  is  a  feeling  of  trust  and  certainty  in  the  world  as  it  is,  and  one’s  place  in   it;  routine  and  predictability  are  key  elements  of  this  positive  existential  state.  Of  special   concern  here  is  that  homeowners  experience  greater  control  (subjective  and  objective)   over  their  living  environments,  higher  self-­‐esteem,  and  a  greater  sense  of  accomplishment   than  do  renters  (e.g.,  Rohe,  Quercia,  and  Van  Zandt  2007).  Homeowners  experience   wellbeing,  in  part,  because  of  the  predictability  and  stability  of  their  lives;  it  offers  a   physical  and  permanent  anchor  to  one’s  basic  sense  of  identity,  according  extensive   research  by  Saunders  (cited  in  Ross  2009).  The  point  I  want  to  draw  out  of  this  literature  is   that  threatened  foreclosure  undermines  the  daily  sense  of  certainty,  stability,  and  self-­‐ efficacy.       Several  homeowners  I  met  during  this  research  in  2009—2010  claimed  that,  even   though  they  would  prefer  to  keep  their  homes,  more  than  anything  they  wanted  a  decision   from  their  lender,  even  if  it  was  to  refuse  to  give  them  a  lower  payment.  Although  financial   troubles  are  a  tremendous  cause  of  stress  and  stress-­‐induced  ailments,  homeowners  also   reported  that  the  uncertainty  and  reversals  were  the  worst  part  of  their  predicament.  As   the  example  from  C.J.  suggests,  much  of  my  data  supports  and  extends  these  arguments   about  ontological  security  and  home  loss.       Because  my  research  concerns  people  in  the  liminal  state  before  loss,  I  want  to  take   this  chapter  to  delve  into  the  gulf  between  homeowner  and  home  loser.  I  am  well  aware   that  the  phrase  “home  loser”  is  fraught  because  it  brings  up  not  only  general  connotations   6   about  “losers”  but  specifically  because  of  Rick  Santelli’s  rant  against  mortgage   modifications  for  “losers”  that  is  credited  with  sparking  the  Tea  Party.  I  retain  it  here  to   remind  readers  of  the  severe  existential  stakes  of  home  foreclosure.  Like  other  liminal   states,  the  time  of  facing  foreclosure  is  a  moment  of  dangerous  transition,  of  instability   stumbling  toward  an  uncertain  outcome.  Inspired  by  works  about  insecure  and  marginal   lives  elsewhere  (e.g.,  Das  and  Poole  2004),  I  take  the  experiences  of  distress  to  be   illustrative  not  only  of  mortgage  modification  programs,  but  as  a  glimpse  into  the  fractures   and  vulnerabilities  of  broader  experiences  of  selfhood,  class,  and  political  subjectivity.       On  Crisis,  Finance,  and  Citizenship     Calling  the  events  and  processes  in  the  housing  market  a  “crisis”  hews  to  the  native   representation  of  what  is  happening.  In  that  register,  “crisis”  is  about  the  loss  of  a  national   project—widespread  homeownership  and  a  smooth  path  to  upward  (not  downward)   mobility.  This  crisis  is  about  the  relation  of  the  middle  class  to  capital,  of  the  signature  role   of  debt-­‐based  consumption  to  fuel  the  national  economy,  more  generally,  an  economy  of   continual  expansion,  and  the  contradiction  of  real  downward  mobility  against  the  ideology   of  upward  mobility.  Crisis  also  represents  what  families  themselves  experience  as  a   personal  economic  devastation.  There  is  also,  of  course,  the  global  financial  crisis  of  2008,   precipitated  by  the  devaluation  of  American  mortgage-­‐backed  securities.  The  losses  that   spread  from  Countrywide  and  other  “subprime”  mortgage  lenders  to  investment  banks   (e.g.,  Bear  Stearns,  Goldman  Sachs,  Lehmann  Brothers)  to  the  insurer  AIG  introduced  the   notion  of  systemic  financial  risk  and  the  political-­‐cultural  notion  of  institutions  being  “too   big  to  fail.”  It  was  this  that  prompted  the  US  Congress  and  Treasury  to  bail  out  large   7   financial  institutions  with  $700  billion  of  public  funds.  Framing  events  as  crises  justifies   interventions,  exceptions  to  the  norm  and  so  crisis  forms  a  way  into  problem  spaces  for   myriad  social  actors,  not  least  of  whom  are  policymakers.  President  Obama’s  chief  of  staff   Rahm  Emmanuel  famously  stated  in  commentary  on  the  financial  crisis  in  late  2008,  “You   never  want  a  serious  crisis  to  go  to  waste.  And  what  I  mean  by  that  is  you  use  it  as  an   opportunity  to  do  things  you  think  you  could  not  do  before.”  Crises  enable  and  force  people   into  new  relationships  with  the  world  around  them  and  the  ideas  that  had  made  the  world   make  sense.       Crisis  is  not  only  a  local  descriptor  of  the  moments  in  time  I  describe  but  also  a   theoretical  take  on  these  events.  Times  of  crisis  expose  contradictions  in  the  social  world,   simultaneously  making  visible  processes  that  were  previously  hidden  and  individual   experiences  that  would  otherwise  not  have  entered  public  consciousness  (Goddard  2006;   LiPuma  and  Lee  2004).  As  social  phenomena,  crises  connect  moments  of  vulnerability  to  an   enforced  visibility.  I  am  indebted  here  to  Victoria  Goddard’s  (2006)  reading  of  Zizek  and   Koselleck’s  work  on  crises.  In  Koselleck’s  analysis,  crises  are  the  recognized  inflection   points  when  a  set  of  contradictions  that  have  developed  over  a  longer  time  span  can  no   longer  cover  over  each  other.  Crisis,  then,  is  about  exposure  and  indeterminacy.       Financial  crises  pose  a  particular  problem  of  determination  and  representation.  In  a   recent  essay,  Paul  Crosthwaite  (2012)  argues  that  financial  crises  are  trauma  in  a  Lacanian   sense—they  are  encounters  with  the  Real.  At  the  outset,  this  poses  a  conceptual  problem   since  money  is,  definitionally,  part  of  the  symbolic  order  and  not  of  the  Real,  understood  as   that  which  defies  and  disturbs  the  symbolic  order.  Following  Zizek’s  work  on  capitalism,   Crosthwaite  argues  that  capital  is  the  “symbolic  Real”:  the  "inexorable  'abstract'  spectral   8   logic...which  determines  what  goes  on  in  social  reality"  (Zizek  2000  quoted  on  43).  As  with   other  crises  of  the  Real,  a  financial  crisis  exposes  the  emptiness  at  the  heart  of  what  was   once  believed  to  be  a  solid  order  and  system.  In  less  formal  terms,  this  is  the  discovery  that   that  credit  default  swaps,  collateralized  debt  obligations,  and  risk  tranches,  instead  of  being   instantiations  of  a  more  refined  capitalism,  are  a  shell  game.     This  dissertation  examines  the  ominous  and  indeterminate  sense  of  possibility  and   loss  when  the  housing  market  was  at  its  nadir  in  Michigan.  My  informants  sensed  not  only   that  they  personally  might  lose  their  houses  or  that  they  were  in  a  position  to  prevent   foreclosures  (depending  on  their  role),  but  that  something  was  very  wrong  about  the  whole   situation.  The  something  was  a  slippery  shape-­‐shifter:  sometimes  it  was  banks’  greed;  other   times  the  decline  of  the  productive  economy  in  the  United  States  and,  concomitantly  the   rise  of  spectral  powers  like  China;  other  times  it  was  homeowners’  recklessness,  ignorance,   or  disorganization;  politicians’  corruption;  or  an  inter-­‐generational  loss  of  morality,  be  it   gender  norms,  respect  for  one’s  word,  or  personal  discipline.  The  something  was  a  sense  of   a  comprehensive  wrongness,  the  complicity  of  everyone  and  no  one  all  the  time.  Without   getting  too  far  ahead  of  myself,  let  me  signal  that  the  sense  of  the  crisis  was  that  it  was  both   no  one’s  fault  and  everyone’s;  likewise,  responsibility  was  everywhere  and  nowhere.  This   is  where  my  analysis  diverges  from  the  ontological  security  argument.       Whereas  ontological  security  is  an  individual  phenomenon—a  “security  of  being”  or   “confidence…[in]  the  basic  existential  parameters  of  self”  (Giddens  cited  in  Ross  2009)— the  foreclosure  problem  in  the  United  States  now  is  not  only  undermining  individuals’   security  of  self.  The  magnification  of  foreclosure  by  six  or  twelve  million  is  not  just  an   additive  problem  but  has  broader  systemic  effects.  I  suggest,  then,  that  the  problem  of   9   foreclosure  is  one  of  governing  uncertainty,  which  I  mean  in  two  senses.  First,  that   uncertainty  is  the  governing  or  prevailing  experience  in  the  foreclosure  crisis.  For   homeowners,  it  is  the  question  of  what  will  happen  to  them  and  their  homes  and  the   existential  uncertainty  accompanying  loss  and  downward  mobility.  For  housing   professionals,  homeowners,  policymakers,  observers  and  the  public,  these  are  questions   about  local  and  national  economic  futures.  Second,  analytically,  I  mean  the  governing  or   management  of  uncertainty:  how  to  handle  both  individual  foreclosures  and  the   foreclosure  crisis  as  a  political  moment.  Crises  are  turning  points  after  which  history   might—or  might  not—look  completely  different.  It  is  this  uncertainty,  coupled  with  large-­‐ scale  interventions,  that  make  crises  fruitful  ethnographic  terrain,  bringing  opportunities   to  examine  head-­‐on  what  did  not  need  to  be  spoken  before.  From  the  early  20th  century   through  2008,  aspirations  for  and  promotion  of  homeownership  in  the  United  States  were   written  about  as  cultural  facts,  as  mere  background  material  or  context  for  so  many   statements.  It  is  the  former  common-­‐sense  status  of  beliefs  about  homeownership,  now   thrown  into  crisis,  that  frame  this  ethnography  of  foreclosure  intervention.       This  dissertation  examines  the  crisis  of  cultural  expectations  regarding  class,   governance,  and  inclusion.  Since  homeownership  has  been  a  key  claim  in  these  regards—to   middle  class  and  full  political  and  social  belonging—the  threat  of  widespread  foreclosure  is   a  critical  event  condensing  problems  not  only  in  the  obvious  area  (mortgage  default  for   individual  families)  but  also,  as  a  cornerstone  cultural  practice,  is  a  threat  against  many   cultural  ideals.  As  such,  I  argue  that  this  moment  signals  a  fundamental  shift  in  the  terms  of   American  cultural  citizenship,  made  visible  through  the  housing  crisis.     10   When  I  argue  that  facing  foreclosure  is  an  experience  of  citizenship,  I  am  making  a   claim  rooted  both  in  American  history,  via  the  American  dream,  and  in  anthropological   theories  of  the  state  and  subjectivity.  The  claim  for  this  mediation  between   governing/state-­‐like  institutions  as  being  one  of  citizenship  (not  just  power   relations/subjectivity)  is  about  both  (a)  the  state  form  and  (b)  the  subjective  experience  of   being  governed  by  these  entities.  My  argument  extends  three  bodies  of  anthropological   literature,  which  I  treat  in  turn  below:   1) on  broadening  the  understanding  of  the  boundaries,  forms,  and  locations  of  state   (and  state-­‐like)  power;   2) on  anthropology  of  finance,  which  until  recently  had  been  more  focused  on  financial   traders  and  professionals:  this  brings  the  state  into  the  analytic  frame  of  finance,   and  takes  a  view  of  finance  out  in  the  world;   3) on  extending  the  body  of  work  on  substantive  citizenship  generally,  and  consumer   citizenship  specifically.  This  paradigm  fits  with  recent  developments  in  the   literature  and  is  consistent  with  the  history  of  the  American  dream  myth.       State  Power  Beyond  the  State   “There  was  a  financial  meltdown…The  credibility  of  the  United  States  government  was  on   the  line."   —  Sarah  Dahlgren,  New  York  Federal  Reserve,   testimony  to  the  Financial  Crisis  Inquiry   Commission  (FCIC  2011)     In  thinking  about  state  practices  and  state  power,  I  draw  particularly  on  approaches   elaborated  by  Michel-­‐Rolf  Trouillot  (2001)  and  Timothy  Mitchell  (1991).  Trouillot  (2001)   11   argues  that,  under  globalization,  scholars  are  best  served  by  not  assuming  that  the  state  has   any  a  priori  institutional  forms.  Rather,  drawing  from  Gramsci’s  definition  of  the  State  as   political  +  civil  society,  Trouillot  urges  scholars  to  identify  state  power  through  power   relations  anywhere  in  the  social  formation  that  produce  individualized  subjects  who  are   organized  by  those  power  relations  into  regulated  and  governed  collectives.   Mitchell  (1991)  argues  that  state  making  is  about  the  continual  reinforcement  of  an   always-­‐elusive  boundary  between  state  and  society.  Mitchell  suggests  that  the  state  can  be   identified  through  “detailed  political  processes  through  which  the  uncertain  yet  powerful   distinction  between  state  and  society  is  produced”  (78).  Of  particular  importance  for  this   project,  Mitchell  notes  that  the  porous  boundaries  between  the  banking  system  and  the   state:   [T]he  relations  between  major  corporate  banking  groups,  semipublic  central   banks  or  reserve  systems,  government  treasuries,  deposit  insurance  agencies   and  export-­‐import  banks,  and  multinational  bodies  such  as  the  World  Bank,   represent  interlocking  networks  of  financial  power  and  regulation.  No  simple   line  could  divide  this  network  into  a  private  realm  and  a  public  one,  or  into   state  and  society.  At  the  same  time,  banks  are  set  up  and  present  themselves   as  private  institutions  clearly  separate  from  the  state.  The  appearance  that   state  and  society  are  separate  things  is  part  of  the  way  a  given  financial  and   economic  order  is  maintained.  (90)     In  the  last  decades,  financialization  has  intensified  these  innate  linkages  between  capitalist   states  and  finance.  Financialization  refers  to  the  explosion  of  categories  and  importance  of   financial  technologies  such  as  securities,  futures,  and  derivatives,  which  are  both   constitutive  of  and  constraining  to  everyday  life  (Martin  2002)  and  democratic  governance   (LiPuma  and  Lee  2004).  For  the  case  of  “developing”  countries,  LiPuma  and  Lee  argue,  for   example,  that  investors  in  the  global  derivatives  market  constrained  the  policies  of   Brazilian  president  Luiz  Ignacio  da  Silva  (Lula)  even  before  his  election  in  2002.  As  a   12   Workers’  Party  candidate,  da  Silva  ignited  fears  among  international  investors  that  he   might  default  on  foreign  debt  obligations  in  service  of  redistributive  justice  programs  in   housing,  infrastructure,  or  education.  Brazil’s  currency  lost  30  percent  of  its  value  by  the   time  da  Silva  was  elected,  which  led  the  new  government  to  divert  some  a  significant   portion  of  its  available  capital  to  debt  service  to  assuage  investors’  fears.  The  derivatives   market  in  this  case  directly  constrained  da  Silva  “in  his  attempt  to  ameliorate  economic  and   social  injustices,  which  is  precisely  what  the  citizens  of  Brazil  elected  him  to  do”  (LiPuma   and  Lee  2004:59).     What  the  U.S.  housing  and  financial  crash  reveals,  though,  is  a  politics  where   financial  institutions  do  not  enable  and  constrain  citizenship  from  a  distance,  but  rather  are   in  the  heart  of  that  relationship  everyday.  This  is  made  most  clearly  by  the  role  of   mortgage-­‐backed  securities—the  buying  and  selling  of  shares  of  ownership  in  Americans’   homes—by  domestic  institutions  selling  these  shares  of  ownership  both  domestically  and   globally.  Further,  of  course,  the  American  bailout  of  financial  institutions  under  the  rubric   of  Too  Big  to  Fail  in  2008  is  a  historical  moment  of  tremendous  significance  in  the   placement—and  blurring—of  the  boundaries  between  state  and  market.  As  the  Dahlgren   epitaph  to  this  section  makes  clear,  in  the  moment  of  the  U.S.  and  global  financial   meltdown,  agents  of  the  federal  government  were  incapable  of  disentangling  their  own   legitimacy  from  that  of  the  financial  system.  The  (somewhat  conflicted)  fusion  of  state  and   market  institutions  in  Too  Big  to  Fail  extends  the  neoliberal  logic  Wendy  Brown  (2003)   describes  where  the  state  imagines  its  only  source  of  legitimacy  arising  from  creating  a   vibrant  national  economy  through  which  market-­‐oriented  citizens  may  provide  for   themselves.  Too  Big  to  Fail  loosens  the  boundary  between  state  and  market,  confusing  the   13   question  of  where  one  will  and  will  not  find  a  relation  to  the  state.  I  return  to  these  points   in  chapter  4.     Mitchell  warns  against  a  totalizing  view  of  either  state  or  market.  In  particular,   Mitchell  says  that  by  saying  the  boundaries  between  state  and  society  (or  market)  are   elusive  is  not  to  say  that  there  are  none,  but  rather  they  are  not  atomized  from  one  another.   When  I  discuss  financial  citizenship,  I  am  not  advocating  for  a  collapse  of  state  into  market   and  vice  versa;  I  am  describing  the  lived  reality  of  the  post-­‐financial  crisis  as  I  understand   it.  What  emerges  experientially  is  a  present  of  deeply  blurred  boundaries  among   institutions  and  governance.  Financial  practices  are  integral  to  both  the  operations  of  state   and  sense  of  self.     One  of  the  fundamental  ways  I  approach  the  questions  of  governance  and   citizenship  is  through  role  of  housing  counseling  agencies  (HCAs),  the  type  of  agency  where   I  conducted  most  of  my  fieldwork  with  housing  professionals  and  homeowners  facing   foreclosure.  HCAs  are  almost  exclusively  private  non-­‐profits  that  rely  on  public  grant  funds   and  sometimes  by  developing  and  selling  affordable  housing  units.  HCAs  were  integral   promoters  of  the  federal  government’s  desire  to  expand  low-­‐  and  moderate-­‐income   homeownership  throughout  the  1990s  and  early  2000s  before  having  to  shift  almost   completely  to  foreclosure  prevention.  As  one  state-­‐level  administrator  explained  the  shift   to  me,  in  the  2000s,  “money  was  just  flowing  out  of  a  faucet.  Then  it  was  like  someone   turned  the  faucet  from  hot  to  cold.”  By  2010,  at  least  in  Michigan,  HCAs’  foreclosure   prevention  work  outpaced  their  new  homebuyer  work  at  a  rate  of  10  to  one.   HCAs  are  one  of  the  main  sites  for  the  everyday  maintenance  and  governance  of  the   foreclosure  crisis.  Governance  is  a  process  I  examine  at  state  and  non-­‐state  institutions   14   because  it  is  in  the  overlaps  and  incongruities  between  these  that  the  everyday  experiences   of  citizenship  manifest.  Following  political  economy  and  neo-­‐Foucauldian  scholars,  I   understand  housing  counseling  agencies  to  exhibit  hybrid  forms  of  power  that  emerge  in   the  nexus  between  the  state’s  governance  as  such  and  the  governing  roles  of  non-­‐profit  and   financial  institutions.  The  experiences  of  citizenship  I  am  interested  in,  therefore,  occur  in   the  junctures  where  these  institutions  compete  for,  enable,  and  challenge  each  other’s   claims  to  authority.     Albert  came  to  Franklin  Street,  the  primary  HCA  where  I  did  fieldwork,  after  he  had   fallen  behind  on  his  mortgage  payments.  He  had  injured  his  back  working  as  a  delivery   person  for  a  large  snack  manufacturer.  He  was  supporting  himself  with  Social  Security   disability  and  with  assistance  from  his  girlfriend  but  his  employer  had  denied  his  worker’s   compensation  claim.  According  to  the  housing  counselors  there,  in  conversations  they  had   with  me  and  other  clients  with  pending  worker’s  compensation  claims,  it  was  common   practice  for  claims  to  be  denied  on  the  first  round  and  only  granted,  if  then,  on  appeal.  He   was  already  involved  with  a  couple  of  state  functions,  then,  before  he  came  to  the  housing   agency.  The  agency  is  a  private  non-­‐profit  organization  but  receives  most  of  its  money  from   public  sources—namely  funds  from  the  U.S.  Department  of  Housing  and  Urban   Development  (HUD),  either  directly  received  or  channeled  through  the  Michigan  State   Housing  Development  Authority  (MSHDA).  Franklin  Street  is  certified  by  both  agencies,   which  participants  in  the  industry  understand  to  convey  a  level  of  seriousness  and   legitimacy  that  non-­‐certified  groups  lack.  Like  most  homeowners  facing  mortgage  default,   Albert  had  already  reached  out  to  his  lender  for  help  before  coming  to  the  counseling   agency  but  had  gotten  no  relief  from  them.  The  lenders  were  under  some  obligation— 15   because  of  HAMP  but  also,  and  maybe  more  significantly,  because  of  public  pressure—to   respond  to  distressed  homeowners.  They  were  operating  mortgage  relief  and  loan   modification  programs—in  however  piecemeal  or  lackluster  a  fashion—owing  to  the   efforts  of  the  federal  government.  Although  banks  had  severely  damaged  public  credibility   at  the  time  of  the  research,  they  laid  claim  to  legitimacy  precisely  through  their  outward   compliance  with  federal  programs  and  work  in  the  interest  of  homeowners.  Shortly  after  I   left  Michigan,  Chase  Bank  began  airing  a  series  of  nationwide  commercials  about  how  many   millions  of  homeowners  and  communities  they  helped.  Likewise,  many  lenders,  including   my  own,  put  contact  information  for  loss  mitigation  prominently  on  their  company   websites.  The  point  for  me  in  Albert’s  story  is  that  it  is  the  institutional  interdependence   that  makes  citizenship  less  about  legal  belonging  and  more  about  the  “messiness  of   everyday  life”  (Taylor  and  Wilson  2004).     To  insist  on  calling  a  relationship  with  a  bank  one  of  citizenship  insists  on   acknowledging  the  mutual  complicity  of  these  organizations—whether  one  prefers  to  label   it  as  a  Power  Elite  (Mills  2000),  plutocracy  (e.g.,  Krugman  2012a,  2012b;  Freeland  2012),   or  corporatocracy  (e.g.,  Perkins  2004;  Sachs  2011).  In  a  rather  Gramscian  sense,  I  am   arguing  for  a  form  of  governing  power  defined  by  a  state-­‐finance  conglomerate.  I  do  not   think  it  is  groundbreaking  to  argue  either  that  contemporary  governance  is  spread  among  a   suite  of  state  and  non-­‐state  institutions,  or  that  the  state  and  financial  institutions  are   mutually  complicit—indeed,  this  is  the  core  of  the  Marxist  critique  of  the  state  (Jessop   1990).  What  I  am  offering  is  a  grounded  analysis  of  what  it  is  like  to  live  as  a  subject  of  this   governing  complex  that  is  simultaneously  located  in  the  state,  civil  society,  and  market,  and   it  is  to  this  subjective  encounter  to  which  I  turn  in  discussion  of  the  American  dream.     16   Anthropology  of  Finance   By  examining  the  nexus  of  finance-­‐state-­‐citizenship,  my  research  also  advances  the   anthropological  literature  on  finance.  As  an  analytic  object,  finance  is  devilishly  tricky  to   pin  down  and,  in  large  measure,  this  is  the  point.  The  financial  industry  (or  financial   services)  encompasses  a  tremendous  range:  futures,  options,  asset-­‐backed  securities,  and   so  forth.  Their  key  uniting  feature,  though,  is  their  malleability—the  fact  that  these   activities  are  liquid  enough  to  quickly  convert  into  other  shapes  (Ho  2009)  or  be  infinitely   divisible  and  recominable  (Appadurai  2012).  Most  ethnographic  studies  of  finance  have   focused  on  financial  traders,  whose  daily  practices  and  identities  are  developed  and   evaluated  with  specific  reference  to  the  instruments  and  logics  of  financial  markets   (Zaloom  2006;  Miyazaki  2006;  Hertz  1998;  Ho  2005,  2009),  and  the  practices  that   economic  experts  use  to  represent  the  economy  in  numbers  and  words  (Neiburg  2006;   Holmes  2009).  Having  emerged  from  the  field  of  science  and  technology  studies,  this  body   of  literature  has  been  primarily  concerned  with  the  internal  practices  of  the  field  while   both  the  state  and  the  consumer  sides  were  largely  absent  from  view.4     Financial  institutions  and  the  state  have  different  objectives  in  some  ways.  In  bare,   glossed  form,  the  role  of  the  state  is  to  protect  while  that  of  finance  is  to  make  profits.   However,  they  have  certain  shared  interest  in  a  vibrant  national  economy,  which,  as  Wendy   Brown  argues  (2003)  has  become  the  singular  basis  for  the  state’s  legitimacy.  All  states   have  in  their  mandate  to  define  and  uphold  the  rule  of  law.  The  capitalist  state  is  inherently                                                                                                                   4  I  credit  my  understanding  of  this  genealogy  to  a  discussion  with  Caitlin  Zaloom  at  the   “Ethnography  of  Finance”  workshop  at  the  American  Ethnological  Society  meetings  in  New   York  on  April  19,  2012,  and  personal  communication  with  Annelise  Riles,  February  25,   2013.  For  recent  work  examining  how  market  actors  and  state  regulators  collaborate  to   create  market  governance,  see  Riles  (2011).   17   interested  in  upholding  contract  law  and  private  property,  that  is,  the  interests  of  capital.   As  such,  both  types  of  institutions  are  interested  in  cultivating  an  economically  motivated,   diligent,  and  loyal  subject.   Ethnographies  that  have  sought  to  investigate  the  effects  of  new  financial  regimes   beyond  the  realm  of  experts  have  found  that  such  changes  give  rise  to  new  social   categories,  identities  people  adopt  or  weigh  themselves  against.  They  have  given  rise  to,  for   example,  the  self-­‐responsible  risk-­‐taker  in  Japan  (Miyazaki  2006);  entrepreneurs  in  the   developing  world  (e.g.,  Elyachar  2005);  the  citizen  of  the  welfare  state;  and  its  converse,   the  citizen  charged  with  her  own  personal  responsibility  (Cruikshank  1999;  Rose  1996).     The  foreclosure  crisis  I  studied  would  not  have  occurred  had  it  not  been  for  the   spectacular  expansion  of  trading  in  mortgage-­‐backed  securities,  a  particular  kind  of   financial  derivative.  Derivatives  are  any  financial  instrument  that  gets  it  value  from  the   value  of  an  underlying  asset  (for  example,  mortgage-­‐backed  securities).  As  a  category  of   instruments,  derivatives  are  difficult  to  classify  because  their  continued  success  depends   on  innovation  and  novelty.  The  ability  to  earn  returns  with  speculative  capital  comes  from   exploiting  market  irregularities  and  responding  quickly  and  flexibly  to  emerging   conditions.  This  practice  did  not  emerge  until  1973  when  economists  made  innovations  in   abstracting,  quantifying,  and  calculating  risk.  The  resulting  flexibility  in  financial   movements  coincided  well  with  emerging  ideological  consensus  for  neoliberal  reforms,   including  liberalized  financial  markets.     A  collateralized  mortgage  obligation  (CMO),  a  type  of  security,  demonstrates  how   this  works:  A  CMO  is  composed  of  thousands  of  mortgages;  investors  buy  portions  of  this   18   “pool”  of  mortgages.5  As  has  been  well  rehearsed  in  the  financial  media  by  now,  a  pool  of   mortgage-­‐backed  securities  is  divided  up  into  tranches  (tiers)  based  on  calculations  of  the   risk  that  the  homeowners  attached  to  the  mortgages  underlying  the  security  will  default  on   their  loans.  At  the  height  of  the  housing  bubble  in  the  mid-­‐2000s,  the  average  new   mortgage  was  likelier  than  an  older  mortgage  to  be  given  to  a  borrower  with  a  higher  level   of  debt—making  it  harder  for  her  to  pay  back  the  loan—and  may  have  been  given  without   much  supporting  documentation  of  her  income  or  ability  to  pay  (e.g.,  HUD  2010;   Haughwout  et  al  2011).  Wall  Street  brokers  designed  mortgage-­‐backed  securities  that   pooled  together  thousands  of  these  marginal  loans,  often  aggressively  marketed,  and   argued  that  by  bundling  thousands  of  risky  loans  together,  the  whole  bundle  was  more   stable  than  its  constituent  parts  (Tett  2009;  cf.  Lewis  2009).     The  prevalence  of  financial  derivatives  and  naturalized  claims  about  them  mask  the   social  and  historical  conditions  of  their  own  production.  Derivatives,  then,  fit  the  Marxian   definition  of  a  commodity  fetish—that  is,  an  abstraction  of  social  processes  that  make  their   circulation  appear  to  be  “social  relations  between  the  products”  (Marx  1977).  Whereas   financial  experts  might  argue  that  derivatives  perfectly  represent  an  underlying  reality   (“out  there”),  LiPuma  and  Lee  forcefully  argue  that  scholars  shouldn’t  mistake  their   “surface  appearance”  for  their  true  nature.  Their  argument  echoes  others  that  the  economy   is  a  social  construction  that  doesn’t  just  represent  reality  but  is  constituted  by  the  efforts  of   theorists  and  professionals  in  it  (Mitchell  2002,  1998;  Callon  2007;  MacKenzie  and  Millo   2003;  De  Goede  2005;  Holmes  2009).  Or,  in  LiPuma  and  Lee’s  words,  derivatives  are                                                                                                                   5  Other  types  of  mortgage-­‐backed  securities,  such  as  “pass-­‐through  securities”  are  also   composed  of  pools  but  they  are  not  differentiated  by  level  of  risk.   19   “quasi-­‐performative”  (2004:60)  in  a  “sphere  of  circulation  that  they  simultaneously   presuppose  and  are  instrumental  in  creating”  (2004:186).     Broader  changes  also  call  out  for  the  study  of  finance’s  effects  out  in  the  world.  As   discussed  above,  Too  Big  to  Fail  is  an  obvious  linkage  not  only  for  investment  banks  but   also  for  corporations,  like  General  Motors,  that  survive  tough  times  through  government   intervention.  Corporations  have  invigorated  roles  as  both  power  brokers  and  citizens  in  the   body  politic  today.  Not  least  of  all,  the  Supreme  Court  ruling  in  the  2010  Citizens  United  v.   Federal  Election  Commission  codified  the  rights  of  corporations  as  persons,  entitled  to   unlimited  free  speech  in  the  form  of  unlimited  political  campaign  contributions.     Again  following  Mitchell  (1991),  my  intention  is  not  to  imply  that  every  interaction  with   finance  is  always  necessarily  also  an  interaction  with  the  state,  or  vice  versa.  But  in  their   macro  conditions,  these  types  of  institutions  are  necessarily  related  even  though  their   inter-­‐  and  independence  is  on  a  spectrum  from  closeness,  complicity,  conflict,  or  ignorance   in  particular  moments  or  interactions.  My  research,  though,  focused  on  areas  of  particular   closeness  and  muddiness  of  boundaries.  It  is  for  reasons  of  both  the  changing  relationship   between  state  and  finance,  and  the  rising  importance  of  the  latter,  that  I  argue  one’s   relationship  to  these  is  a  way  to  enact  a  citizenship,  to  which  I  now  turn.       Consumption  as  Citizenship   “Ask  not  what  your  country  can  do  for  you,  ask  if  that  shoe  comes  in  a  size  8.”     —  Tabletop  advertisement,  Lansing  mall  food   court,  fall  2008     20   Anthropology’s  interest  in  citizenship  has  historically  been  in  the  experiences  of   refugees,  stateless  persons,  or  “stranger”  citizens  who  have  formal  (de  jure)  rights  but  are   in  practice  (de  facto)  excluded  from  exercising  them  (Castle  2008;  Malkki  1995;  Ferme   2004;  Benhabib  2006;  Perez  2011).  Recent  flourishing  in  citizenship  studies  has  largely   been  dedicated  to  the  gaps  between  the  ideal  of  equal  citizenship  rights  and  the  reality  of   fractured  or  differentiated  citizenship  experiences,  based  on  one’s  minority  status.  In  the   United  States,  nothing  represents  the  struggles  to  close  the  gap  between  de  jure  and  de   facto  rights  better  than  African  Americans’  struggles  for  civil  rights  under  and  after   segregation  and  civil  rights  victories  of  the  1960s  (namely  Brown  v.  Board  of  Education,  the   Civil  Rights  Act,  and  Voting  Rights  Act)  (Jacobs  2000).     My  interest  in  citizenship  is  inspired  by  works  that  consider  citizenship  as  social   practice  rather  than  only  formal  relationships  and  state-­‐based  recognition  of  rights—much   in  the  same  way  my  interest  in  the  state  supersedes  state  institutions.  Here,  the  theoretical   insight  hinges  on  the  difference  between  formal  and  substantive  rights.  In  his  hallmark   study  of  citizenship,  T.  H.  Marshall  (1950)  analyzed  the  expansion  of  rights  (and   concomitant  shrinkage  of  duties)  in  the  history  of  British  citizenship,  expanding  from  civil   rights  into  political,  and  finally  social  rights.  This  sequential  expansion  of  rights  Marshall   describes  has  often  been  taken  up  in  the  literature  as  both  his  most-­‐cited  contribution  and   nearly  as  a  template  for  understanding  what  “should  be”  the  progression  of  new   democratic  states.     Marshall’s  primary  concern,  as  I  read  him,  was  with  the  inherent  tension  between   citizenship  and  capitalism,  making  his  work  in  the  best  tradition  of  political  economy.   Marshall  uses  a  formal  definition  of  citizenship  as  a  status  that  bestows  the  same  rights  and   21   duties  on  all  members  of  society—it  is  a  relationship  meant  to  create  equality.  Citizenship   will  always  be  at  odds  with  capitalism,  however,  because  capitalism  is  a  class  system  that   reproduces  material  inequalities.  What  I  take  away  from  Marshall,  then,  is  that  the  study  of   classed  experiences  can  be  the  study  of  subjectivity  tacking  back  and  forth,  like  state   strategies,  between  a  feeling  of  citizenship  and  of  oneself  as  an  individual  consumer  and   subject  exercising  free  choice  in  the  market  and  social  relationships.     In  arguing  for  facing  foreclosure  as  a  kind  of  citizen-­‐subjectivity,  I  have  been   particularly  inspired  by  anthropologists  studying  transitions  from  Communist  and  socialist   regimes  and  Latin  American  dictatorships,  to  democratic  and/or  more  capitalist  forms  of   governance  and  accumulation.  These  works  examine  daily  life  through  the  lens  of   substantive  rights,  or  the  social  practices  of  everyday  life  where  folks  are  in  interaction   with  explicitly  state  and  non-­‐state  entities,  other  subjects,  and  themselves  (Dagnino  2003;   Holston  and  Appadurai  1996).  Dagnino  elegantly  summarizes  the  case  for  citizenship  as   politics  to  deepen  democracy  beyond  formal  legal  rights  and  into  “a  project  for  a  new   sociability:  a  more  egalitarian  format  for  social  relations  at  all  levels,  new  rules  for  living   together  in  society  (2003:214,  original  italics).  Through  recognition  (by  activists  and   scholars  alike)  of  the  political  as  beyond  the  bounds  of  the  state,  citizenship  comes  to   “regulate  not  only  the  relationships  between  the  state  and  the  individual  but  also  social   relations  at  all  levels  of  society”  (ibid).     I  also  draw  on  Renato  Rosaldo’s  (1994)  notion  of  cultural  citizenship.  Based  on   work  with  politically  active  U.S.  Latinos,  Rosaldo  (1994)  and  colleagues  developed  the   concept  of  cultural  citizenship  as  “the  right  to  be  different  (in  terms  of  race,  ethnicity,  or   native  language)  with  respect  to  the  norms  of  the  dominant  national  community,  without   22   compromising  one's  right  to  belong,  in  the  sense  of  participating  in  the  nation-­‐state's   democratic  processes.”  In  the  cases  of  African  American  and  Latino  citizenship  in  the  U.S.,   the  emphasis  is  simultaneously  on  overcoming  second-­‐class  citizenship  treatment  through   fuller,  more  dignified  recognition  by  the  state.     For  Dagnino  (2003)  and  Holston  and  Appadurai  (1996)  in  Brazil  and  Rosaldo   (1994)  in  the  United  States,  these  expanded  notions  of  citizenship  are  inextricable  from   forms  of  emancipatory  politics.  As  originally  formulated  by  Rosaldo  (1994)  cultural   citizenship  is  a  form  of  collective  politics  that  minority  communities  engage  in  to  expand   their  access  to  rights  from  the  state,  as  both  formal  rights  and  the  pursuit  of  dignity  in   everyday  life.  For  this  project,  I  find  use  in  recalibrating  Rosaldo’s  (1994)  cultural   citizenship  to  refer  precisely  to  mainstream  American  belonging.  To  describe  this  as  a  kind   of  cultural  citizenship  is  to  point  to  the  usually  unmarked  practices  of  American  whiteness   and  middle-­‐classness  as  a  particular  form  of  belonging.  This  is  cultural  belonging  deeply   bound  up  in  the  history  of  whiteness  and  privilege  in  this  country,  but  which  recent   governmental  and  corporate  initiatives,  for  example,  in  the  push  for  expanded   homeownership,  have  tried  to  extend  as  a  universalizing  concept.     To  make  the  point  through  a  counter-­‐example:  it  is  straightforward  to  understand   efforts  to  cut  women  off  welfare  as  citizenship  activities,  because  it  is  about  changing  one’s   relationship  to  government,  away  from  a  dependency  citizenship.  People  that  have  not   been  on  government  aid,  though,  are  also  in  citizenship  relationships.  Precisely  by  not  using   these  services  they  are  being  an  ideal  kind  of  citizen  by  having  a  less  marked  economic   relationship  to  the  state.  This  is  a  middle-­‐class  citizenship  usually  only  marked  by  paying   taxes  and  by  the  fervent  courting  of  both  major  political  parties.  But  that  is  the  whole  point   23   about  the  middle  class—one  of  its  biggest  benefits  is  being  unmarked,  of  being  able  to   believe  that  you  achieved  everything  on  your  own  (Coontz  1992;  Maskovsky  2010).     In  order  to  consider  facing  foreclosure  a  citizenship  experience,  I  take  seriously  that   consumption  is  a  right  that  citizens  hold  dear,  not  only  a  “cheapening”  of  citizenship   through  neoliberalization  (cf.  Porter  2010).  In  this  regard,  I  have  found  especially  helpful   ethnographies  of  transitions  from  Communist  or  socialist  regimes  to  formal  democracy  and   market  economies  (Berdahl  2005;  Porter  2010;  Verdery  1998).  Consumption-­‐as-­‐ citizenship  is  particularly  visible  in  these  “learning  experience”  settings.  In  her  analysis  of   post-­‐reunification  East  Berlin,  Daphne  Berdahl  delineates  how  it  is  both  the  structural   relations  between  state,  citizen,  and  market  as  well  as  affective  dimensions  that  make   consumption  a  compelling  way  to  understand  citizenship:     The  analytical  utility  of  the  category  citizenship,  in  contradistinction  to  an   analytics  of  nationality  (although  the  two  are  obviously  closely  related)  lies   in  its  focus  on  the  public  sphere,  the  role  of  the  state,  as  well  as  on  questions   of  the  rights,  duties,  and  obligations  of  national  membership,  all  of  which   have  been  transformed  by  the  cultural  and  economic  dominance  of   consumption  and  the  market.     The  usefulness  of  citizenship,  Berdahl  continues,  is  that  is  spans  from  the  analysis  of  the   public  sphere  and  state  form  to  the  personal,  subjective  experiences  of  the  governed:       This  redefinition  extends  to  the  duties  and  obligations  of  citizenship  as  well.   Because  mass  consumption  is  linked  to  economic  prosperity,  responsibilities   of  citizenship  also  include  the  duty  to  consume—a  nation  of  shoppers.  It  has   also  significantly  transformed  the  role  of  the  state  in  providing  a  framework   for  private  consumption.  (237-­‐38)   As  I  have  outlined  above,  HCAs  and  foreclosure  mediation  programs  are  state  interventions   to  recast  the  terms  of  engagement  between  citizens  and  financial  institutions.     24   There  is  not  always  a  bright  boundary  between  citizenship  as  I  discuss  it  and  what   others  would  call  subjectivity  more  broadly,  nor  should  there  be.  Subjectivity  is  a  broader   way  of  talking  about  how  it  feels  to  be  placed  in  a  social  category,  to  have  an  identity  in   relation  to  others  in  the  world,  without  necessary  reference  to  the  state;  hence,  citizenship   is  a  particular  kind  of  subjectivity.  When  I  say  citizenship,  I  mean  something  more  akin  to   political  subjectivity,  agency,  and  selfhood—ways  of  learning  how  to  act  as  a  proper  subject   in  this  sociocultural,  political  economic  regime  (Cruikshank  1999).  Building  from  feminist   epistemology  and  Foucauldian  scholarship,  Barbara  Cruikshank  (1999)  argues  that  politics   is  located  beyond  a  narrowly  defined  public  sphere.  She  argues  that  “technologies  of   citizenship,”  including,  in  her  case,  women’s  self-­‐esteem  and  self-­‐help  projects,  are   inherently  political  because  they  enable  people  to  act  as  certain  kinds  of  citizens.  For   Cruikshank,  then,  the  self-­‐help  movement  is  political  because  it  cultivates  participants’   subjectivities  and  carries  with  it  presumptions  about  where  government  should  or  will   need  to  intervene  (Cruikshank  1999:54-­‐56).     That  facing  foreclosure  tacks  in  and  out  of  an  obvious  citizenship  register  is  entirely   consistent  with  and,  in  fact,  part  of  the  point  about  the  slippage  and  blurriness  between   what  is  and  is  not  statecraft  and  governance.  And  so  a  relation  of  citizenship,  as   responsibilities,  rights,  or  ideal  selfhood  (in  relation  to  oneself  or  the  community)  may   show  up  in  either  expected  or  unexpected  places.  In  the  relations  of  power  I  describe,  it   would  be  incoherent  if  the  experience  of  citizenship  were  simple  to  delineate  and  draw   boundaries  around.  Much  like  Mitchell’s  (1991)  approach  to  the  state,  I  take  the  elusive   character  of  citizenship  to  be  a  hallmark  of  the  present.  Where  is  the  state?  To  whom  is  it   responsible?  What  rights,  privileges,  and  responsibilities  does  a  citizen  of  such  an   25   amorphous  state  power  enjoy?  What  are  the  ideal  daily  and  personal  practices  of  a  citizen   of  this  regime?  What  is  the  experience  of  being  governed  and  acting  as  an  agent  in  this   political  economy?  As  emerges  in  the  ethnographic  chapters,  I  argue  that  the  answers  to   these  questions  are  inherently  tenuous  and  uncertain.     My  project  is  in  equal  measure  about  experiences  of  crisis  and  experiences  of   finance:  the  analysis  could  either  contribute  to  understanding  modes  of  crisis  citizenship  or   of  financial  citizenship.  Indeed,  both  are  at  work,  for  example,  when  housing  counselors   talk  about  the  decline  of  American  manufacturing  and  lament  that  their  clients  “are   desperate  [for  work],  it  just  doesn’t  matter…Just  give  me  something.”6  I  think  it  is  very   useful  to  link  together  larger  issues  together  through  the  prism  of  crisis  and  at  times,  I   adopt  Jeff  Maskovsky’s  (2012)  framework  of  “austerity  citizenship.”  In  austerity   citizenship,  citizenship  is  no  longer  about  rights  and  responsibilities  but  about  who  should   be  required  to  make  sacrifices.  In  a  longer  view,  though,  I  argue  that  my  project  helps   define  an  understanding  of  financial  citizenship.  Financial  citizenship  implies  an  analysis  of   both  the  state  form  and  the  subject.  This  perspective  brings  together  work  on   financialization  as  a  political  economic  movement  and  of  the  growing  subjective   importance  of  finance  as  a  self-­‐making  activity.  The  latter  encompasses  issues  like  taxpayer   politics  (Roitman  2004;  Abramovitz  and  Morgen  2006),  the  sociopolitical  importance  of   credit-­‐scoring  (Poon  2009),  movements  for  economic  inclusion,  banking  the  unbanked,   concern  over  financial  institution  “deserts”  (like  inner  cities)  where  only  predatory  payday   lenders  operate,  and  other  movements  that  take  one’s  distance  from  financial  institutions   to  be  a  proxy  for  full  enfranchisement.                                                                                                                     6  Interview,  Katrina,  April  13,  2011,  Lansing,  Michigan.   26   Although  it  is  clear  that  the  Great  Recession  has  intensified  the  state’s  demands  for   public  sacrifice  (Maskovsky  2012),  it  is  not  totally  clear  what  the  emerging  social  contract   looks  like,  though  I  present  facets  of  this  post-­‐crisis  citizenship  through  examinations  of   encounters  with  finance,  the  state,  and  non-­‐profits  I  describe  in  the  following  chapters.   While  much  research  is  appearing  regarding  the  material  costs  of  the  foreclosure  crisis  and   the  merits  (or  demerits,  depending  on  one’s  view)  of  homeownership,  this  dissertation  is   about  the  specific  efforts  of  a  small  group  of  people—homeowners  threatened  with   foreclosure  and  the  housing  counselors  to  whom  they  turn  for  help—trying  to  salvage   homeownership  and  other  ideas  about  middle  class  respectability  in  a  historically   significant  place  for  America’s  class  project.       Consumption  and  the  American  Dream  of  Citizenship   Lastly,  to  insist  on  citizenship  as  a  relation  to  the  state,  market,  and  other  moral   subjects  is  also  consistent  with  the  American  dream  mythology.  The  American  dream  is  a   template  for  citizenship  as  pursuit  of  the  good  life—not  only  in  relation  to  the  state,  but   also  in  moral  relationships  with  others,  especially  the  family,  and  defined  by  a  particular   kind  of  consumption.  Culturally,  the  American  dream  narrative  establishes  a  moral  order   that  defines  what  we  owe  to  those  around  us  and  what  is  owed  to  us  in  return  (Dudley   1994).  Ortner  summarizes  it  as  belief  “in  a  kind  of  decent  life  of  work  and  family,  in  the   worth  of  the  'individual'  and  the  importance  of  'freedom,'  and  [to]  strive  for  a  moderate   amount  of  material  success"  (2006:71).  The  individual  conjured  up  in  this  narrative  is  a   person  who  not  only  works  hard  but  also  copes  with  adversity  and  accepts  responsibility   for  her  or  his  situation  (McGinnis  2009).  In  return,  individuals  should  expect  to  achieve  a   27   work  life  that  enables  them  to  provide  a  stable  and  comfortable  family  life  for  their   children,  with  a  single  family  detached  home  symbolizing  what  is  meant  by  decent  family   life.  For  most  of  the  twentieth  century,  the  American  dream  linked  homeownership  to  full   membership  in  liberal  democracy  and  a  production-­‐based  economy  where  industrial,   union  labor  had  high  social  value.  Michigan’s  autoworkers  were  seen  as  most   representative  of  the  American  dream  (Chinoy  1992).     The  American  dream  is  a  meta-­‐narrative  that  defines  the  United  States  as  a  nation  of   equal  opportunity  for  all,  where  anyone’s  hard  work  will  be  rewarded  commensurately.  It   valorizes  a  specific  kind  of  individual:  one  who  is  diligent,  self-­‐sufficient,  optimistic,   resilient,  ambitious,  and  can  afford  material  goods.  This  is  a  meritocracy  where   hardworking  individuals  deserve  success  and  can  expect  increasing  class  status;  in  an   accepted  contradiction,  they  also  expect  to  pass  on  their  higher  status  to  their  children.   Like  other  master  narratives,  the  American  dream  condenses  layers  of  meaning  into  one   archetypal  story  that  represents  a  whole,  if  contradictory,  worldview.  Master  narratives   provide  moral  order  to  the  world  and  the  means  to  understand  ourselves  as  coherent   individuals  acting  in  that  world  through  time.  Through  personal  narratives,  we  link   ourselves  to  the  larger  narratives  and  moral  order  of  society  and  the  nation-­‐state  (Cohen   2003;  Frederick  2010).7  Yet,  like  other  founding  social  myths,  the  American  dream  has   proven  for  most  Americans  to  be  more  of  a  myth  than  reasonable  expectation  (Chinoy                                                                                                                   7  Cohen  (2003)  argues  that  “interiorization  of  an  ideal  underpins  social  and  political   consciousness  in  a  moment  of  historical  transition”  (172)  marked  by  changing  ideals  and   norms.  Frederick  (2010)  demonstrates  new  ways  Americans  identify  with  the  rags-­‐to-­‐ riches  story:  African  American  women  watch  African  American  and  white  televangelists   present  their  own  rags-­‐to-­‐riches  stories  as  a  reward  for  their  faith.     28   1992;  Davis  1986).  Failure  to  achieve  class  mobility  has  historically  been  understood  to  as   a  result  of  personal  rather  than  structural  factors.       Consumption  has  been  a  central  qualitative  experience  of  the  good  life  in  America   since  the  mass  extension  of  consumer  credit  in  the  1920s  placed  mass  consumption  in   reach  of  more  Americans.  Indeed,  "by  the  1920s  a  new  ethos  was  widespread.  As  a   newspaper  in  Muncie,  Indiana,  editorialized:  "‘The  American  citizen's  first  importance  to   his  country  is  no  longer  that  of  citizen  but  that  of  consumer’"  (Coontz  1992:170).  Houses   and  mortgages  are  over-­‐signified  in  these  dynamics.  The  house  represents  a  commitment   to  be  in  social  relations  in  a  particular  place;  a  mortgage,  one’s  consent  to  participate  in   larger  political-­‐economic  processes.  Further,  in  times  of  economic  and  social  crisis,   Americans  make  a  collective  turn  to  the  home  as  a  safe,  secluded,  and  moral  space  (May   2008;  Coontz  1992)  and  more  recently  to  gated  communities  to  hold  at  bay  a  suite  of   perceived  threats  to  a  safe  middle-­‐class  lifestyle  (Low  2003).  Homeownership  conveys   higher  status  than  renting  because  the  mortgage  contract  "puts  the  homebuyer  in  the   position  of  permanent  debtor,  in  contrast  to  the  renter  who  is  free  from  any  obligations  at   the  end  of  the  lease  term"  (Perin  1977:72).  Perin  continues:     These   ties   of   indebtedness   are   also   political,   for   in   allowing   access   to   debt   there   is   created   'a   generalized   gift   not   directly   requited,   compelling   a   loyalty'   to   the   banker   and   to   the   public   institutions   whose   rules   and   norms   frame   his   (most  often  his)  actions.  (76,  citation  omitted)     The  “political  gifts”  of  ownership  (Maskovsky  2010)  compel  homeowners’  loyalty  to  public   and  financial  institutions—thereby  forming  homeowners  into  model  citizens.     As  early  as  the  1910s,  Ely  Chinoy  observed  that  autoworkers  in  Lansing  fixated  their   most  intense  desires  on  homeownership  (Chinoy  1992:90,  126).  Home  owning  sacrilizes   symbolizes  middle-­‐class  stability,  propriety,  and  privacy,  along  with  the  racial  (white)  and   29   gendered  (heteronormative)  assumptions  of  this  class  position.  In  her  groundbreaking   analysis  of  the  cultural  determinants  of  American  land  use,  Constance  Perin  (1977)  argued   for  the  primacy  of  the  ideology  of  home:     The  family  'is  a  sacred  institution  and  the  fundamental  institution  of  our   society.'  The  family  and  the  good  citizenship  that  homeownership  is  believed   to  instill  are  equally  idealized  and,  thereby,  equated.  A  sacred  quality  endows   both  the  family  and  its  'home,'  sacred  in  the  sense  of  being  set  apart  from  the   mundane  and  having  a  distinctive  aura.  …[I]f  one  engages  in  'competition'   and  'gets  ahead,'  then  one  can  achieve  the  ideal  family  existence,  fulfilling   both  the  American  dream  and  the  American  Creed.  Any  other  residential   dwelling…is  a  “compromise”  with  those  ideals  (Perin  1977:47).   In  times  of  socioeconomic  crisis,  social  reformers,  ordinary  Americans,  authors,  grassroots   organizers,  among  others  turn  to  the  family  as  a  bulwark  against  crisis.  Domesticity  is  a   middle  class  ideal  because  it  implies  that  a  man  in  the  household  is  earning  a  family  wage   that  can  support  a  wife  in  full  time  home  production  (Gordon  1994;  Coontz  1992).  Even   when  men  do  not  earn  a  family  wage  and  their  partners  work  for  wages,  Americans   associate  women  with  middle  class  values,  because  of  their  linkage  with  domesticity  and   non-­‐physical  labor,  and  men  with  the  working  class  (Halle  1984;  Ortner  2006).  Crises  of   class  and  family  are  also  then  crises  about  women’s  propriety.  Throughout  the  country’s   history,  Americans  have  perennially  “rediscovered”  family  values  politics  in  times  of   change:  notably,  Coontz  (1992)  finds  that  the  Industrial  Revolution,  the  Gilded  Age,  and  the   Cold  War-­‐era  nuclear  family  were  all  moments  when  Americans  turned  to  the  home  as  a   refuge  against  external  threats  to  the  moral  order  they  understood.  "The  desire  for  the   single-­‐family  home  as  a  refuge  against  a  chaotic  world  was  not  a  postwar  creation.  Indeed,   it  dates  back  to  housing  reformers  of  the  nineteenth  century  who  first  articulated  the   suburban  family  ideal.  But  it  achieved  new  vigor  in  the  postwar  years,  largely  because  the   30   ideal  was  now  within  reach  of  most  middle-­‐class  and  many  working-­‐class  Americans"  (May   2008:164).       The  Promotion  of  Homeownership   Since  at  least  the  1920s,  American  mythologies  and  policies  promoting  ownership   have  equated  homeownership  with  the  highest  level  of  social  belonging,  that  is,  with  full   citizenship  (Perin  1977).8  Owning  a  single  family,  detached  dwelling  so  thoroughly  became   the  outward  evidence  of  the  American  dream  that  by  the  1950s,  the  American  dream   became  equal  to  homeownership  (Cullen  2003).  The  car  and  the  detached  suburban  home   are  emblems  of  the  post-­‐war  American  dream  of  affluence,  with  the  upward  mobility  of   Michigan’s  blue-­‐collar  autoworkers  attesting  to  the  dream’s  accessibility  to  anyone  willing   to  work  hard.9  Yet,  access  to  the  dream  of  homeownership  has  been  restricted  by  and  has   reinforced  preexisting  lines  of  inclusion  and  exclusion.  Best  known  among  these  are  low-­‐ interest  Veterans  Administration  loans  instituted  after  World  War  II  to  promote   homeownership  by  veterans  in  the  growing  suburbs  (and  which  continue  today)  and  its   infamous  corollary  of  redlining  majority  African  American  neighborhoods  by  the  Federal   Housing  Authority  (FHA)  and  private  lenders,  and  the  application  of  exclusionary  racial   covenants  and  blockbusting  techniques  (on  covenants  and  blockbusting  see  Sugrue  1996).                                                                                                                     8  Cullen  (2003)  considers  the  association  of  citizenship  and  homeownership  to  have  begun   with  the  Homestead  Act  of  1860.  Others  might  consider  the  association  to  have  begun  with   the  restriction  of  citizenship  to  white  male  property  owners.   9  Even  if  the  dream  was  not  born  out  by  the  limited  options  for  upward  mobility  offered  by   life  in  the  factory  (Chinoy  1992).   31   For  the  first  half  of  the  twentieth  century,  especially  just  after  World  War  II,  the  auto   industry  as  a  whole  stood  for  the  citizenship  of  welfare  capitalism:  members  of  the  working   class  were  able  to  enter  the  middle  class  through  relatively  high  wages,  mass  consumption,   collective  bargaining  agreements,  and  the  Cold  War  ideology  of  containment  that  led  the   federal  government  and  corporations  to  support  welfare  capitalist  policies  (Fine  2004;  May   2008;  Harvey  1989;  Gramsci  1971).  Yet,  even  in  these  halcyon  days,  Ely  Chinoy  found  that,   contrary  to  the  promise  that  a  factory  job  would  lead  workers  to  a  higher  class  standing,   contrary  to  the  idea  that  they  could  “get  ahead”  through  that  work,  auto  work  in  mid-­‐ century  Lansing  was  precarious.  Workers  had  not  become  urban  and  self-­‐sufficient   through  factory  work  but  often  left  the  factory  during  summer  shutdowns  to  tend  farms   that  provided  an  additional  livelihood.  Workers  did  engage  in  their  own  American   dreaming,  often  to  leave  the  factory  and  strike  out  in  business  for  themselves.  But  that  was   a  remote  possibility  for  most.  Instead,  autoworkers  translated  the  American  dream  into  a   basic  level  of  financial  security,  being  able  to  own  their  own  homes  and  pay  all  their  bills.   While  the  myths  and  marketing  of  the  auto  industry  fueled  Americans’  citizenship   desires,  the  federal  government’s  actions  made  helped  make  single  family  homeownership   more  accessible.  Cars  enabled  the  postwar  suburban  housing  boom  by  making   transportation  from  outside  the  urban  center  affordable  for  more  Americans  (Cullen  2003).   The  federal  government  financed  this  suburban  expansion  through  billions  of  dollars  of   infrastructure  improvement,  laying  roads  and  sewers,  and  subsidizing  Veterans   Administration  (VA)  loans  to  white  veterans  while  investing  in  cities  at  a  fraction  of  the   rate  and  excluding  large  portions  from  any  VA  or  Federal  Housing  Authority  or  Housing   32   and  Urban  Development  Funding  because  of  the  policy  of  redlining  minority   neighborhoods  (May  2008;  Sugrue  1996).     In  the  wake  of  the  civil  rights  movement  and  grassroots  organizing,  Congress  passed   a  series  of  housing  policies  as  part  of  Great  Society  initiatives  to  decrease  racial  and  wealth   disparities.  Title  VI  of  the  Civil  Rights  Act  establishes  that  “no  government  benefit  may  be   provided  on  a  discriminatory  basis,  including  any  of  those  provided  through  the  programs   of  the  U.S.  Department  of  Housing  and  Urban  Development,  as  in  federal  mortgage   insurance,  housing  subsidies,  urban  renewal  and  community  development  funds”  (Perin   1977:7).  I  understand  the  Community  Reinvestment  Act  (CRA)  of  1977  and  subsequent   bills  to  promote  equal  credit  opportunity  for  low  income  and  minority  borrowers  as  efforts   to  extend  liberal  citizenship  to  more  potential  homebuyers.     With  the  global  turn  to  neoliberal  policies  begun  in  the  1970s,  governments  have   been  especially  keen  to  enhance  private  property  rights  and  consolidate  the  advantages  of   ownership.  In  other  countries,  this  has  manifested  as  massive  campaigns  to  “normalize”   squats  and  informal  settlements—either  by  razing  them  for  illegal  occupation  of  public   lands  (Amouroux  2009)  or  by  parceling  and  issuing  legal,  individual  titles  to  homesteaders   (Holston  2008;  Mansfield  2007;  see  also  Soto  2000).  The  long  history  of  aspirations  for   homeownership  in  the  United  States  has  meshed  easily  with  neoliberal  policies  that   privilege  private  property  rights.     It  is  well  known  that  inflation-­‐adjusted  wages  have  been  stagnant  since  the  1970s,   inequality  is  increasing,  and  that  class  mobility  is  much  more  limited  than  the  national   “meritocracy  myth”  portrays.  Nationally,  Americans  have  kept  the  façade  of  middle-­‐class   status  by  going  deeper  into  consumer  debt  (Williams  2004;  Reich  2010).  Policymakers,   33   financial  planners,  media  commentators,  and  more  have  promoted  homeownership  as  one   of  the  safest—and  most  American—ways  of  building  wealth.  In  lieu  of  higher  wages  or   more  progressive,  equalizing  taxation,  Americans  have  been  encouraged  to  overcome   structural  inequalities  through  their  personal  investment  choices.  The  1986  Tax  Reform   Act,  for  example,  exacerbated  the  material  difference  between  renting  and  owning  by   eliminating  the  tax  credit  available  for  paying  credit  card  interest  while  preserving  the   deduction  for  mortgage  interest  (Williams  2004:  58).  This  tax  credit  constitutes  the  single   biggest  federal  subsidy  promoting  homeownership  over  renting.  Both  Democratic  and   Republican  administrations  have  promoted  homeownership  as  key  to  upward  mobility  and   a  model  for  citizenship.  The  Clinton  administration  was  especially  concerned  with   extending  homeownership  to  poor  and  minority  borrowers  as  evidence  emerged  that,  in   spite  of  the  1977  Community  Reinvestment  Act,  minority  applicants  and  all  women  were   more  likely  to  be  rejected  for  a  mortgage  or  receive  loans  with  predatory  terms  (Munnell,   et  al  1992;  Avery,  Beeson,  and  Sniderman  1993;  Immergluck  2009).  George  W.  Bush’s   “ownership  society”  advocated  personal  control  of  health  care,  parental  control  of  their   children’s  school  choice,  and  a  privatized  retirement  system  because  of  an  inherent   skepticism  of  government  provision  and  drive  toward  privatization,  but  also  because   ownership  was  presumed  to  give  individuals  “more  dignity,  more  pride,  and  more   confidence”  (Boaz  n.d.).       The  driving  force  of  the  2002–2007  housing  bubble  was  not  dignity  nor  inclusion,  but   profit.  Among  the  many  factors  contributing  to  the  “perfect  storm”  of  the  housing  crisis   were  the  growth  of  increasingly  complex  mortgage-­‐backed  securities  and,  second,  the   increasing  role  played  by  mortgage  brokerage  firms  not  subject  to  the  same  regulatory   34   standards  as  depository  institutions.  First,  after  the  dot-­‐com  stock  market  bubble  burst  in   the  late  1990s,  investors  were  seeking  new  vehicles  to  replace  technology  stocks,  on  which   they  could  earn  high  returns—and  found  such  an  opening  in  the  residential  mortgage-­‐ backed  securities  (MBS)  market.  Housing  prices  had  been  rising  since  1997  and  history   seemed  to  indicate  that  prices  would  continue  rising  indefinitely  (Shiller  2008).  Investors’   demands  for  more  MBS  drove  down  underwriting  standards  at  brokerage  firms,  which  in   turn  aggressively  marketed  subprime  and  exotic  loans  (Immergluck  2009;  Shiller  2008;   HUD  2010;  Saegert,  Fields,  and  Libman  2009).  When  derivatives  markets  are  working  as   intended,  derivatives  are  financial  tools  that  respond  to  some  underlying  condition  in  the   economy;  during  the  housing  bubble,  this  was  inverted  as  investment  demands  changed   the  fundamental  economic  conditions—namely  underwriting  standards  and  mortgage   origination  (Immergluck  2009).       Second,  regulatory  gaps  and  failures  allowed  a  diverse  array  of  mortgagees  (mortgage   originators)  to  lower  underwriting  standards,  aggressively  market  subprime  loans.  Banks   are  regulated  by  the  Office  of  the  Comptroller  of  the  Currency  or  Office  of  Thrift   Supervision,  if  they  have  national  or  state  charters,  respectively;  they  are  also  regulated  by   the  Federal  Deposit  Insurance  Commission  and  Federal  Reserve.  Because  they  are  not   banks  with  deposits,  mortgage  brokerage  firms  are  not  subject  to  the  CRA  and  other   oversight  and  lending  standards  applicable  to  banks.  Immergluck  (2009)  argues  that   during  the  most  recent  housing  bubble,  the  Federal  Reserve  was  in  the  best  position  to   regulate  mortgage  brokers  but  did  not  because  of  wanting  to  be  “industry-­‐friendly.”  During   the  bubble,  mortgage  brokers  originated  fully  half  of  all  new  loans.  Other  lenders,  including   the  government-­‐sponsored  Fannie  Mae  and  Freddie  Mac,  followed  subprime  lenders’  lead   35   into  lower  underwriting  standards  in  hopes  of  maintaining  market  share  (HUD  2010;  FCIC   2011).  By  the  peak  of  the  housing  bubble  in  2006,  just  over  half  (51  percent)  of  new   mortgages  were  “low-­‐documentation”  loans  and  average  debt-­‐to-­‐income  ratio  had  risen  to   42  percent,  compared  with  a  historical  benchmark  of  30  percent  (Immergluck  2009:86).   Because  mortgage  originators  were  going  to  sell  off  the  loans  to  investors,  brokers  and   lenders  earned  their  money  not  by  the  loan’s  repayment,  but  through  origination  fees  and   other  upfront  costs,  giving  them  incentive  to  sell  more  expensive  (subprime)  loans.  And   because  originators  had  no  material  stake  in  their  performance—no  “skin  in  the  game”— giving  risky  loans  was  not  risky  to  the  originators,  but  to  homeowners  saddled  with   unaffordable  debts  and  the  investors  to  whom  they  were  owed.     For  consumers,  this  bubble  eased  access  to  the  American  dream  of  homeownership— and  added  the  appealing  promise  of  getting  ahead  quickly  because  of  rising  house  values,   while  simultaneously  increasing  household  debt  to  a  historic  high  of  133  percent  of   disposable  income  (Porter  2012:4).  Nationally,  homeownership  peaked  in  2004,  at  69.2   percent.  Median  housing  prices  nationally  peaked  in  March  2007,  at  $262,600,  up  37   percent  from  just  one  year  earlier.  Price  increases  were  already  slowing,  however,   compared  with  their  exponential  growth  from  2003–2006.  Out  of  necessity  and  on  the   advice  of  lenders,  many  with  adjustable  rate  mortgages  (ARMs)  refinanced  these  loans  just   before  they  would  reset  at  higher  interest  rates,  adding  yet  more  fuel  to  the  investment  fire   by  generating  a  new  loan  to  be  sold.  When  price  rises  stalled,  homeowners  were  not  able  to   continue  this  strategy  and  they  began  defaulting.  Since  then  more  holders  of  prime   mortgages  have  defaulted  due  to  the  Great  Recession—sparked  by  the  housing  bust—but   recognized  as  a  cross-­‐sector  recession  in  December  2007.  Real  estate  analysts  estimate   36   there  have  been  approximately  four  million  completed  foreclosures  since  2007  and  that   there  will  be  at  least  three  million  more  delinquencies  resolved  through  foreclosure,   distressed  sale,  or  work-­‐out  plan  through  2013.       Situating  Michigan  in  the  Foreclosure  Crisis   “Michigan  represented  the  embodiment  of  the  great  American  Middle  Class.  …[But]  when   the  bottom  fell  out  of  the  national  housing  market  and  our  financial  system  in  2008,  no  one   felt  the  pain  more  than  Michigan.”     —  Shaun  Donovan,  Secretary  of  United  States   Department  of  Housing  and  Urban  Development     “The  Cities  that  Built  America”     The  banquet  hall  in  Lansing’s  downtown  convention  center  was  dimly  lit  as  I  tried  to   maneuver  toward  a  table  to  listen  to  HUD  Secretary  Shaun  Donovan  give  keynote  remarks   at  the  2010  Michigan  Conference  on  Affordable  Housing.  About  1,500  housing  counselors,   elected  officials,  housing  program  administrators,  real  estate  developers,  and  homeless   service  providers  were  gathered  for  the  conference  in  Lansing,  the  state’s  capital.  The   convention  center  occupies  central  real  estate  downtown,  fronting  the  Lansing  River  Trail,   drawing  pedestrians  and  cyclists  into  downtown’s  redeveloped  spaces.  Just  north  of  the   convention  center  is  the  Lansing  City  Market,  one  of  the  oldest  farmers  markets  in  the   country,  attesting  to  Lansing’s  perennial  identification  with  the  surrounding  countryside.   At  the  time,  the  original  market  building  had  just  been  demolished  and  was  being  replaced   by  a  new  corrugated  steel  barn:  from  the  Old  Town  business  district  northeast  of   downtown,  to  REO  Town  to  its  south,  and  the  revamped  market,  the  city  was  avidly  in  the   throes  of  reinventing  itself  within  its  past.     37   Across  the  river  from  the  convention  center  lies  an  art  deco  power  plant  that  had  just   undergone  conversion  to  an  insurance  company’s  corporate  headquarters.  Beyond  that,  the   19th-­‐century  capitol  building  dome  protrudes  skyward.  From  the  deck  of  the  convention   center,  the  city’s  historical  economic  incarnations  seemed  to  march  toward  the  observer— from  Lansing’s  nearly  accidental  selection  as  the  seat  of  state  government  in  1847,  to  a   period  of  industrial  grandeur  in  the  early  twentieth  century,  through  unmarked,   unmemorialized  deindustrialization,  detectable  in  the  architecture  of  redevelopment  and   reinvention.  Indeed,  the  eastward  view  from  the  convention  center  almost  seemed  to   actualize  city  boosters’  narratives  of  progress  and  inevitable,  if  not  easy,  triumph.   But  at  the  time,  April  2010,  Lansing,  along  with  the  rest  of  the  state,  was  five  years  into   a  different  kind  of  urban  restructuring—a  foreclosure  crisis  during  which  foreclosures  had   increased  two-­‐and-­‐a-­‐half  times  (Isley  and  Rotondaro  2012).  Making  matters  worse  for   Michigan,  General  Motors  declared  bankruptcy  in  2009.  The  state  of  Michigan  faced  budget   shortfalls  in  2009  and  2010  but  because  of  a  balanced  budget  constitutional  amendment,   they  had  to  be  reconciled,  which  was  achieved  largely  through  furloughs  and  layoffs  of   state  workers  and  the  reduction  of  health,  corrections,  and  education  funding.  Michigan   registered  the  highest  unemployment  rate  in  the  nation  and  among  the  highest  rates  of   foreclosure.     As  HUD  Secretary  Donovan  took  the  podium  at  the  Michigan  Affordable  Housing   Conference,  a  few  hundred  housing  professionals  were  eating  at  linen-­‐topped  tables  and   milling  around  the  edges  of  the  banquet  hall.  I  was  in  the  middle  of  fourteen  months  of   ethnographic  fieldwork  on  foreclosure  and  foreclosure  intervention  programs  in  Lansing   and  surrounding  areas.  In  large  part,  this  consisted  of  participant  observation  at  HCAs  in   38   Lansing  where  distressed  homeowners  sought  help  from  counselors  to  negotiate  with  their   lenders  in  hopes  of  avoiding  foreclosure.  I  scanned  the  room  trying  to  find  some  of  the  ones   I  knew  but,  failing  that,  I  joined  a  table  near  the  back  of  the  hall  where  a  group  of  colleagues   from  western  Michigan  were  eating  together.  Secretary  Donovan  took  the  stage  and  in  his   remarks,  reinforced  the  deep  intertwining  of  Michigan’s  industrial  past  with  the  current   foreclosure  crisis  and  efforts  to  figure  out  revised  terms  for  middle  class  American   citizenship  in  the  wake  of  the  Great  Recession:   I  want  to  talk  about  the  challenges  this  state  faces…And  above  all,  I  want  to   talk  about  our  commitment  to  helping  rebuild  the  cities  that  built  America…     Everyone  here  recognizes  what  Michigan  has  meant  to  America—this  state   was  a  symbol  of  what  made  America  great  in  the  20th  century.     That  famous  Charles  Erwin  Wilson  line—"What's  good  for  General  Motors  is   good  for  the  country"—may  have  turned  out  to  be  a  bit  of  a  misquote—but   the  point  is  clear:     Michigan  represented  the  embodiment  of  the  great  American  Middle  Class.     It  was  central  to  the  very  American  idea  that,  no  matter  who  you  were,  if  you   were  willing  to  work  hard  for  a  living,  you  could  earn  a  decent  wage,  retire   with  dignity  and  pass  on  a  better  life  to  your  children.       In  this  excerpt  of  his  remarks,  Secretary  Donovan  reinforced  the  national  mythologizing  of   the  auto  industry  as  the  heart  of  the  twentieth  century  American  dream.  Donovan’s   comments  glossed  over  the  much  longer  history  of  deindustrialization  in  Michigan’s  central   and  eastern  cities,  and  the  state’s  economic  and  regional  diversity.  Lansing,  for  example,   has  a  diverse  economy,  marrying  the  historical  importance  of  government,  education,  and   manufacturing  with  more  recent  growth  in  retail,  entertainment,  and  service  sectors.  From   2007-­‐2011,  the  latest  statistics  available,  education,  healthcare,  and  social  assistance  was   the  largest  employment  sector  (25%),  followed  by  retail  (12%),  manufacturing  (11%),  arts,   39   entertainment,  and  food  service  (11%);  professional,  scientific,  management,  and  waste   management  occupations  (10%);  and  public  administration  (9%).  Western  Michigan’s   industrial  history  has  been  distant  from  automobiles,  being  more  connected  to   pharmaceuticals  and  furniture  making.  Northern  and  western  Great  Lakes  coastal   communities  are  heavily  involved  in  tourism.  Northern  Michigan  also  has  forestry  and  a   large  corrections  industry,  where  high-­‐security  prisoners,  often  men  of  color,  are  sent  to   rural,  overwhelmingly  white  communities  for  incarceration.   The  framing  of,  and  elisions  in,  Donovan’s  comments  are  crucial  to  understanding   what  is  understood  by  a  broad  suite  of  actors—distressed  homeowners,  consumer   advocates,  activists,  policymakers,  politicians—to  be  at  stake  in  the  foreclosure  crisis  in   Michigan.  History  and  nostalgia,  therefore,  figure  prominently  in  my  analysis  of  how   foreclosures  affect  citizenship.  Michigan  is  a  particularly  salient  place  for  discussing  the   meanings  of  class—specifically  the  project  of  making  America  middle  class  (the   terminology  comes  from  Ortner  2003).     From  the  podium,  Donovan  continued  his  historical  tour  through  Michigan’s  rise   and  fall:   Of  course,  while  that  story  may  have  begun  in  cities  like  Detroit,  Flint  and   Lansing,  it  didn't  end  here.  It  was  repeated  in  cities  across  the  Midwest—in   steel  mills  in  Pittsburgh,  in  Cleveland,  in  Gary,  Indiana.     And  make  no  mistake:  it  was  here  in  Michigan's  auto  plants  that  we  saw  the   promise  of  America—and  some  of  the  first  desegregated  workplaces  in   America,  creating  good  jobs  for  tens  of  thousands  of  African  Americans.       Indeed,  for  many,  getting  your  first  job  at  the  Big  Three  was  "getting   baptized"—that  first  step  up  the  economic  ladder  toward  the  American   dream.       But  of  course,  we  all  know  how  that  Dream  was  eroded  these  last  several   years…when  the  bottom  fell  out  of  the  national  housing  market  and  our   40   financial  system  in  2008,  no  one  felt  the  pain  more  than  Michigan.  (Donovan   2010)     As  the  birthplace  of  the  American  auto  industry  and  strongest  labor  union,  Michigan’s  mid-­‐ century  history  has  been  emblematic  of  the  possibility  of  the  blue-­‐collar  middle  class,   upward  mobility,  economic  and  social  inclusion  for  African  Americans  and,  all  told,  the   prototype  of  the  good  life  in  America.  In  its  struggles  to  resist  and  redefine  itself  post-­‐ industrially—and  now,  with  foreclosures  and  infamously  “shrinking  cities”—Michigan  is  a   place  that  can  inform  us  not  only  about  the  anxieties  of  the  current  crisis  but  also  about   deeper,  more  historically  rooted  anxieties  about  the  meaning  of  class,  political  subjectivity,   and  other  cultural  projects  in  America.  It  is  to  those  dynamics  of  history  and  nostalgia  that  I   return  in  chapter  3.  In  the  rest  of  this  section,  I  provide  context  on  the  foreclosure  crisis   that  began  in  Michigan  in  2005,  then  introduce  my  data  and  methods.         The  Context  of  Local  Foreclosures   Michigan  was  the  only  state  in  the  country  to  lose  population  between  the  2000  and  2010   Censuses.  Lansing  lost  4.5  percent  of  its  population,  measuring  in  at  114,297  (Table  1).  In   Detroit,  the  loss  was  a  devastating  25  percent,  exacerbating  the  abandonment  of  once-­‐ thriving  African  American  neighborhoods,  in  some  areas  leaving  two  or  three  occupied   houses  standing  on  a  block  amid  neglected  and  decaying  houses  or  empty  lots  where  the   city  has  razed  abandoned  houses  as  dangers  to  public  safety  (e.g.,  Bergmann  2008).  During   the  time  of  my  research,  Detroit  “ruin  porn”  flourished  online  and  in  print  media,  attesting   to  the  national  fascination  with  the  state’s  fall  from  grace.       41       Table 1. Demographic Information: Lansing, Detroit, Michigan, and United States Lansing Detroit Michigan USA Population, 2010 114,297 713,777 9,883,640 308,745,538 Population, -4% -25% -1% 9.7% percent change, 2000 to 2010 White persons, 61% 11% 79% 72% 2010 Black persons, 24% 83% 14% 13% 2010 American Indian 1% 0% 1% 1% and Alaska Native persons, 2010 Asian persons, 4% 1% 2% 5% 2010 Persons reporting 6% 2% 2% 3% two or more races, 2010 Persons of 13% 8% 4% 16% Hispanic or Latino origin, 2010 Homeownership 55% 54% 74% 66% rate, 2007-2011 Median value of $97,400 $71,100 $137,300 $186,200 owner-occupied housing units, 2007-2011 Median household $37,528 $27,862 $48,669 $52,762 income, 20072011 Persons below 25% 36% 16% 14% poverty level, 2007-2011 Source: My compilation from People QuickFacts, U.S. Census Bureau      No  longer  the  bastions  of  stable  industrial  employment  they  once  were,  Michigan’s   industrial  cities—Lansing,  Detroit,  Flint  (not  shown)—now  have  populations  significantly   poorer  than  the  average  American  household  (Table  1).  In  Jan.  2013,  I  updated  this  section   42   with  data  from  2007—2011  American  Community  Survey,  to  replace  the  2005—2009   numbers.  What  it  showed  me  was  a  continued  slide  of  Michigan  downward  and,   significantly,  away  from  the  national  experience.  Median  property  values  and  household   income  in  Michigan,  individual  cities  and  the  state  as  a  whole,  continued  to  decline,  with  an   attendant  rise  in  poverty.  As  a  whole,  housing  values  and  household  income  rose  in  the   United  States  while  the  level  of  poverty  remained  constant.  In  broad,  raw  form,  these   statistics  illustrate  the  lived  experience  of  urban  Michiganders  slipping  from  centrality  to   the  margins,  from  the  heart  of  a  triumphant  middle  class  experience  to  the  sidelines:  that,   as  Donovan  intoned,  “when  the  bottom  fell  out…in  2008,  nobody  felt  the  pain  more  than   Michigan.”  By  saying  this,  I  do  not  mean  to  argue  for  the  finality  of  this  state,  nor  to   reinforce  a  defeatist  narrative.  Rather,  these  statistical  measures  echo  the  quality  of   experience  I  found  in  the  housing  crisis—one  of  slippage,  of  pause,  of  the  hope  and   potential  to  regroup  without  a  firm  grasp  on  belief  about  what  the  future  will  hold.     While  Michigan  experienced  a  one-­‐state  recession  beginning  in  2001,  certain  areas   simultaneously  experienced  a  housing  bubble,  though  a  more  modest  one  than  the  Sand   States  of  California,  Nevada,  Arizona,  and  Florida  (HUD  2010).  Michigan  has  long  had  a   higher  than  average  homeownership  rate,  which  peaked  in  late  2006,  at  78  percent.   Statewide,  median  housing  prices  rose  from  $115,600  in  2000  (Census  2011a)  to  $137,300   for  the  period  2007–2011—after  coming  down  from  their  housing  bubble  height.  Highly   segregated  cities,  including  Detroit,  Flint,  and  Muskegon  were  swept  up  in  the  wave  of   fraudulently  high  appraisals  and  predatory  lending  that  marred  minority  communities   across  the  country  during  the  housing  bubble  (Squires,  Hyra,  and  Renner  2009).   43   Foreclosures  began  to  rise  markedly  in  2005  due  to  the  confounding  effects  of  high   unemployment  and  people  leaving  the  state  in  search  of  other  work.   Since  the  beginning  of  the  national  foreclosure  crisis  in  late  2006,  Michigan  has  been   among  the  five  states  with  the  highest  foreclosure  rates  along  with  Arizona,  California,   Florida,  and  Nevada.  Yet  there  are  important  regional  and  local  differences  shaping  the   housing  crisis.  The  other  high-­‐rate  states,  the  so-­‐called  “sand  states,”  typify  speculative   investment  in  real  estate,  a  boom  in  housing  prices  facilitated  by  exotic  new  mortgage   instruments  that  led  to  sharp  default  rates  and  later,  a  rise  in  unemployment.  In  Michigan,   in  contrast,  job  losses  or  reduced  income  accounted  for  upwards  of  90%  of  new   foreclosures.     Mirroring  national  trends,  the  rate  of  foreclosure  in  the  city  spiked  in  2006  and   peaked  in  2008;  the  change  from  2005  is  a  133%  increase  (789  versus  1,841).  One  housing   professional  I  met  during  the  course  of  this  research  claimed  that  prior  to  the  current  crisis,   there  were  about  70  people  per  year  counseled  by  non-­‐profit  housing  counselors  about   foreclosure.  Lansing  mayor  Virg  Bernero  in  September  2009  noted  that  there  were  ten   foreclosures  a  week  in  the  city.  These  numbers  of  course  do  not  reflect  the  concentration  of   unemployment,  poverty,  and  foreclosure  by  race/ethnicity,  class,  gender,  and   neighborhood.     Foreclosure  is,  by  design,  punitive  to  homeowners.  Punishments  include  the  loss  of   higher  status  as  a  homeowner,  tax  breaks,  loss  of  the  house  itself,  all  the  money  invested  in   it,  the  threat  that  a  lender  may  pursue  a  deficiency  judgment,10  and  damaged  credit  for  up                                                                                                                   10  A  lender  can  seek  a  deficiency  judgment  for  is  the  difference  between  what  was  owed  on   the  mortgage  and  the  resale  price  after  foreclosure.  Some  states,  called  non-­‐recourse,  do   44   to  seven  to  ten  years.  Brent  White  (2010c)  argues  that  government  agencies,  lenders,  and   HCAs  among  others,  exaggerate  the  actual  consequences  of  foreclosure  in  order  to  cultivate   more  shame.  Homeowners’  shame  is  “useful”  for  preventing  banks  from  incurring  losses  by   encouraging  homeowners  to  sacrifice  as  much  as  possible  to  avoid  foreclosure.     Much  of  the  pre-­‐foreclosure  process  publicly  marks  those  at  risk  of  default.  In   Michigan,  lenders  publish  notices  in  the  newspaper  for  four  weeks  before  a  sheriff  sale.   These  are  supposed  to  notify  homeowners  and  any  other  lien-­‐holders  of  the  immediacy  of   foreclosure;  in  effect,  they  also  alert  family  members,  neighbors,  speculators,  and   scammers  to  a  distressed  owner’s  situation.  The  sheriff  also  marks  the  house  by  putting  a   pre-­‐sale  notice  on  the  house’s  window.  Again,  this  is  supposed  to  be  a  notice  a  homeowner   cannot  help  but  see—in  case  they  are  not  opening  mail  from  their  lender  and  have  missed   the  other  announcements  about  the  auction.  Participants  in  my  research  experienced  the   notice  taped  to  the  window  as  a  moment  of  deep  shame,  being  marked  as  though  with  a   scarlet  letter.  A  common  motif  about  foreclosure  is  that  families  pack  up  their  belongings  in   the  middle  of  the  night,  never  to  be  heard  from  by  their  neighbors  again,  to  avoid  the  shame   of  being  identified  with  foreclosure.  Housing  professionals  and  public  officials  frequently   brought  up  stories  about  neighbors  or  acquaintances  leaving  in  such  a  way.  Many   homeowners  I  talked  to  experienced  feelings  of  panic  and  shame  about  having  their   troubles  made  public;  most  who  allowed  me  to  interview  them,  though,  spoke  about  the   importance  of  sharing  their  stories  to  reduce  the  shaming  power  of  foreclosure  and   possibly  to  help  others  facing  default  in  the  future.                                                                                                                   not  allow  this;  Michigan  does.  It  is  a  threat  most  often  raised  against  those  who  threaten  to   walk  away,  rather  than  negotiating  a  short  sale,  deed-­‐in-­‐lieu  of  foreclosure,  or  participating   in  a  “cash  for  keys”  program  where  the  lender  effectively  pays  the  homeowner  some   moving  costs  in  exchange  for  not  damaging  the  property  before  leaving.     45   In  July  2009,  facing  a  foreclosure  rate  that  had  nearly  tripled  in  three  years,  the   Michigan  state  legislature  passed  a  package  of  bills  (HB  4453—4455)  aimed  at  reducing   foreclosures.  The  state’s  analysis  was  that  because  less  than  20  percent  of  homeowners   contacted  their  lenders  or  a  housing  counselor  when  there  was  still  time  to  avoid   foreclosure,  it  would  benefit  constituents  to  require  lenders  to  inform  them  of  their  right  to   negotiate  an  alternative  to  foreclosure  (Senate  Fiscal  Agency  2009).  When  the  law  went   into  effect,  Governor  Jennifer  Granholm  appeared  with  housing  counselors  in  a  series  of   public  service  announcements.  One  counselor  somewhat  dubiously  exclaimed  to  me  that  in   doing  so,  she  “made  us  all  experts  overnight.”  The  original  bills  required  that  in  order  to   activate  the  negotiation  period,  homeowners  had  to  work  with  a  HUD-­‐  or  MSHDA-­‐certified   housing  counselor.  Housing  agency  client  volumes  correspondingly  rose,  creating  the   chaotic  field  sites  I  observed  and  through  which  I  met  counselors  and  troubled   homeowners.       Research  Methods,  Participants,  and  Data   Methodologically,  this  project  used  standard  anthropological  tools:  participant   observation,  interviews,  and  surveys.  The  bulk  of  primary  data  collection  was  participant   observation  at  two  private,  non-­‐profit  housing  counseling  agencies,  observation  in  other   venues,  such  as  the  Michigan  Foreclosure  Task  Force  and  foreclosure-­‐related  events  for   legislators;  and  interviews  with  homeowners,  housing  professionals,  and   housing/consumer  activists.  In  addition,  I  draw  on  housing  counseling  program  and   training  materials.  This  research  was  condcuted  with  approval  of  MSU’s  institutional   review  board  (IRB)  under  approval  #09-­‐684,  first  approved  August  5,  2009  and  renewed   46   annually.  I  offered  participants  the  option  to  appear  under  their  real  names  or  a   pseudonym.  I  have  followed  their  choices  except  where  identifying  one  person  would   reveal  the  identity  of  someone  who  wished  to  remain  confidential.     Participant  Observation   With  endorsement  from  the  Michigan  State  Housing  Development  Authority   (MSHDA)  and  cooperation  of  several  mid-­‐Michigan  housing  counseling  agencies,  various   other  state  agencies,  and  community  groups,  I  conducted  fourteen  months  of  ethnographic   research  in  mid-­‐Michigan  (from  August  2009—October  2010)  and,  to  a  lesser  degree,  east   Michigan,  on  the  experiences  of  homeowners  facing  foreclosure  and  the  work  of  housing   counseling  agency  staff  .  All  participant  observation  conformed  to  the  agency’s   confidentiality  agreement  as  well  as  IRB-­‐approved  protocol.  Each  agency  provided  a  letter   of  support  outlining  the  project  and  participation  I  undertook  with  each  agency.     Most  of  my  participant  observation  occurred  at  one  agency—Franklin  Street   Community  Housing  Corporation  in  Lansing—that  has  three  housing  counselors  who  work   with  homeowners  in  face-­‐to-­‐face  sessions.  I  volunteered  at  this  agency  from  February  to   October  2010  an  average  of  ten  hours  a  week.  Primarily  I  answered  phones,  checked  the   voicemail,  scheduled  appointments,  and  did  the  first  level  of  intake  for  foreclosure   intervention  clients.  The  first  level  of  intake  consisted  of  a  telephone  screening  to  find  out   how  many  mortgage  payments  a  person  had  missed,  if  they  were  already  in  foreclosure,   and  what  income  and  expenses  they  had.  The  agency  perpetually  needed  help  from   volunteers  in  answering  the  phone  and  responding  to  voicemails  and  their  under-­‐staffing   allowed  me  to  be  very  close  to  the  conversations  that  clients  have  with  housing  counselors   47   even  before  I  started  interviewing  clients  in  June  2010.  At  this  agency,  I  observed  and  took   notes  on  seventeen  individual  counseling  sessions—the  majority  (13)  were  intake   counseling  sessions  where  clients  spend  an  average  of  two  hours  going  over  their  budget,   what  happened  to  place  them  in  danger  of  losing  the  house,  what  outcome  they  were   hoping  for,  the  counselor  discussing  possible  strategies  with  them,  and  making  initial   contact  to  negotiate  with  the  mortgage  servicer.  Because  these  clients  consented  to  let  me   observe  their  sessions,  their  primary  housing  counselor  would  update  me  on  how  their   case  was  proceeding  if  she  had  an  update.  The  remaining  sessions  I  observed  (4)  were   follow-­‐up  appointments  that  happened  at  important  moments  in  the  negotiation  process— either  the  client  had  a  mediation  meeting  with  an  attorney,  had  received  an  offer  of  or   rejection  for  a  loan  modification,  or  their  house  was  about  to  sold  at  a  sheriff  sale.  I  also   interviewed  most  of  the  homeowners  whose  counseling  sessions  I  observed.     I  spent  four  full  days  at  telephone  counseling  centers  in  Lansing—three  at  a  local  non-­‐ profit  that  counseled  clients  over  the  phone,11  and  one  at  a  statewide  referral  hotline.   These  telephone  agencies  offered  me  much  less  opportunity  to  interact  with  homeowners   than  Franklin  Street.  The  non-­‐profit  telephone  agency  also  had  a  full-­‐time  receptionist  and   intake  specialist  so  I  was  never  able  to  speak  directly  to  clients  on  the  phone  nor,  of  course,   talk  to  them  while  they  were  waiting  for  their  appointments.  Counselors  explained  their   process  and  cases  (without  identifying  details)  to  me,  they  allowed  me  to  listen  to  follow-­‐ up  calls  to  servicers,  and  observe  trainings  conducted  online  or  by  conference  call.  Finally,                                                                                                                   11  Working  with  local  clients  over  the  phone  is  different  than  the  phone  bank/call  center   model  of  housing  counseling  where  homeowners  from  anywhere  in  the  country  call  in  to  a   centralized  phone  system  and  have  all  their  counseling  over  the  phone  by  a  person   potentially  many  states  away.     48   at  the  referral  hotline,  I  answered  calls  from  distressed  homeowners  who  wanted  contact   information  for  a  non-­‐profit  housing  counselor  in  their  area.     I  also  was  able  to  observe  and  take  notes  on  housing  counselor  trainings,  including  a   five-­‐day  training  by  a  national  housing  intermediary;  community  meetings,  and  political   rallies  where  the  recession  was  inevitably  a  focus.  Throughout  this  research,  I  attended   meetings  of  the  Michigan  Foreclosure  Task  Force,  a  coalition  of  housing  counseling   agencies,  consumer  advocates,  legal  aid  attorneys,  and  former  and  current  elected  officials.   My  own  Lansing  neighborhood  and  social  networks  were  also  important  sites  for   participant  observation  as  I  saw  more  houses  near  mine  being  red-­‐tagged,  houses  covered   with  hand-­‐painted  for  sale  signs,  and  talked  with  friends  and  neighbors  about  the   recession.  Lastly,  my  own  experiences  from  2005  to  2011  typify  many  elements  of  the   housing  boom  and  bust.  I  talk  about  these  in  much  greater  depth  in  the  next  chapter.     Interviews   I  conducted  semi-­‐structured  or  unstructured  interviews  with  63  participants  in  this   research—29  homeowners,  32  housing  professionals,  and  6  activists  that  contest   foreclosures  and  evictions.12    The  interviews  reported  here  lasted  between  30  minutes  and   three  hours  each.  These  do  not  include,  for  example,  informal  interviews  where  I  was  able   to  probe  deeper  into  a  topic  during  conversation  nor,  of  course,  conversations  as  part  of  the   everyday  life  in  the  housing  counseling  agency.                                                                                                                     12  Four  people  are  counted  in  two  categories—two  are  both  homeowners  and  activists;   two  others  are  housing  professionals  and  activists.   49   Homeowners:  I  interviewed  twenty-­‐nine  homeowners  in  twenty-­‐one  households13   who  were  in  any  stage  of  the  foreclosure  process:  from  those  severely  underwater  but  not   yet  behind  on  a  payment,  to  those  negotiating  with  their  servicer  for  a  loan  modification,  to   those  whose  houses  had  been  foreclosed.  Because  of  the  length  of  time  homeowners  spent   facing  foreclosure,  I  was  not  able  to  follow  particular  homeowners  from  the  point  of   delinquency  to  resolution.  Identifying  homeowners  at  various  stages  in  the  process,   however,  allowed  me  to  cover  the  full  spectrum  of  the  foreclosure  experience.  I  collected   demographic  information  from  twenty-­‐four  residents  living  in  eighteen  households.  Just   over  half  the  people  I  interviewed  were  women  (54%),  most  (71%)  were  white,  half  were   married;  the  other  half  were  divorced  (21%),  single  (21%)  or  widowed  (4%).  The   households  were  almost  evenly  split  between  being  first-­‐time  homeowners  (44%)  and  not   (50%).14  The  median  age  of  homeowners  was  45.  These  were  not  young,  first-­‐time   homebuyers  who  had  “gotten  in  over  their  heads”  from  the  moment  they  contracted  a   mortgage.     In  household  composition,  age,  and  gender,  the  homeowners  I  interviewed  were   similar  to  all  homeowners  who  have  sought  help  under  the  National  Foreclosure  Mitigation   Counseling  (NFMC)  program  and  other  HUD  housing  counseling  services  (Jefferson  et  al   2012;  see  Table  2).  Overall,  housing  counseling  clients  are  evenly  split  by  gender  and   racially  diverse.  Though  whites  are  the  single  largest  racial  group  among  housing   counseling  clients,  they  are  under-­‐represented  given  high  rates  of  homeownership  for                                                                                                                   13  In  two  cases  I  interviewed  a  homeowner’s  family  member  who  was  not  residing  with   them  but  was  involved  in  helping  them  navigate  their  housing  crisis.   14  I  interviewed  one  young  woman  who  was  living  with  her  family  in  her  late  teens  when   their  house  was  foreclosed.   50   whites.  To  take  it  another  way,  African  Americans  represent  26%  of  housing  counseling   clients  nationwide  but  are  only  8%  of  U.S.  homeowners,  simply  one  more  indication  of  the   disproportionate  effects  of  predatory  lending  on  African  Americans.     Table 2. Household Characteristics of Homeowners Facing Foreclosure Homeowners Michigan Housing NFMC Counselees Interviewed for this Counseling Clients, (U.S.) Project all types of counseling Gender Female 54% 52% Male 46% 48% Race White 71% 52% 43% African American 21% 32% 26% Asian 0% 3% Other minorities <1% 1% Multiracial 4% 1% Other race, missing, 4% 11% 6% or refused Ethnicity Hispanic or Latino 4% 7% 21% Household Type Married 50% 54% Single Adult 33% 19% Female single parent 13% Male single parent 5% 4% Two or more 3% unrelated adults Other 11% 7% Sources: Demographic profiles filled out by participants; MSHDA 9902 data for fiscal year 2010; last column adapted from NFMC data through January 31, 2010 from Jefferson et al (2012). Notes: For HUD housing counselees and all homeowners, Hispanic or Latino may be of any race. NFMC used Hispanic or Latino as a race category. Participants in this project self-reported race/ethnicity. Figures may not sum to 100 because of rounding.   51   I  worked  closely  with  housing  counselors  to  recruit  most  of  these  homeowners.   Although  these  are  only  a  subset  of  distressed  borrowers  and  may  be  different  than  all   foreclosed  owners—especially  those  who  did  not  seek  counseling  or  who  strategically   defaulted—meeting  homeowners  this  way  has  several  methodological  virtues.  Seeking   housing  counseling  is  one  of  the  most  reliable  ways  to  identify  distressed  homeowners.   Counselors  have  established  relationships  of  trust  with  their  clients,  making  meeting   owners  through  counseling  agencies  far  more  reliable  than  other  ways  of  contacting   homeowners  near  foreclosure  (i.e.,  cold-­‐calling  owners  with  a  sheriff  sale  notice  in  the   paper).  Working  with  housing  counseling  agencies  also  revealed  signature  issues  of  this   foreclosure  crisis—namely,  loan  modification  programs.  I  did  participant  observation  at   housing  counseling  agencies,  which  gave  me  a  specialized  knowledge  of  how  housing   counseling  operates,  but  this  did  not  lead  me  into  deep  relationships  with  the  homeowners’   everyday  lives.  Meeting  the  homeowners  I  interviewed  for  this  dissertation  was   transactional—and  so  my  insight  into  their  lives  is  correspondingly  partial  and  focused  on   housing.  In  this,  my  project  does  not  differ  from  many  urban  research  projects  where   investigators  more  often  rely  on  interviews  than  participant  observation  because  of  the   difficulty  of  defining  the  spaces  for  social  interaction  (Gmelch  and  Gmelch  2009).     My  strategy  of  working  to  recruit  through  counseling  agencies  did  not,  however,  get   me  access  to  homeowners  who  are  not  involved  in  a  formal  program  to  modify  their   mortgage,  who  are  arguably  most  homeowners  facing  foreclosure.  Because  this  population   is  even  more  difficult  to  identify  and  access,  I  took  any  opportunity  that  arose  to  talk  with   such  homeowners  through  personal  networks,  research  contacts,  and  Facebook.  On   Facebook,  National  Public  Radio  (NPR)  solicited  responses  from  anyone  willing  to  discuss  a   52   foreclosure  or  short  sale  for  an  upcoming  story.  On  the  assumption  that  anyone  willing  to   respond  to  a  public  comment  thread  about  their  story  might  be  receptive  to  talking  to  me   (in  addition  to  NPR),  I  searched  the  comment  thread  for  any  comment  mentioning   Michigan.  I  contacted  four  people,  all  of  whom  eagerly  agreed  to  be  interviewed.  I   interviewed  three  of  these  people—all  in  the  greater  Flint  area—in  person  and  one  woman   from  Traverse  City  over  the  phone.     Most  interviews  with  homeowners  ended  up  being  extremely  open-­‐ended,  as  one  of   the  major  complaints  homeowners  facing  foreclosure  have  is  that  no  one  is  interested  in   hearing  their  story.  The  narrative  format  of  the  interviews  also  accorded  very  well  with  my   theoretical  interest  in  narrative  as  a  way  that  individuals  form  a  sense  of  ethical   personhood  and  as  political  subjects.  For  the  few  participants  who  weren’t  forthcoming,   interviews  followed  an  interview  guide  on  their  personal  background,  the  current  housing   issue,  and  the  sociopolitical  context  of  the  foreclosure  crisis  (see  appendix).  In  all  the   discussions,  we  ranged  over  topics  from  the  homeowner’s  childhood  to  their  current   housing  difficulties,  to  the  broader  political  economy.     Housing  Professionals  and  Activists:  I  conducted  interviews  and  meetings  of  varying   formality  with  housing  professionals  from  nine  housing  agencies,  including  the  Michigan   State  Housing  Development  Authority  (MSHDA),  and  two  mortgage  lender  employees.  I   also  had  meetings  with  representatives  of  bankruptcy  court,  legal  aid  projects,  and  two   groups  of  grassroots  activists.  Across  these  various  kinds  of  interviews  and  meetings,  I   worked  with  thirty-­‐two  housing  professionals  and  six  activists  in  Detroit.  Most  of  these   discussions  were  more  targeted  to  the  person’s  professional  life,  including  discussions  of   the  policies,  institutions,  and  cultural  changes  that  enabled  the  housing  boom  and  bust.  I   53   interviewed  32  housing  professionals  from  nine  housing  agencies,  two  mortgage  lenders,   bankruptcy  court,  and  legal  aid  projects,  and  6  activists  who  contest  foreclosures  and   evictions.15  Twenty  of  them  were  employed  in  the  housing  counseling  industry  and  were   overwhelmingly  white  (85%)  and  women  (90%).  The  industry  as  a  whole  is  also   dominated  by  women  and  whites  (Jefferson  et  al  2012:  70)  but  not  to  such  an  extreme   degree.  The  two  groups  of  activists  I  interviewed  in  Detroit,  like  the  city  itself,  were   overwhelmingly  (83%)  African  American.  In  addition  to  attending  several  membership   meetings  and  public  events  sponsored  by  the  Moratorium  NOW!  coalition,  a  foreclosure   prevention  group  allied  with  the  Workers'  World  (socialist)  party  in  Detroit,  I  interviewed   one  of  its  directors  and  two  homeowners  who  had  become  activists  after  the  coalition   fought  (unsuccessfully)  to  help  them  keep  their  homes.  Moratorium  NOW!  uses  protests  at   homes  threatened  with  foreclosure,  bank  branches  of  foreclosing  lenders,  letter-­‐writing   campaigns,  and  “pack  the  courtroom”  tactics,  in  addition  to  having  2  participating  lawyers   who  represent  homeowners  in  court.  The  other  three  activists  pursued  a  purely  court-­‐ based  strategy  of  contesting  violations  of  legal  process  by  foreclosing  lenders  and  local   officials  in  eviction  proceedings.  Given  Detroit’s  history  of  radical  activism,  compared  to   Lansing’s  more  milquetoast  record,  it  should  not  be  surprising  that  grassroots  campaigns   against  foreclosure  took  hold  in  Detroit  but  I  found  none  in  Lansing.16       Documentary  sources:  I  collected  materials  produced  by  agencies  I  worked  with,   training  materials  that  counselors  found  useful,  training  materials  provided  at  the  week-­‐                                                                                                                 15    Again,  note  that  two  of  the  housing  professionals  also  self-­‐identify  as  activists.   16  Arguably,  the  closest  effort  would  be  ACORN,  whose  local  branch  closed  in  late  2009   after  Congress  ended  all  federal  funding  for  the  organization.   54   long  housing  counselor  training  I  attended,  relevant  legislation  (e.g.,  Michigan’s  90-­‐day   laws  and  the  TARP  bill),  and  academic  and  government  analyses  of  the  causes  of  the   housing  crisis.  Because  of  the  immense  volume  of  information  constantly  emerging,  I  have   needed  to  be  selective  and  partial,  at  the  risk  of  missing  some  analytic  gems  along  the  way.   Media  analysis  posed  the  same  problem:  since  coverage  of  the  housing  crisis  and  recession   filled  most  media  outlets  before,  during,  and  after  the  time  I  was  officially  in  the  field,   figuring  out  how  to  select  from  the  overwhelming  volume  of  information  has  proven   particularly  challenging.  I  have,  therefore,  focused  on  articles  and  blog  posts  that  people  I   interviewed  suggested  to  me,  or  that  I  found  especially  informative.     As  urban  research  on  an  economic  crisis  in  my  own  community,  this  project  posed   methodological  and  epistemological  challenges.  Urban  fieldworkers  typically  feel  that  they   do  not  get  a  sense  of  belonging  in  a  whole  social  world,  or  of  having  an  understanding  of  a   coherent  community.  Of  course  I  entered  “the  field”  having  dense  social  networks  and  an   overall  sense  of  Lansing  as  a  community  based  on  having  lived  there,  as  homeowner,  as   graduate  student,  for  four  years.  However,  like  any  city  resident,  my  knowledge  of  the  city   was  partial  and  had  only  begun  to  be  touched  by  the  housing  market  collapse—literally,  as   houses  up  and  down  my  block  and  throughout  the  neighborhood  went  into  foreclosure  and   were  red-­‐tagged.  Ethnographers  working  in  their  own  communities  often  feel  conflict  at   redefining  their  own  social  milieu  from  “home”  to  “field  site.”  There  is  a  sense,  as  Ortner   (2003)  wrote  of  researching  class  and  her  own  high  school  cohort,  of  feeling  “overwhelmed   by  the  fact  that  my  whole  culture  has  become  my  text,  my  ethnography.  I  can't  read  a   newspaper,  see  a  movie,  watch  television,  without  it  being  part  of  my  fieldwork.  No  escape"   (22–23).  Especially  because  I  was  researching  the  major  national  news  story  at  the  time,   55   the  opportunities  to  find  data  never  ended.  From  finding  the  breakfast  feature  at  a  local   restaurant  billed  as  the  “Economic  Downturn  special,”  to  opening  any  newspaper  or   website  in  the  last  five  years,  there  was  and  remains,  as  of  this  writing,  no  escape  from  the   questions  about  homeownership,  class,  and  their  relation  to  one’s  experience  as  a  political   subject.  As  noted,  almost  all  media  outlets  include  at  least  one  story  on  foreclosures—and   certainly  one  on  the  recession—every  day.     Lastly,  the  substance  of  an  ongoing  economic  crisis  poses  methodological  and  analytic   problems.  In  the  ongoing  struggles  of  the  housing  market  and  serious  efforts  all  around  to   rope  people  into  class-­‐  and  political  projects  built  from  the  recession  (however   interpreted),  deciding  when  and  how  to  “leave  the  field”  is  not  a  simple  matter,  nor  is   placing  radically  unsettled  events  into  an  interpretive  framework.  As  Ferguson  found  in   researching  urban  decline  in  the  Zambian  copper  belt,  doing  research  on  an  ongoing   economic  crisis  makes  it  hard  for  both  the  subjects  of  research  and  the  ethnographer  to   understand  what  is  happening  and  why  (1999:19).  He  found  that  his  subjects  did  not   “inhabit  a  stable  and  well  known  social  order.  They  did  not  know  what  was  happening  to   them  and  did  not  understand  why  it  was  happening.  Neither  did  I...What  happens  to   anthropological  understanding  in  a  situation  where  'the  natives'  as  well  as  the   ethnographer  lack  a  good  understanding  of  what  is  going  on  around  them?"  (19).  In  the   case  of  Ferguson’s  project  with  Zambian  mine  workers  and  mine  with  distressed  Michigan   homeowners,  we  are  confronting  the  experiences  of  groups  of  people  who  have  historically   symbolized  the  great  successes  of  their  countries,  only  to  be  most  hard-­‐hit  by  devastating   economic  changes.  Ferguson  resolves  his  analytic  dilemma  by  in-­‐depth  studies  of  urban   56   residents  who  move  back  to  the  countryside  to  make  a  living,  physically  moving  against  the   nation’s  myth  of  development  and  progress  symbolized  by  the  cities.     In  my  case,  I  approach  the  problem  as  my  interlocutors  did—as  being  fundamentally   about  the  uncertainty  and  the  new  learning  that  accompanies  this  terra  incognita.  It  is   about  a  moment  in  time,  from  late  2009  to  late  2010—a  moment  of  heightened  uncertainty   and  anxiety,  high  foreclosures  and  long  delays,  the  moments  just  before  the  robo-­‐signing   scandal  broke,  and  before  Occupy  Wall  Street  taught  Americans  to  identify  their  thwarted   class  ambitions  with  “the  99%.”  While  this  dissertation  is  in  some  ways  absolutely  about   the  foreclosure  crisis,  impending  foreclosure  becomes  a  backdrop  to  other  analytic   questions.  Impending  foreclosure  is  “good  to  think”  the  meanings  of  belonging  in  the   contemporary  United  States—belonging  to  a  community,  to  a  polity,  to  a  class  position,  to  a   family.  Impending  foreclosure  is  also,  most  fundamentally,  useful  to  think  with  about  the   experiences  of  uncertainty  and  instability  that  cut  through  all  these  social  axes.       In  the  rest  of  this  dissertation,  I  examine  the  lived  experience  of  facing  foreclosure,   and  the  cultural  registers  and  overlapping  domains  of  authority  through  which  it  is   negotiated.  Chapter  2  is  auto-­‐ethnographic  about  my  experience  buying  a  house  in  Lansing   during  the  real  estate  boom,  buying  a  foreclosed  house  next  to  mine,  and  trying  to  navigate   the  effects  as  a  signatory  to  my  mortgage  declared  bankruptcy.  Chapter  3  examines  to  the   centrality  of  class  and  history  in  shaping  what  distressed  homeowners  and  housing   professionals  perceive  to  be  at  stake—and  it  is  nothing  less  than  America’s  claims  to  great   nationhood.  Chapter  4  discusses  the  role  of  financial  institutions  in  the  foreclosure  crisis— including  the  highly  liquid  model  of  ownership  they  promoted  during  the  housing  boom   and  how  distressed  homeowners  experience  them  as  corrupt,  unpredictable,  and   57   illegitimate  when  they  are  facing  mortgage  default.  Chapter  5  examines  state  and  non-­‐state   interventions  in  the  foreclosure  crisis.  This  chapter  explores  ethnographically  the   experiences  of  homeowners  seeking  help  from  non-­‐profit  housing  counseling  agencies,  and   homeowners’  challenges  to  the  state’s  authority.  Chapter  6  summarizes  the  dissertation’s   arguments  and  offers  reflections  and  conclusions.     58   Chapter  2:  At  Home  in  a  Crisis     Buying  In   In  many  ways,  my  entire  presence  in  the  working  class  neighborhood  where  I  lived   in  Lansing  for  six  years  was  made  possible  by  the  housing  bubble.  I  share  this  rather   extensive  story  about  my  own  experience  with  the  housing  market  both  to  reflexively   position  myself  in  the  research  site  and  because  it  illuminates  several  facets  of  the  housing   boom  and  bust.     In  2005,  at  the  height  of  the  housing  bubble,  my  husband,  Randy,  and  I  bought  a   1922  bungalow  for  $51,850.  We  made  all  the  decisions  quickly  over  a  three-­‐day  trip  to  visit   Michigan  State  University  (MSU)  before  starting  graduate  school.  Our  primary  (conscious)   motivation  to  buy  was  that  the  rentals  we’d  looked  at  within  walking  distance  of  campus  in   pricier  East  Lansing  were  too  expensive  and  most  wouldn’t  accept  our  cat.  One  of  us,  I  can’t   remember  who,  said,  “I’m  not  paying  $900  a  month  to  live  in  an  ugly  house  that  won’t  even   let  us  keep  our  cat.  I  bet  we  could  buy  a  house  for  what  that  costs.”  We  quickly  decided  that   we  would  meet  with  a  realtor  and  didn’t  consider  renting  a  house  in  Lansing.  Our  minds   had  flipped  so  completely,  so  quickly,  that  once  we  decided  not  to  rent  in  the  immediate   vicinity  of  campus,  we  never  thought  about  renting  again.  I  was  more  excited  about  the   prospect  that  our  house  might  appreciate  in  value  and  we  would  come  out  ahead   financially  from  having  bought  a  house.  Randy  reasoned  with  me  that,  even  if  we  didn’t   make  any  money  on  the  house,  that  in  our  future  sale  we  would  surely  get  back  whatever   amount  we  paid  on  the  mortgage.  Assuming  mortgage  payments  of  $500  a  month  for  5   years,  that  amounted  to  $30,000  of  “rent-­‐free”  living.  We  were,  like  other  middle  class,   59   white  Americans,  convinced  that  this  was  good  debt,  which  Peñazola  and  Barnhart’s  (2011)   informants  described  as  a  debt  that  might  create  future  income  for  you,  “almost  like   savings.”  In  short,  we  were  extremely  uncritical  buyers  of  the  boom  housing  market.   We  had  a  $5,000  down  payment  from  my  grandparents—a  wedding  present.  On  the   advice  of  our  realtor,  we  met  with  a  mortgage  broker  at  GMAC  Mortgage.  Since  MSU  bought   so  many  GM  vehicles  for  its  fleet,  the  brokerage  offered  its  employees  a  discount  on  closing   costs.  Like  most  other  Americans  getting  a  mortgage,  we  did  not  shop  around.17  On  my   $23,000  a  year  graduate  student  fellowship,  we  were  pre-­‐qualified  for  what  seemed  to  us  a   stupefyingly  large  $70,000  loan.  However,  because  I  had  not  yet  been  paid  any  of  that  when   we  sought  our  mortgage,  we  needed  a  co-­‐signer.  And  so,  like  millions  of  young  American   homebuyers,  we  got  a  co-­‐signer  (my  father)  and  our  first  house.  Technically,  we  bought  the   house  as  my  father’s  “second  home”  and  it  remained  classified  that  way  until  late  2010.18     Randy,  my  father,  and  I  took  out  a  5-­‐year  adjustable-­‐rate  mortgage  (ARM)  for  eighty   percent  of  the  loan  ($36,295)  and  a  home  equity  line  of  credit  (HELOC)  for  the  remainder.   ARMs  begin  with  a  low  “teaser”  interest  rate  that  resets  after  a  few  years.  There  are  many   different  types  of  ARMs,  such  as  1/1  or  3/1,  where  the  first  number  is  the  number  of  years   it  has  a  low  fixed  interest  rate  for  one  year,  and  the  second  number  denotes  how  frequently   it  adjusts.  For  example,  a  3/1  loan  has  a  low  fixed  rate  for  3  years,  then  adjusts  according  to                                                                                                                   17  In  a  national  evaluation  of  HUD’s  foreclosure  intervention,  my  colleagues  and  I   (Jefferson  et  al.  2012)  found  that  a  minority  of  owners  (between  28  and  43  percent)  met   with  more  than  one  lender  or  broker  before  taking  out  a  mortgage  (cf.  Woodward  2003   and  Essene  and  Apgar  2007  on  the  difficulty  of  comparing  mortgage  terms).   18  There  was  also  a  large  trend  for  parents  to  buy  houses  for  their  children  to  live  in  either   as  college  or  graduate  students,  with  the  understanding  that  the  parents  would  retain  the   house  as  an  investment  property  after  their  child’s  graduation,  or  sell  it  at  a  profit.   60   whatever  it  is  indexed  to,  such  as  1-­‐year  Treasury  bonds.  Our  loan  was  a  5/1  ARM  indexed   to  the  London  Interbank  Offered  Rate  (LIBOR)  published  in  the  Wall  Street  Journal.  For  five   years,  we  paid  5.625  percent  interest.  Upon  reset,  the  interest  rate  would  be  2.375  percent   above  the  LIBOR  rate  and  could  go  up  or  down  a  maximum  of  2  interest  rate  points  per   year  thereafter.   In  the  broader  foreclosure  crisis,  the  vast  increase  of  ARMs  is  one  of  the  exotic   mortgage  features  to  blame  for  the  surge  in  delinquencies,  particularly  if  the  loans  were   given  with  no  or  low  documentation.  During  the  real  estate  boom,  interest  rates  were   rising,  meaning  that  interest  rates—and  therefore  payments—increased  after  the   introductory  period.  Mortgage  brokers  sold  millions  of  these  loans  to  some  people  who   may  not  have  understood  what  this  meant  or  “just  figured  I’d  work  it  out  somehow.”  To   skeptical  buyers,  brokers  promised  that  with  housing  prices  constantly  rising,  they  could   refinance  into  a  lower-­‐rate  fixed  mortgage  (or  another  ARM  with  a  teaser  rate)  when  the   ARM  reset.  This  strategy  only  works  when  housing  values  are  rising,  so  that  a  homeowner   can  contract  a  new  mortgage  based  on  a  higher  market  value,  allowing  them  to  pay  off  the   outstanding  mortgage  and,  if  all  goes  well,  receive  additional  cash  at  closing.  By  2006,  over   half  of  new  mortgages  were  ARMs.  Yet,  by  late  2006,  housing  prices  had  stopped  rising,   meaning  that  millions  of  Americans  with  this  kind  of  loan  could  neither  refinance  nor   afford  their  higher  payments  (HUD  2010).     Randy  and  I  accepted  the  5-­‐year  ARM  in  order  to  get  a  lower  interest  rate  than  we   would  have  on  a  30-­‐year  fixed  rate  and  because  we  believed  we  would  live  in  Lansing  for   five  years  for  graduate  school—and  sell  the  house  before  or  shortly  after  the  payment   reset.  The  5.625  percent  interest  rate  was  half  a  percentage  point  higher  than  the  average   61   interest  rate  for  5-­‐year  adjustable  loans  at  the  time.19  We  were  a  young  white  couple  with   little  credit  history  buying  our  first  house.  Our  primary  borrower  had  good  but  not  perfect   credit.  Even  though  we  were  talked  into  an  ARM,  which  may  or  may  not  have  been  the  best   choice  for  us,  and  the  interest  rate  was  slightly  above  average,  the  loan’s  terms  were  not   out  of  sync  with  our  underwriting  criteria.  This  was  not  true  for  millions  of  African   American,  Hispanic,  non-­‐English-­‐speaking,  and  single  women  who  were  pushed  into   subprime,  expensive  loans  even  though  they  qualified  from  cheaper  prime  loans.     The  other  loan  on  our  house—a  $10,300  HELOC—was  sold  to  us  as  a  way  to  avoid   paying  primary  mortgage  insurance  (PMI),  which  is  required  when  the  primary  mortgage   is  more  than  eighty  percent  of  the  sales  price.  (In  addition  to  immediately  having  equity  in   the  house,  this  is  also  why  a  20  percent  down  payment  is  considered  ideal.)  Another  virtue   of  the  HELOC  was  that  we  could  borrow  from  the  account  once  we  had  begun  to  pay  it   down—it  became  credit,  not  debt.  Our  broker  explained  to  us  the  terms  of  the  primary   mortgage,  including  his  compensation  for  closing  the  loan.  Randy,  who  was  just  finishing   his  bachelor’s  degree  in  economics  at  the  time,  asked  the  broker  more  incisive  questions   than  I  could  muster  at  the  time  and  read  the  mortgage  documents  in  their  entirety.  Over   time,  it  became  evident  that  information  about  “the  mortgage”  applied  only  to  the  primary   mortgage.  Neither  the  broker’s  explanation  nor  the  mortgage  documents  explained  that  the   HELOC  was  an  adjustable  rate  loan  with  only  a  one-­‐year  teaser  rate  or  that  it  might  be  sold   to  a  third  party.  The  broker  had  told  us  the  company  would  never  sell  our  loan  to  a  third   party.  Our  closing  documents  stated  that  the  company  reserved  the  right  to  sell  our  loan                                                                                                                   19  Historical  interest  rates  are  available  from  the  Freddie  Mac  Primary  Mortgage  Market   Survey:  http://www.freddiemac.com/pmms/pmms5.htm.   62   and  expected  to  do  so  for  zero  to  25  percent  of  loans  originated  in  the  subsequent  year.  At   the  time,  I  did  not  understand  at  all  what  that  meant,  nor  why  it  might  be  undesirable  to   have  one’s  loan  sold.     Upon  closing,  our  mortgage  was  assigned  to  the  Mortgage  Electronic  Registration   System  (MERS).  On  its  website,  MERS  bills  itself  as,  “an  innovative  process  that  simplifies   the  way  mortgage  ownership  and  servicing  rights  are  originated,  sold  and  tracked.  Created   by  the  real  estate  finance  industry,  MERS  eliminates  the  need  to  prepare  and  record   assignments  when  trading  residential  and  commercial  mortgage  loans”  (mersinc.org).   MERS  is  effectively  a  mortgage  industry  database  that  allows  financial  institutions  to   frequently  sell  mortgages  to  other  companies  and  investors  without  paying  title  transfer   taxes  to  counties.  The  practice  of  registering  mortgages  only  with  MERS  greatly  facilitated   the  boom  in  selling  mortgages  on  the  secondary  market,  turning  mortgages  into  mortgage-­‐ backed  securities  and  selling  the  debt  repeatedly  to  new  loan  servicers.  Under  the  MERS   system,  mortgages  remain  listed  with  MERS  at  the  county  level  no  matter  how  many  times   it  is  sold;  MERS’s  own  database  records  the  secondary  sale  of  mortgages.  In  such  a  case,   investors  in  mortgage-­‐backed  securities  own  the  debt  and  the  mortgage  remains  under  the   name  of  MERS.     MERS  effectively  separates  two  deeply  intertwined  entities:  the  mortgage,  which  is   the  legal  instrument  that  gives  the  lender  the  right  to  the  property;  and  the  note,  which  is   the  debt  that  must  be  repaid.  This  has  created  an  enormous  amount  of  legal  confusion   about  who  has  legal  standing  to  foreclose  on  properties—especially  if  MERS,  which  has  no   ties  to  the  debt  and  no  real  interest  in  the  property,  is  able  to  foreclose.     63   Leaving  mortgages  registered  to  MERS  also  deprives  municipalities  of  title  transfer   taxes:  When  a  mortgage  (and  loan)  is  sold,  the  new  owners  are  legally  obligated  to  register   their  interest  in  the  property  with  the  county  register  of  deeds  and  pay  title  transfer  taxes.   MERS  supplants  that  public  system  with  a  private  system  of  title  registry,  which  not  only   creates  legal  confusion  and  deprives  counties  of  title  transfer  funds,  but  also  undermines   democratic  governance  (Peterson  2010).  An  additional  problem  is  that,  while  MERS  touts   itself  as  a  market-­‐based  solution  to  cumbersome  state  bureaucracies,  it  undermines  the   central  role  of  the  capitalist  state  to  define  and  enforce  contracts  and  private  property.   Thousands  of  homeowners,  including  several  statewide  class  actions,  have  filed  lawsuits  to   stall  or  reverse  their  foreclosures  because  they  were  initiated  by  MERS.  In  late  2011,   Michigan’s  Supreme  Court  ruled  that  MERS  did  in  fact  have  standing  to  foreclose  in  the   state  (Legal  Lines  2012);  courts  elsewhere  have  similarly  tended  to  favor  MERS.       Busted,  Part  I     Like  millions  of  other  Americans,  I  began  to  realize  the  depth  of  trouble  in  the  US   housing  and  financial  markets  in  the  spring  of  2008.  At  that  point,  foreclosures  had  been   rising  nationwide  for  a  year  and  a  half,  with  1.2  percent  of  all  residential  mortgages  in   foreclosure.  Foreclosures  and  delinquencies  remained  concentrated  among  subprime  loans   and  Lehman  Brothers  had  not  yet  collapsed.  Unlike  some  of  the  most  astute  observers  of   housing  and  financial  markets  (e.g.,  Lewis  2010;  Tett  2009),  I  only  realized  something  was   amiss  when  GMAC  froze  my  HELOC  account.  Without  having  ever  been  late  on  a  payment   (in  fact,  having  paid  on  it  aggressively),  GMAC  notified  me  by  mail  that  we  were  no  longer   allowed  to  borrow  from  the  account,  as  a  way  for  the  company  to  insulate  itself  against   64   losses.  It  didn’t  freeze  all  the  lines  of  credit  in  its  portfolio.  What  I  understood  from  the   letter  was  that  they  froze  my  loan  because  I  lived  in  a  high-­‐risk  (read:  subprime,  low-­‐ income)  neighborhood.  When  I  complained  about  this  to  a  friend,  she  asked,  “Why?  What   did  you  guys  do  [that  made  them  freeze  the  account]?”  At  that  point,  I  began  to  feel  the   stings  of  blame  that  we  as  a  culture  instinctively  lay  on  debtors  while  giving  creditors  the   benefit  of  the  doubt.     By  the  spring  of  2009,  the  housing  market  collapse  had  undoubtedly  arrived  around   me.  When  I  stood  on  my  porch,  the  five  houses  closest  to  me  had  been  foreclosed  or   abandoned.  Three  houses  across  the  street  had  neon  orange  tags  emblazoning  their  front   doors.  These  stickers—“red  tags”—signal  that  a  house  is  uninhabitable,  either  condemned   for  a  habitability  problem  or,  more  commonly  at  the  time,  because  it  had  been  foreclosed.   The  red  tag  and  padlock  on  the  door  signaled  the  bank  having  locked  out  the  previous   owner.  The  houses  on  either  side  of  mine  had  been  abandoned  by  their  owners  but  for  very   different  reasons.     To  my  south,  Dave  and  Madison  had  bought  their  house,  a  mirror  image  of  my  own   house’s  layout,  in  2005  in  order  to  “flip”  it.  They  bought  it  from  Dave’s  brother,  for  whom   Madison  worked  as  a  real  estate  appraiser.  Their  appraisal  company  valued  the  house  at  an   outsized  $70,000,  though  Dave  and  Madison  only  paid  a  portion  of  that  money  to  Dave’s   brother.  Presumably,  the  rest  of  the  sum  was  money  they  would  use  to  fix  up  the  house  and   resell  it  for  a  profit—though  they  apparently  pocketed  some  of  the  money.  Fraudulent  and   inflated  appraisals  were  one  of  the  many  contributing  factors  to  the  housing  bubble.   However,  the  couple  struggled  to  complete  the  upgrades  themselves  and  their  lack  of   progress  on  the  home  improvements  strained  their  relationship.  When  they  had  their  first   65   child,  they  gave  up  on  the  real  estate  prospecting  and  moved  into  Dave’s  aunt’s  house  in   their  hometown  of  Dewitt  (a  wealthier  suburb  of  Lansing)  after  she  moved  into  an  assisted   living  facility.  This  young  white  couple  had  access  to  a  wide  range  of  financial,  familial,  and   structural  advantages  that  let  them  participate  in  the  speculative  side  of  the  real  estate   boom.  Specifically,  their  ambition  to  think  of  their  house  as  an  investment  to  turn  a  profit  is   one  instance  of  the  speculative  trend  much  cited  in  coverage  of  the  housing  boom.  At  the   time,  cable  television  outlets  were  producing  a  spate  of  shows  on  speculative  real  estate   investing,  including  the  signature  “Flip  that  House,”  which  was  a  top-­‐rated  show  for  The   Learning  Channel.  When  the  investment  was  not  working  out  for  them,  they  had  family  and   financial  resources  that  enabled  them  to  strategically  default  on  the  mortgage.  Since  they   were  not  married  and  had  bought  the  house  only  in  Dave’s  name,  only  his  credit  report   showed  the  foreclosure;  the  couple  planned  to  buy  a  house  in  the  future  under  her  name   and  credit  score.   In  contrast,  the  house  to  the  north  of  mine  had  been  inhabited  by  three  generations  of   a  white  family  beset  with  medical,  economic,  and  social  problems  so  complex  they  were  not   suited  to  live  independently.  The  patriarch  of  the  Watson  family,  John,  suffered  from  severe   diabetes  and  post-­‐traumatic  stress  disorder.  Their  30-­‐something  son  had  developmental   disabilities  and  was  rarely  able  to  hold  a  job.  The  only  working  member  of  the  family  was   the  matriarch,  Joan,  who  used  to  work  for  an  auto  supplier  but  for  most  of  the  time  we   were  neighbors  worked  at  a  chain  restaurant  at  below  a  living  wage.  For  a  couple  of  years,   three  of  their  grandchildren,  aged  4  to  14,  lived  with  them.  Their  house  suffered  serious   maintenance  problems—chipping  asbestos  siding,  missing  shingles,  a  sagging  roof—and   66   there  was  often  an  oppressive  smell  coming  from  their  house  that  dissuaded  me  from  using   my  front  porch  on  hot  days.     The  family  abandoned  the  house  in  stages:  first,  the  grandchildren  moved  in  with   their  mother  in  Georgia.  Later,  Joan  followed  to  help  her  daughter  after  she  had  a  disabling   accident  at  work.  Then,  unable  to  care  for  himself,  John  moved  in  with  one  of  their  grown   sons  living  in  the  Lansing  area,  leaving  only  their  disabled  son  in  the  house.  Eventually  he,   too,  moved  in  with  his  brother.  Months  later,  the  house  was  red-­‐tagged.  Long  before  Joan   moved  to  Georgia,  she  told  me  her  son  was  angling  for  them  to  move  out  of  that  house  and   to  the  country.  Presumably  once  the  family  began  to  separate,  they  could  neither  afford  the   mortgage  nor  desired  to  retain  the  house.     This  family,  far  from  engaging  in  speculation,  had  bought  their  house  around  1995   after  having  rented  it  for  five  years.  They  bought  it  with  a  mortgage  insured  by  the  Federal   Housing  Authority  (FHA).  When  FHA-­‐insured  mortgages  go  into  default,  FHA  (a  division  of   HUD)  pays  off  the  mortgage  lender  and  HUD,  not  the  lender,  takes  possession  of  the   property  rather  than  it  going  through  a  normal  sheriff  sale.  HUD  cleans  out  the  houses  but   sells  them  as-­‐is  (without  repairs)  and  often  at  a  deep  discount.  My  neighbors’  house  was  in   so  dire  a  condition  that  no  clean-­‐up  crew  in  Lansing  was  able  to  prepare  it  for  resale.  A   dozen-­‐man  crew  had  to  be  brought  in  from  Detroit.  At  the  time  of  the  cleanout,  we  learned   that  there  had  been  no  running  water  in  the  house—probably  for  years.  When  we  toured   the  house  (more  on  that  below),  the  kitchen  faucet’s  metal  was  so  pitted  and  scaly  that   merely  touching  it  almost  made  it  crumble  apart.  The  family  had  used  the  bathtub  as  a   toilet,  though  of  course  it  could  not  drain  the  feces.  At  least  one  member  of  the  family   suffered  from  hoarding  problems,  as  well.  The  clean-­‐up  crew  filled  five  construction   67   dumpsters  full  of  their  possessions  and  several  animal  carcasses.  None  of  the  neighbors  I   spoke  with  had  come  close  to  imagining  how  dire  their  living  situation  was,  as  the  Watsons   were  insistent  upon  not  letting  anyone  except  family  members  into  the  house  (including   the  city  workers  who  came  to  change  the  lead  water  service  pipe).  Once  the  house  was   emptied  and  scrubbed,  its  plaster  walls  were  stained  deep  brown  from  a  buildup  of  oil  and   stains  and  powerful  residual  odors  remained.  The  Watsons’  neglect  and  abandonment  of   their  house  mirrors,  in  some  ways,  American  society’s  neglect  and  abandonment  of  its  most   vulnerable  members,  including  the  Watsons.       Tearing  Down  the  House   I’ve  so  far  been  quite  fortunate  as  far  as  the  housing  bust  goes.  When  our  interest   rate  reset  in  June  2010,  mortgage  rates  were  at  historic  lows.  Our  interest  rate  lowered   from  5.625  to  3.375  percent,  meaning  that  our  already  affordable  mortgage  payment   decreased  by  20%.  Whereas  millions  of  Americans’  with  ARMs  received  payment  shocks   when  their  interest  rates  and,  therefore,  payments  went  up,  we  were  fortunate  by  sheer   luck  to  benefit  from  the  fallout  of  the  credit  crisis.  Furthermore,  neither  Randy’s  nor  my  job   at  the  university  was  affected  so  we  continued  to  earn  the  same  salaries  and  put  moderate   amounts  into  savings.     Like  many  middle-­‐class  Americans  who  managed  to  have  cash  on  hand  after  the   bubble  burst,  we  were  able  to  capitalize  on  stunningly  low  real  estate  prices  in  the  wake  of   the  housing  bust.  When  the  Watsons’  house  went  up  for  sale,  we  and  our  neighbor  on  its   other  side,  Sarah,  immediately  independently  called  the  realtor  to  find  out  the  asking  price.   Being  that  it  was  a  HUD  repossession,  the  house  would  be  sold  via  closed  auction—no   68   bidder  knows  another’s  bid—with  an  opening  bid  of  $5,000.  Bidding  would  first  be  open  to   owner-­‐occupants  (no  investors/landlords)  for  two  weeks,  then  open  up  to  investors  if  HUD   had  not  received  an  acceptable  bid.  Chatting  one  day  about  our  fears  that  someone— anyone—would  buy  the  house  and  perhaps  be  as  difficult  as  the  previous  owners,  Sarah   and  I  decided  to  bid  on  the  house  together,  saving  half  the  cost.     Sarah’s  family  had  long  been  my  favorite  neighbors  on  the  block.  Sarah  lived  with   her  partner  Neil  and  grown  daughter  Molly.  She  bought  her  house,  a  tidy  yellow  bungalow,   30  years  prior  and  raised  her  three  children  there.  She  was  a  gifted  gardener  and  she  and   Neil  worked  most  afternoons  and  weekends  in  the  garden  or  on  home  improvement   projects.  Molly  did  not  participate  in  these  projects  because  of  her  cerebral  palsy,  which  left   her  with  one  stunted  arm.  Most  warm  afternoons  after  work,  Molly  jumped  rope  on  the   sidewalk  for  exercise  or  read  on  the  porch  but  would  drop  her  activities  to  come  warmly   hug  me  as  I  came  or  went.     Sarah  and  I  agonized  over  how  much  to  bid  on  the  house.  Empty  plots  of  land  in   Lansing  sold  for  about  $6,000  at  the  time  so  we  knew,  both  financially  and  viscerally,  that   the  house  was  a  liability.  It  would  cost  at  least  $30,000  to  $50,000  to  rehabilitate  it  inside   and  out.  After  accounting  for  the  cost  of  renovations,  the  house  would  be  as  expensive  as   many  other  more  appealing  ones  on  Lansing’s  glutted  real  estate  market.  Even  so,  it  would   still  be  situated  on  a  31-­‐foot-­‐wide  lot,  sitting  a  mere  two  feet  away  from  my  house  at  the   point  where  our  houses’  dining  room  bay  windows  faced  directly  into  one  another.  We   reasoned  that  either  we  would  buy  it  and  tear  it  down,  or  it  would  remain  decrepit.  Upon   winning  the  auction  with  our  $5,100  bid—the  only  one  submitted—we  drew  up  plans  to   tear  down  the  house  and  subdivide  the  lot.  On  our  half,  we  put  in  a  driveway  so  we  would   69   no  longer  share  one  with  the  neighbors  on  our  other  side  (the  new  occupants  of  Dave  and   Madison’s  house).     Tearing  down  a  house  goes  surprisingly  quickly—that  is,  after  all  the  permits  are   taken  care  of  and  the  bulldozers  show  up.  Most  of  the  residents  on  our  block,  adults  and   children  alike,  came  out  to  watch  the  house  being  chomped  apart  by  sundry  large   machines.  By  11:00am,  the  building  was  down.  Part  of  me  felt  sad  that  the  house  couldn’t   be  saved:  I  wanted  it  to  have  been  useful  for  a  family  who  needed  a  home;  I  wanted  it  not  to   have  been  wrecked  by  the  Watsons;  I  wanted  the  Watsons  not  to  have  such  hard  lives.  I   also  worried  about  changing  the  character  of  the  neighborhood.  Although  we  had  lived  in   the  neighborhood  for  five  years,  Randy  and  I  knew  it  was  not  our  lifetime  neighborhood.   Having  both  grown  up  middle  class,  our  poverty-­‐level  income  was  a  temporary  way  station   during  college  and  graduate  school;  for  the  rest  of  our  neighbors,  this  was  a  permanent   income  level  and  neighborhood.  Would  the  extent  of  improvements  to  our  house  and  lot   begin  to  price  out  residents  with  more  modest  incomes?  By  tearing  down  this  destroyed   house,  were  we  gentrifying  the  neighborhood—and  was  that  a  bad  thing?  I  took  comfort  in   the  fact  that  Sarah  had  lived  there  30  years,  also  had  the  means  to  pay  for  this  project  out  of   pocket,  and  was  even  more  enthusiastic  about  it  than  us  (though  that  hardly  felt  possible).   Further,  how  would  the  Watsons  feel  when  they  drove  by  and  saw  the  empty  lot?  A  woman   I  interviewed  told  me  it  was  “hell”  to  drive  by  the  lot  that  used  to  contain  her  childhood   home—until  her  parents  lost  it  to  foreclosure  after  being  caught  up  in  a  real  estate  scam   perpetrated  by  her  nephew.  I  wanted  to  believe  that  the  Watsons’  house  was  so  far  beyond   repair  that  it  was  a  special  case  but  I  have  no  way  of  knowing  how  they  feel  about  our   demolition  of  their  former  home.   70   Mostly,  as  the  crew  tore  down  the  house,  I  was  amazed  and  thrilled  to  see  the  sun   shine  for  the  first  time  on  the  north  side  of  my  house,  to  get  physical  and  psychic  breathing   room.  When  the  city  inspector  came  by  to  make  sure  the  utilities  had  been  properly  cut  off   and  buried,  he  thanked  us  for  having  torn  it  down.  Michigan  cities  have  taken  possession  of   unprecedented  numbers  of  foreclosed  and  abandoned  properties  in  recent  years.  Had  no   one  bought  the  Watsons’  house  from  HUD  within  60  days,  the  local  government  could  have   bought  it  and  other  HUD  homes  in  bulk  for  as  little  as  $100  apiece.  It  would  have  likely   been  obtained  for  the  Ingham  County  Land  Bank,  whose  mission  is  “improving  the  quality   of  our  neighborhoods  and  strengthening  our  communities…[by]  return[ing]  tax  reverted,   purchased,  donated  and  unclaimed  land  to  productive  use  more  rapidly  than  may  have   been  possible  otherwise.”20  Local  governments  and  land  banks  are  required  by  law—but   sometimes  too  strapped  for  money  and  personnel—to  maintain  the  houses  until  they  are   resold  or  torn  down  at  public  expense.  Although  tearing  down  the  Watson’s  house   undoubtedly  improved  the  quality  of  life  for  us,  Sarah’s  family,  and  other  neighbors  who   were  happy  to  see  the  house  go,  I  continue  to  wonder  what  our  potential  gentrifying   project  will  mean  for  the  neighborhood  in  the  long  run.       Busted,  Part  II   Still,  the  housing  bust  has  not  been  entirely  rosy  for  us.  My  father,  who  co-­‐signed  on   our  house,  found  himself  in  his  own  financial  and  real  estate  trouble  in  2010.  He  had   bought  a  house  in  Tennessee  in  2009  and  shortly  thereafter  fallen  in  love  with  and  married   a  woman  in  Florida.  After  he  moved,  the  house  in  Tennessee  had  stood  on  the  glutted                                                                                                                   20  http://www.inghamlandbank.org/about-­‐us.php   71   market  for  a  year  and  a  half  as  he  continued  to  pay  the  mortgage,  causing  him  to  amass   larger  amounts  of  other  kinds  of  debt.  He  alerted  me  that  he  planned  to  declare  bankruptcy,   like  a  million  and  a  half  other  Americans  that  year  (Porter  2012).  What  this  did  was  bring   me  closer  into  the  nitty  gritty  both  of  working  with  a  lender  on  changing  a  mortgage,  and   with  the  emotional  weight  of  the  financial  crisis.  As  he  explained  in  an  email:     I'm  wrestling  with  huge  money  issues—the  [Tennessee]  house  has  cost  me  a  fortune   that  I  didn't  have—and  I'm  considering  filing  for  bankruptcy,  possibly  soon.  And  I   don't  want  your  credit  rating  to  take  a  big  hit  if  I  do.  So  you  should  get  me  off  that   loan  for  your  own  sake.  I'm  sorry  (and  ashamed)  to  be  the  bearer  of  bad  tidings…but   you  deserve  to  know  so  you  can  protect  yourself.         A  year  prior  to  his  email,  a  bankruptcy  law  professor  told  me  that  she  had  seen  an  increase   in  bankruptcies  among  middle-­‐class  Americans  who  had  co-­‐signed  mortgages  with  their   young  adult  children.  In  her  experience,  however,  it  was  the  younger  generation  who  were   falling  behind  on  their  payments.       Even  with  my  extensive  knowledge  of  and  access  to  housing  counseling,  it  took  me   four  immensely  stressful  months  to  figure  out  how  to  disentangle  my  father  from  our   mortgage.  First  I  suggested  he  consider  a  short  sale  or  a  deed-­‐in-­‐lieu  of  foreclosure  instead   of  filing  for  bankruptcy  at  all,  since  his  house  was  his  primary  albatross.  “Thing  is,”  he   countered,  “you  can't  get  a  short  sale  unless  you  get  an  offer,  and  although  I've  dropped  the   asking  price  of  the  house  from  250[,000]  to  160[,000]  (which  definitely  puts  it  in  short-­‐sale   territory),  I've  gotten  no  offers  and  very  little  interest.  Meanwhile,  I've  poured  nearly   $100,000  down  that  hole  (the  down  payment/"equity,"  which  has  totally  evaporated  +   $2000/month),  so  as  I've  struggled  to  hang  on,  I've  created  a  mountain  of  debt,  which  is   about  to  crush  me.  I'm  not  actually  behind  on  anything  yet  except  an  immense  8-­‐ball,  but   I'm  about  to  go  under,  and  I  don't  see  any  good  alternatives.”  Further,  he  couldn’t  do  a   72   Table 3. Bankruptcy and Property Transfer Vocabulary • • • • • • • • Acceleration: demand that a mortgage debt be paid in full, triggered by breaches of contract, sometimes including default. Assumption: a transfer of property that keeps an existing mortgage intact; in this case, the transfer of the loan only. Bankruptcy: legal procedures for debtors to restructure or eliminate debts they cannot pay. Debt-to-income ratio: A common underwriting measure, DTI is one’s monthly debt obligations divided by one’s gross monthly income. Deed-in-lieu of foreclosure: transfer of a deed from a defaulted homeowner back to the mortgage holder. A deed-in-lieu saves the lender the expense of foreclosure and does not damage a borrower’s credit as much as a foreclosure. Refinance: a new mortgage with new terms and borrowers. To be feasible, a house must appraise for a value high enough to cover the outstanding balance or a borrower must pay the difference in cash. Quitclaim deed: a transfer of property where an owner relinquishes his or her legal rights to a property (most often used for transfers between family members or in divorces) Short sale: a sale of a property where a lender agrees to accept less than the full payoff amount owed on a loan. deed-­‐in-­‐lieu  of  foreclosure  because  he  never  got  behind  on  mortgage  payments.  He  could   have  simply  walked  away  from  the  mortgage—like  my  neighbors  Dave  and  Madison.  But,   like  the  vast  majority  of  Americans  who  were  underwater  on  their  mortgages,  he  felt  a   pressing  sense  of  duty,  shame,  and  fear  that  kept  him  from  defaulting.21  Even  if  he  chose  to   default  on  his  mortgage,  that  would  only  rid  him  of  the  house  debt,  not  the  other  debt.       On  the  advice  of  Tami,  a  housing  counselor  I  worked  closely  with  for  the  research,  our   two  options  to  remove  my  dad  from  the  house  were  1)  to  do  an  assumption  through  GMAC   or  2)  to  refinance.  It’s  important  to  bear  in  mind  that  each  of  us  who  signed  the  mortgage   was  listed  on  the  deed,  the  mortgage  and  the  note.  The  deed  is  the  public  record  of                                                                                                                   21  Brent  White  (2010c)  finds  that  while  a  third  of  homeowners  were  underwater  on   mortgages,  only  about  3  percent  of  homeowners  strategically  defaulted.   73   ownership.  The  mortgage  is  the  security  instrument  (contract)  that  gives  the  lender  or   owner  of  the  mortgage  the  right  to  the  property  in  case  of  a  default.  The  note  is  the  debt   itself.  As  discussed  above  regarding  MERS,  these  three  entities  are  usually  so  tightly   bundled  in  a  real  estate  transaction  as  to  appear  the  same.  However,  in  taking  my  father  off   the  house,  different  courses  of  action  touched  some  or  all  of  these  entanglements  and  left   others  menacingly  intact.  I  investigated  the  assumption  and  refinance  simultaneously,  as   my  father  told  me  he  was  desperate  to  file  as  soon  as  possible.     Assuming  the  debt  is  simply  a  bureaucratic  process  with  the  lender  where  we  would   have  absolved  my  father  of  responsibility  for  the  mortgage  and  note.  It  would  have  left  all   the  terms  of  the  existing  loan  intact.  Concurrently,  we  would  have  executed  a  quitclaim   deed  with  the  county  register  of  deeds,  where  he  gave  up  all  legal  rights  to  the  property.   Paired  together,  the  assumption  and  quitclaim  process  would  cleanly  sever  my  father  from   the  mortgage,  note,  and  deed.  By  fall  2010  when  I  inquired  about  the  assumption  process,   GMAC  had  changed  their  procedure  so  that,  instead  of  being  free  or  costing  a  simple   processing  fee,  the  company  charged  $125  to  apply  for  an  assumption  plus  a  fee  of  $600.   With  two  loans—a  primary  mortgage  and  HELOC—this  option  would  cost  $1450  none  of   us  had  to  give  at  the  time.  Randy  had  just  moved  to  Massachusetts  for  a  job  so  we,  too,  were   paying  for  two  households—one  in  high  cost-­‐of-­‐living  Cambridge.  The  last  criterion  was   that  we  could  not  have  a  debt-­‐to-­‐income  ratio  higher  than  43%.  Debt-­‐to-­‐income  (DTI)  ratio   is  a  standard  underwriting  measure.  There  are  two  kinds:  first,  front-­‐end  ratio,  which  is  a   person’s  or  household’s  housing  costs  (mortgage  principal,  interest,  taxes,  insurance,  and   condo  or  homeowners’  association  fees)  divided  by  their  gross  monthly  income.  The  most   conservative  DTI  used  for  underwriting  is  31%,  which  is  considered  a  sustainable  housing   74   burden  and  is  the  benchmark  used  by  the  Obama  administration’s  Home  Affordable   Modification  Program  (HAMP).  Second,  back-­‐end  DTI  includes  all  monthly  debt  obligations:   housing  costs  plus  any  other  recurring  payments  like  car  loans,  student  loans,  child  support   payments—essentially  any  monthly  expense  that  would  show  up  on  a  credit  report.  The   most  conservative  underwriting  standard  is  a  back-­‐end  DTI  of  36  or  38%  but  most  lenders   exceed  this.     Given  mortgage  interest  rates  of  around  4  percent  for  30-­‐year  fixed  mortgages  at  the   time,  refinancing  seemed  more  appealing.  Tami  suggested  refinancing  into  a  single  loan   either  through  GMAC  or  our  credit  union  since  we  could  get  rid  of  the  second  mortgage  all   together  and  obtain  a  lower  interest  rate.  This  required,  however,  that  we  have  20%  equity   in  the  house  at  a  time  when  housing  values  had  dropped  more  than  30%  in  Lansing.  Like  all   homeowners  in  the  area  at  the  time,  I  knew  the  current  market  value  of  my  house  had   dropped  a  lot  but  had  no  firm  sense  of  by  how  much.  We  had  made  significant  upgrades   inside—new  wiring,  furnace,  water  heater,  windows—and  out—not  least  of  which  was  the   driveway  and  extra  half  lot.  I  hoped  that  those  improvements  would  balance  out  the  losses   but  most  homeowners  tend  to  overvalue  their  houses,  especially  if  they  bought  during  the   bubble.  In  order  to  refinance,  the  house  needed  to  appraise  at  a  high  enough  value  to  cover   the  outstanding  mortgage  balance.  The  applicant  pays  approximately  $300  for  the   appraisal  whether  or  not  the  loan  is  approved.       A  loan  officer  at  the  credit  union  explained  to  me  they  would  offer  us  an  interest  rate   of  around  5  and  a  half  percent  if  they  kept  the  loan  in  the  credit  union’s  portfolio—that  is,  if   they  did  not  sell  it  to  another  company  or  pool  of  investors  as  part  of  mortgage-­‐backed   securities.  They  would  offer  us  a  half  percentage  lower  rate  if  we  allowed  them  to  sell  off   75   the  loan.  Lenders  can  benefit  from  selling  loans  to  third  parties  because  they  recoup  the   entire  loan  balance  immediately  rather  than  incrementally  over  the  whole  loan  term.   However,  once  a  loan  is  sold  to  one  outside  servicer,  it  is  likely  to  be  sold  again,  meaning   that  the  borrower  has  to  keep  up  with  a  changing  stream  of  debtors:  When  a  loan  is  sold   three  times  in  two  years,  for  example,  it  becomes  difficult  to  keep  up  with  which  company   you  owe  your  payment  to  and  each  company  has  different  policies  and  procedures  for   paying.  Each  sale  introduces  a  chance  to  make  a  mistake  in  payment.  In  my  observation  at   the  housing  counseling  agencies,  clients  with  third  party  servicers  had  more  difficulty   getting  in  touch  with  their  servicers  and  getting  their  servicers  to  respond  to  their  requests   for  help.  Partly  this  is  because  these  arrangements  separate  the  servicer—the  entity  that   collects  mortgage  payments—from  the  investors,  who  actually  own  the  debt.  When   mortgagors  began  requesting  loan  modifications  from  servicers  in  large  numbers,  servicers   denied  their  requests,  stating  they  did  not  have  the  legal  right  to  do  so  since  investors  had   bought  the  mortgage-­‐backed  securities  with  the  guarantee  of  a  certain  stream  of  income   (based  on  the  original  terms  of  the  loan).  Having  seen  these  patterns  play  out  for  others,  I   opted  for  the  credit  union’s  higher  interest  rate  in  order  to  keep  the  loan  in-­‐house.     Although  our  credit  scores  were  high  enough  to  qualify  for  the  loan  and  our  income   had  recently  gone  up  considerably  because  of  Randy’s  new  job,  we  were  denied  the  loan   even  before  the  appraisal  stage.  Once  the  loan  officer  included  the  cost  of  our  Cambridge   apartment,  our  debt-­‐to-­‐income  ratio  stood  at  56%.  At  the  time  I  sought  to  refinance,  our   credit  union’s  cap  was  48%—far  lower  than  our  56%,  which  was,  in  turn,  far  lower  than   the  average  back-­‐end  debt  of  homeowners  who  received  loan  modifications  under  the   HAMP  program:  77%  as  of  November  2011.  I  was  stricken  that  the  refinance  was  rejected   76   and  Randy  was  outraged.  We  had  a  perfect  payment  history  and  we  had  more  disposable   income  now  than  ever.  How  did  they  reason  that,  under  these  circumstances,  we  would  not   be  able  to  make  a  payment  lower  than  our  current  one?  In  a  backlash  against  the  loose   underwriting  standards  of  the  early  2000s,  lenders  had  tightened  their  underwriting   practices  so  much  that  very  few  people  could  obtain  credit.       With  both  the  assumption  and  refinance  options  having  failed,  I  began  to  panic  about   my  father’s  impending  bankruptcy.  “SHIT,”  I  wrote  to  my  father.  He  reiterated  that  his   bankruptcy  attorney  said  our  credit  rating  would  suffer  if  he  were  still  on  our  mortgage   when  he  filed  for  bankruptcy,  and  that  he  was  sorry  this  was  painful  for  Randy  and  me.       With  the  seeming  inevitability  that  he  would  be  on  our  mortgage  when  he  filed   chapter  7  bankruptcy,  I  started  looking  more  deeply  and  frantically  into  the  consequences   of  that.  Chapter  7  bankruptcy  is  also  known  as  “liquidation,”  meaning  that  the  filer  cannot   keep  any  assets  above  a  modest  threshold—for  example,  my  father  had  to  sell  his  turbo-­‐ charged  Subaru,  trading  in  for  a  used  Volvo  whose  value  could  not  exceed  $4,000.  In   exchange,  the  Chapter  7  wipes  out  the  filer’s  outstanding  debts  (except  any  they  “reaffirm”)   and  his  or  her  creditors  cannot  contact  them  anymore  to  demand  payment.  Importantly,  in   my  increasing  panic,  I  did  not  think  about  how  reaffirmation  would  work  nor  did  anyone   else  bring  it  up  to  me.  Far  from  my  being  alone,  most  of  us  experience  partial  thinking  and   failures  of  rationality  under  the  kind  of  stress  that  possible  home  loss  brings  up  (Fields,   Libman  and  Saegert  2010;  White  2010a).     The  next  terrifying  possibility  was  that  our  house  might  be  considered  one  of  his   assets—since  it  was,  after  all,  legally  his  second  home  and  not  our  first  home—and   required  to  be  put  up  for  sale.  Chapter  7  filers  can  keep  their  primary  residences  so  long  as   77   they  do  not  have  more  than  a  certain  amount  of  equity  in  their  homes.  However,  our  house   was  not  his  primary  residence  and  I  had  no  idea  how  much,  if  any,  equity  we  had  in  the   house.  My  dad’s  bankruptcy  attorney  had  never  suggested  that  our  house  would  be   considered  one  of  his  assets,  only  one  of  his  liabilities  but  he  could  not  get  further  answers   from  the  attorney.  My  dad  rebuffed  my  request  to  talk  to  his  bankruptcy  attorney,  sounding   exasperated—with  me,  the  attorney  or  the  whole  situation  was  never  clear  to  me.       Even  if  we  wouldn’t  have  to  surrender  the  house  in  the  bankruptcy  settlement,  I   worried  about  its  implications  with  GMAC.  Mortgage  contracts  can  have  conditions  that   trigger  “acceleration.”  When  a  borrower  breaches  the  contract  in  any  of  the  ways  defined   by  the  acceleration  clause,  the  lender  can  accelerate  the  loan—that  is,  call  it  due  in  full.  In   that  case,  a  borrower  must  either  pay  the  full  outstanding  balance  or  surrender  the  house   to  satisfy  the  debt.  We  didn’t  have  $1450  to  assume  the  debt  even  if  we  qualified,  nor  could   we  refinance;  if  the  loan  were  accelerated,  the  house  would  clearly  be  put  up  for  sale  with   the  proceeds  paying  off  my  dad’s  debts.  At  this  point,  I  began  suppressing  panic  attacks.   Staff  members  in  GMAC’s  customer  service  and  assumption  departments  had  no  further   advice.  It  was  not  until  about  six  weeks  later  that  I  learned,  by  accident,  that  the  company   has  a  separate  bankruptcy  department.  Learning  which  departments  exist  at  a  lender  is  no   trivial  matter.  In  a  five-­‐day  training  I  attended  for  housing  counselors,  the  trainers  spent  an   entire  morning  discussing  the  structure  and  functions  of  the  loss  mitigation  department.   Other  researchers  studying  foreclosure  mitigation  counseling  find  that  homeowners  have  a   hard  time  learning  that  loss  mitigation  exists  (Fields,  Libman,  and  Saegert  2010)  or   navigating  its  Byzantine  structure  on  their  own  (Herbert  and  Turnham  2010).     78     Adding  to  my  stress,  I  could  not  investigate  the  acceleration  clause  immediately   because  Randy  had  taken  almost  all  of  our  possessions  to  Cambridge  when  he  moved,   including  the  mortgage  documents.  He  scanned  the  contract’s  54  pages  and  emailed  them   to  Tami  and  me.  Joyously,  bankruptcy  did  not  trigger  acceleration  of  the  loan.  Since  we   would  not  have  to  sell  the  house,  the  outstanding  questions  then  were:  what,  if  anything,   does  this  mean  for  my  and  Randy’s  credit  scores?  And  what,  if  anything,  can  and  should  we   do  about  the  bankruptcy?  Tami  confirmed  through  a  list-­‐serv  of  other  housing  counselors   that  my  dad’s  bankruptcy  filing  would  not  reflect  on  either  my  or  Randy’s  credit  reports   even  though  we  shared  this  one  account.       With  the  issue  of  the  bankruptcy’s  (non)  effect  on  our  credit  scores  resolved,  the  last   remaining  question  was  what  to  do  about  my  dad’s  presence  on  the  deed.  Using  a  quitclaim   template  a  housing  counselor  downloaded  for  me  from  the  Internet,  I  wrote:   That  for  and  in  the  consideration  of  the  sum  of  zero  dollars,  ($0),  the  receipt  of   which  is  hereby  acknowledged,  [my  father]  does  hereby  release,  remise  and  forever   quitclaim  unto  Anna  Jefferson  and  Randall  Juras  all  of  his  interest,  if  any,  in  that   certain  real  property  commonly  known  as  [our  street  address].     With  a  notary’s  signature  and  a  $14  title  transfer  fee,  my  father  had  no  more  legal  claim  on   the  house.  After  four  months  of  confusing  non-­‐answers,  denials,  panic  attacks,  and  familial   strain,  it  seemed  there  was  actually  no  problem  at  all.     Soon  after  filing  the  quitclaim  deed,  I  got  a  letter  that  GMAC  had  sold  our  HELOC   second  mortgage  to  another  company.  I  felt  undermined,  betrayed.  After  my  calls  to  the   assumption  and  bankruptcy  departments,  and  filing  the  quitclaim  deed,  did  they  sell  the   loan  off  in  retaliation?  Contrary  to  their  promises  that  nothing  would  change  after  his  filing,   did  they  consider  us  high  risk  now?  Would  the  new  servicer  honor  the  original  contract   terms  or  did  it  have  some  right  to  accelerate  the  loan?  This  contradicted  what  I’d  been  told   79   at  closing  when  I  bought  the  house  and  undermined  my  hard-­‐won  sense  of  safety  that  my   father’s  bankruptcy  would  be  a  non-­‐event  for  us.  Angry  and  nervous,  I  called  the  new   servicer.  Its  automated  menu  set  up  a  combative  relationship  from  the  start:  “We  are   required  by  law  to  inform  you  that  we  are  a  debt  collector  and  any  information  we  obtain   from  you  will  be  used  for  that  purpose.”     Below  is  a  long  excerpt  of  my  fieldnotes  about  the  interaction.  I  include  it  because   more  than  even  high  quality,  fine-­‐grained  interviews,  it  gives  a  visceral  sense  of  how   maddening,  antagonistic,  and  opaque  these  interactions  with  creditors  can  feel.  I  had  acid   reflux  by  the  time  I  got  off  the  phone  with  the  customer  service  representative  and  I  felt  so   pushed  beyond  my  rational  capacity  that  I  could  hardly  get  out  words  to  capture  it.  Instead,   I  swore  a  lot:   March  8,  2011     I  called  today  just  to  make  sure  everything  had  gone  through  okay  with  our  first   payment  [to  the  new  company]  because  GMAC  sold  our  loan  to  them  in  November  2010.   This  goes  against  the  agent  telling  us  at  closing  that  they’d  never  sell  our  loan.  It  didn’t   mean  much  to  me  at  the  time  but  now  that  I  know  most  of  these  servicers  treat  you  like  a   damn  criminal  (when,  in  fact,  they  do  things  that  feel  criminal);  I  fucking  hate  it.  I  get  so   angry  just  knowing  that  it’s  happened  and  that  now  we  are  powerless  to  get  our  loan  back   into  the  hands  of  any  company  more  sensible.     The  customer  service  representative  I  talked  with  told  me  that  because  there’s  an   active  bankruptcy,  they  cannot  set  up  automatic  withdrawal.  “I  already  have  automatic   withdrawal  set  up  and  it’s  on  an  account  [my  father]  doesn’t  have  anything  to  do  with.  Are   you  telling  me  that  that  set  up  is  going  to  be  canceled?”     “Yes.”   No  one  informed  me  of  this!  Apparently  they  would  put  out  a  cancellation  letter  in  the   mail  (which  is  coming  to  Lansing)  so  between  the  payment  cancellation  and  my  move  to   Massachusetts,  we  definitely  would  have  missed  our  March  payment:  I  would’ve  assumed  it   was  on  automatic  payment,  wouldn’t  have  gotten  the  letter,  and  they  can’t  contact  me  right   now  because  dad’s  in  bankruptcy.  They  aren’t  even  mailing  us  fucking  statements  anymore,   again  because  it  looks  like  collections  activity  that’s  prohibited  by  bankruptcy  protection.  I   can’t  even  ask  them  to  do  this!  It’s  a  perfect  set-­‐up  for  us  to  become  delinquent,  ruin  our   credit,  and  risk  losing  our  house.   “We’re  trying  to  work  on  something  where  our  customers  in  bankruptcy  could  still   receive  statements  but  it  has  to  go  through  our  legal  team  and  make  sure  everything  we’re   80   doing  would  be  legal.”     If  I  want  to  be  included  in  those  who  get  the  statements—whenever  the  company-­‐ wide  policy  would  be  enacted—I  can  send  a  letter  to  their  physical  location  asking  to  be   included  in  that  group.     “Send  the  letter,  just  make  sure  not  to  send  your  payment  with  it  because  letters  tend   to  get  lost.”     Did  she  really  just  admit  to  me  that  they  lose  (or  ignore?)  their  letters?!  At  least  she’s   honest  but  my  god,  how  bad  must  it  be  if  they  warn  everyone  in  advance  that  their  mail   might  not  get  delivered?  This  does  not  inspire  confidence  that  they  give  two  shits  about  the   people  who  are  their  clients,  the  people  whose  houses  they  could  foreclose  on.  And  perhaps   foreclose  on  them  just  because  they  lose  or  are  careless  with  their  mail.   They  won’t  even  give  me  online  access  so  I  can  check  the  amount  due!  I  ask  her,   totally  exasperated,  “Do  you  want  me  to  pay  this  account?”     Her  response,  to  my  even  greater  annoyance,  is  that  they  can’t  tell  me  either  way  but  I   should  contact  my  bankruptcy  attorney  (Fuck!  I  don’t  have  a  bankruptcy  attorney!)  and  it   would  be  based  on  their  advice  whether  or  not  to  pay  the  loan!     This  catches  me  totally  by  surprise  because  I  went  through  the  whole  gut-­‐wrenching   process  in  the  fall  to  figure  out  if  dad’s  bankruptcy  would  call  the  whole  loan  due,  or  ruin  or   credit,  or  etc.,  etc.  And  in  the  end,  GMAC  told  me  it  was  fine;  Tami  and  GMAC  assured  me   that  his  bankruptcy  can’t  affect  our  credit  whatsoever  at  all,  and  I  just  keep  making  my   normal  payments  to  GMAC.  I  did  all  that  and  everything  was  in  the  works  for  dad’s   bankruptcy,  all  ready  to  pull  the  pin  and  wham!—only  at  this  late  point  in  the  game  do  I   find  out  our  loan  has  been  sold  at  all.  I  realize  this  is  a  little  bit  of  a  special  case  because  one   person  on  the  loan  is  in  bankruptcy  and  we’re  not.     Reflecting  back  on  these  fieldnotes  and  labyrinth  of  failed  attempts  to  remove  my   father  from  our  mortgage,  I  would  not  prefer  that  bankrupt  Americans  continue  to  be   harassed  by  their  creditors  even  after  filing.  I  would  not  prefer  that  mortgage  underwriters   go  back  to  offering  loans  to  applicants  with  enormous  debt  ratios  and  unsustainable   payments.  My  own  experience  with  the  fallout  of  the  housing  crisis,  like  many  of  the   homeowners  I  interviewed,  was  that  I  desperately  wished  the  employees  of  financial   institutions  were  allowed  to  exercise  more  compassion,  common  sense,  and  reasoned   judgment.     I  also  wanted  to  feel  that  my  agency  mattered  more  to  the  whole  process,  especially   when  the  loan  was  sold  off.  I  felt  “powerless”  to  “get  my  loan  back  in  the  hands  of  any   81   company  more  sensible.”  The  market  had  not  empowered  me  as  a  consumer  to  choose  my   transactors.  I  had  no  choice  about  having  my  loan  sold  off  or  to  whom.  And  there  was  no   way  out.  Traditionally  the  options  out  of  a  mortgage  are  to  refinance  or  to  sell  the  house.   Refinancing  had,  by  that  point,  been  a  painful  farce.  Eighteen  months  later  when  we  tried  to   sell  the  house  at  a  loss,  we  had  only  two  showings  in  three  months  and  no  offer.  When   pressed  about  the  current  state  of  the  market,  the  realtor  reassured  me  emphatically  that,   indeed,  some  houses  were  selling  in  Lansing.  They  were  just  $15,000-­‐$20,000  foreclosures   or  energy  efficient  gut-­‐rehab  renovations  by  the  Ingham  County  Land  Bank  for  about   $60,000.  No  one  with  a  budget  at  our  asking  price  would  choose  to  live  in  Lansing  when   foreclosures  in  more  attractive  cities  were  available  for  the  same  cost.  This  is  what  being   locked  in  underwater  means.  And  I  was  lucky—my  spouse  and  I  both  had  stable,  well-­‐ paying  jobs  elsewhere  and,  while  not  comfortable,  we  could  imagine  holding  out  for  an   indefinite,  uncertain  future  “for  the  market  to  turn  around”  or  absorbing  whatever  loss  we   might  have  to  take  to  sell  it.  The  promises  not  just  of  owning  a  home  but  of  the  whole   market  had  become  grotesque.   Lastly,  I  want  to  emphasize  that  in  spite  of  the  stress  and  confusion  I  had  because  of   my  dad’s  bankruptcy,  our  process  was  immensely  easier  than  that  for  most  Americans  who   try  to  navigate  a  problem  they  encounter  with  their  mortgages.  We  had  structural   advantages:  all  having  grown  up  middle  class,  being  white,  and  speaking  English  as  a  first   language.  We  all  have  moderate  to  high  levels  of  financial  literacy.  My  husband  holds  a   Ph.D.  in  economics  and  I’m  an  expert  on  the  housing  and  financial  crises.  At  the  time,  I   spent  three  days  a  week  with  several  housing  counselors.  Unlike  their  clients,  I  did  not  have   to  wait  for  them  to  answer  90  other  phone  messages  or  be  at  imminent  risk  of  foreclosure   82   before  my  problem  rose  to  the  top  of  the  pile.  I  didn’t  even  have  to  make  an  appointment.   My  father  had  the  ability  to  hire  a  bankruptcy  attorney.  These  advantages  of  background   and  access  absolutely  helped  me  understand  and  confront  my  father’s  bankruptcy,  but   none  of  them  should  be  required  for  a  struggling  person  to  receive  useful,  accurate   information  or  a  fair  resolution  to  their  housing  troubles.     83     Chapter  3:  “Not  what  it  used  to  be:”  Schemas  of  Class  and  Contradiction  in  the  Great   Recession     The  foreclosure  crisis  and  Great  Recession  it  caused  have  significantly  exacerbated   40  years  of  rising  inequality  in  America.  Widespread  concern  about  the  “struggling  middle   class”  among  the  public  and  politicians  epitomizes  Americans’  anxiety  about  inequality  and   the  country’s  claim  to  great  nationhood.  In  this  chapter,  I  examine  the  restructuring  of  class   experiences  and  discourses—but  not  ideology—for  Michigan  homeowners  and  non-­‐profit   housing  counselors.  First,  I  examine  homeowners’  downward  mobility,  then  turn  to  all   participants’  analyses  of  the  American  class  system.  Undergirding  both  forms  of  analysis   are  schemas  of  contradiction  and  loss  that  signal  reduced  forms  of  citizenship.     This  chapter  is  organized  into  4  sections  describing  Michigan’s  history,  and  my   informants’  senses  of  decline  and  nostalgia.  First,  I  provide  history  of  Lansing,  my  primary   field  site  and  Detroit,  a  site  of  secondary  research,  focused  on  each  one’s  histories  of   housing  and  the  auto  industry.  I  focus  on  the  latter  precisely  because  of  the  mythic  quality   it  has  taken  on  in  both  local  and  national  usages.22  Next,  I  turn  to  participants’  nostalgic   recollections  of  history  and  its  use  to  frame  narratives  of  decline.  Third,  I  bring  the  analysis   back  to  the  present  housing  crisis  to  examine  homeowners’  downward  mobility.  Lastly,  I   critically  examine  what  participants  considered  to  be  at  stake  with  this  historical  rupture   and  increasing  polarization.   Homeowners  emphasized  their  downward  mobility  to  current  positions  in  poverty   or  an  in-­‐between  space  like  “middle  working  poor.”  Such  complex  self-­‐locations  are  not   only  about  class  shame  or  the  inadequacy  of  American  class  discourse;  rather,  they  are                                                                                                                   22  The  historiography  also  reflects  a  preference  for  automotive  history.   84   about  maintaining  citizenship  status.  Being  middle  class  is  a  cornerstone  of  the  American   nation-­‐building  project,  most  closely  linked  to  the  post-­‐World  War  II  era  (Ortner  2003;  May   2008).  For  Michiganders,  these  are  the  halcyon  days  of  auto  unions  their  parents  and   grandparents  built,  even  if  their  nostalgic  attachment  to  the  era  is  somewhat  divorced  from   its  realities  (Fine  2004;  Chinoy  1992).  Downward  mobility  for  homeowners,  then,   threatens  not  just  material  loss  or  self-­‐definition,  but  alienation  from  the  nation  (cf.  Cohen   2003).  When  Michiganders  identified  as  “middle  working  poor”  and  other  permutations,   they  struggled  to  reconcile  downward  mobility  with  claims  to  current  rights  and  their  own   history.     Homeowners  and  housing  counselors  often  tied  current  class  polarization  to  the   long-­‐term  decline  of  the  manufacturing  economy  and  American  greatness.  Their  common   perception  that  being  middle  class  is  “not  what  it  used  to  be”  underscores  the  importance   of  historical  consciousness,  especially  to  the  mid-­‐twentieth  century,  to  definitions  of  middle   class  standing  as  equal  to  financial  security.  In  contrast,  the  present  moment  is  inhabited  by   an  embattled  “average  middle  class  poor  person.”  Equating  the  middle  class  to  poverty   echoes  scholarship  showing  that  financial  precarity  is  a  defining  feature  of  the   contemporary  middle  class  (Warren  and  Thorne  2012),  while  financial  stability  remains   one  of  the  most  deeply  held  objects  of  economic  desire  (Pew  Charitable  Trusts  2011).   Experientially,  my  participants’  analyses  show  simultaneous  angst  over  and  normalization   of  inequality.  Because  of  the  centrality  of  middle  classness  to  affirmative  citizenship  in  the   US,  the  hollowing  out  of  the  middle  class  is  experienced  as  a  citizenship  of  lack  and   contradiction.       85   The  Rise  and  Restructuring  of  Michigan’s  Industrial  Cities     Although  Detroit  quickly  became  the  center  of  the  American  auto  industry,  the  first   enterprise  dedicated  to  manufacturing  gas-­‐powered  automobiles  was  Olds  Motor  Works,   founded  in  Lansing  in  1896  by  Ransom  E.  Olds,  giving  it  claim  as  “the  first  Auto  City”   (Rodriguez  2004).  As  the  home  of  several  important  agricultural  and  motor  manufacturers,   Lansing  had  a  large  pool  of  skilled  labor,  including  machinists,  engineers,  and  mechanics  (in   the  early  days,  from  bicycle  shops).  Even  as  the  city  grew,  reaching  a  population  of  60,000   by  1917,  Lansing  retained  rural  connections  and  a  racially  homogenous  identity.  The   population  was  overwhelmingly  white,  Protestant,  and  U.S.-­‐born.  In  the  1910  Census,   nearly  99  percent  of  residents  were  classified  as  white,  with  62  percent  “native-­‐born   whites  of  native-­‐born  parents”  (Fine  2004:18).  Lansing’s  business  leaders,  including  the   prominent  R.E.  Olds,  self-­‐consciously  worked  to  maintain  the  city’s  conservatism,   homogeneity,  and  stability  of  the  workforce  at  Reo  Motors  (Fine  2004;  Rodriguez  2004).     R.E.  Olds  and  his  managers  were  particular  boosters  of  welfare  capitalism  as  a   means  of  forging  a  “family  ethic”  in  the  shop,  blunting  the  appeal  of  Communism,  and   aggressively  Americanizing  its  foreign  workers  (Fine  2004;  Rodriguez  2004).  In  the  first   decades  of  the  20th  century,  this  family  ethic  brokered  a  “paternalistic  bargain”  for  workers,   offering  “job  security,  a  family  wage,  and  fair  treatment  in  exchange  for  workers’   quiescence  and  cooperation”  (Fine  2004:7;  13-­‐14).  And  it  appeared  to  be  a  bargain  Lansing   workers  were  eager,  for  the  most  part,  to  accept.  Generations  of  families  worked  at  the   plant  so  that  the  Reo  family  and  the  blood  family  were  fused.     Civic  culture  in  Lansing  also  centered  on  Reo  and  other  manufacturers,  echoing  the   forging  of  corporate  hegemony  described  by  Nash  (1989)  in  her  study  of  Pittsfield.   86   Corporate  hegemony  entails  corporate  cooptation  of  workers’  struggles,  plus  the  funneling   of  state  resources  toward  corporate  welfare.  These  are  buoyed,  according  to  Nash  (1989)  ,   through  ideology  where  workers  identify  their  own  values  and  interests  with  those  of  the   company  and  its  elites.  In  Lansing,  Reo  was  an  enthusiastic  participant  in  welfare   capitalism  and  infusing  its  identity  into  the  life  of  the  community.  Throughout  the  early   decades  of  the  twentieth  century,  Reo  hosted  company  picnics  and  was  a  prominent   sponsor  of  public  holiday  celebrations  and  festivals.  The  Chamber  of  Commerce  dedicated   its  activities  to  attracting  businesses  that  paid  a  family  wage  so  the  city  could  maintain  a   stable  working  class—one  affixed  to  “what  they  considered  core  values—religion,  loyalty   and  pride  of  country,  the  work  ethnic  [sic],  traditional  family  roles,  home  ownership,   ‘respectable’  leisure,  and  an  intense  localism”  (Fine  2004:27).  In  1910,  45  percent  of  Reo   workers  in  the  Census  who  were  heads  of  their  household  owned  or  were  buying  their   homes  with  a  mortgage  (Fine  2004:33),  compared  to  61  percent  of  Michiganders  overall   (Census  2011a),  attesting  to  the  centrality  of  homeownership  in  workers’  strives  for   upward  mobility  (Chinoy  1992).     Whether  understood  through  the  lens  of  corporate  hegemony,  welfare  capitalism,  or   intense  localism,  Lansing’s  politics  were  shaped  by  its  identity  as  a  small  city,  where  there   was  little  physical  or  social  space  separating  workers  from  their  managers  and  company   owners.  Lansing  workers  purchased  homes,  mostly  modest  bungalows  that  still  stand  in   neighborhoods  surrounding  downtown.  South  of  downtown  and  the  Grand  River,  where   the  Reo  factory  stood,  has  been  reshaped  by  the  construction  of  I-­‐496,  bifurcating  the   city—as  so  many  others—with  a  thoroughfare  cutting  through  what  was  the  heart  of   thriving  African  American  neighborhoods  during  1960s  urban  renewal  campaigns.  The   87   south  side  now  has  a  mix  of  residential  spaces,  from  workers’  pre-­‐war  bungalows  and   elegant  brick  mansions  of  industry  elites,  to  modest  brick  ranches  in  post-­‐war  suburban   lots.  West  and  east  of  downtown,  in  neighborhoods  like  mine,  the  houses  remain  mostly   pre-­‐war  bungalows  and  slightly  more  upscale  four-­‐squares.     Although  Lansing’s  economy  has  always  been,  and  remains,  more  diversified  than   Flint  or  Detroit,  by  virtue  of  the  state  government,  Michigan  State  University,  two  large   hospitals,  and  several  insurance  companies,  city  residents  still  remain  romantically  and   materially  linked  to  the  auto  industry.  Oldsmobile  was  headquartered  in  Lansing  until  the   brand  went  under  in  2004.  Today,  Lansing  houses  two  of  General  Motors’  modern  factories,   including  the  company’s  flagship  “green”  (LEED-­‐certified)  Lansing  Delta  Township  plant.       More  than  Lansing,  Detroit  has  a  special  place  in  the  national  imaginary:  as   headquarters  of  the  auto  industry  that  defined  welfare  capitalism  and  the  blue-­‐collar   middle  class;  as  one  of  the  great  African  American  cities;  and  as  emblematic  of   postindustrial  decline,  white  flight,  and  urban  violence.  A  brief  history  of  Detroit’s  housing   market  shows  how  race,  class,  place,  and  history  deeply  intersect  as  means  of  “identifying   individuals  and  positing  the  significance  of  their  connection  to  collective  orders”  (Hartigan   1999:14).  Detroit’s  housing  market  in  the  1940s  was  entirely  segregated,  with  blacks  living   in  aging  and  over-­‐crowded  housing  stock  from  the  pre-­‐war  period  (Sugrue  1996;  Thomas   1997);  an  inadequate  supply  of  affordable  and  decent  rental  housing  has  been  a  perennial   issue  for  low-­‐  and  moderate-­‐income  African  Americans,  at  least  through  the  1990s  (Shaw   2009).  Blacks  had  the  poorest  paying  industrial  jobs  so  could  not  afford  better  rentals  and   were  shut  almost  completely  out  of  owning  because  of  their  lower  overall  incomes  than   whites,  restrictive  deed  covenants,  and  federal  redlining  that  made  black  neighborhoods   88   ineligible  for  mortgage  insurance  and  subsidies.  After  racial  covenants  were  ruled   unconstitutional  in  1948,  some  white  property  owners  engage  in  anti-­‐liberal  "defensive   localism"  (Sugrue  1996:210)  based  on  language  of  home  owner's  rights—white  Detroiters   founded  192  neighborhood  organizations  from  1943-­‐1965  in  what  Sugrue  considers  one  of   the  most  influential  grassroots  movements  of  the  city's  history.  These  working-­‐class  whites   were  becoming  homeowners  for  the  first  time  so  they  felt  their  grip  on  homeownership   was  tenuous  at  best  and  "to  a  generation  that  had  struggled  through  the  Great  Depression,   the  specter  of  foreclosure  and  eviction  was  very  real"  (213).     White  Detroit  homeowners’  restrictive  politics  found  allies,  in  general,  in  America’s   Cold  War  politics  and,  specifically,  in  the  administration  of  mayor  Albert  Cobo.  Cobo   appointed  members  to  the  Detroit  Housing  Commission  ’s  administration  sympathetic  to   white  homeowners’  associations  who  opposed  liberal,  integrationist,  open  housing  policies.   Opponents  linked  integrationist  urban  planning  explicitly  with  Communism  and  socialism,   labeling  it  as  an  attempt  to  undermine  the  American  family,  the  country's  best  weapon   against  the  Soviets  (also  see  May  2008).  In  1951,  the  city  adopted  a  master  plan  aimed  at   “urban  renewal”  that  would  remove  the  blight  of  ill-­‐kept,  overcrowded  housing  stock  (that   is,  many  of  the  African  American  neighborhoods)  (Thomas  1997).     Sugrue  (1996)  documents  ways  that  the  roots  of  the  city’s  present  crisis  had  already   begun  to  grow  in  the  early  post-­‐World  War  II  years,  even  though  many  Detroiters,   including  my  informants,  recall  the  heydays  of  Detroit  in  the  1960s.  Unemployment  and   inadequate  access  to  housing  have  been  perennial  contours  of  struggle,  especially  for  black   Detroiters.  On  the  employment  side,  deindustrialization  began  in  the  1950s  owing  to   cheaper  labor  in  the  South,  capital  mobility,  decentralization  as  a  strategy  in  lowering  costs,   89   and  automation.  Businessmen  were  blaming  labor  for  high  costs  and  their  decisions  to  flee   urban  centers  as  early  as  the  1950s  (Sugrue  1996;  c.f.  Adler  2001).     Responding  to  realtors’  block-­‐busting,  white  residents  were  decamping  to  the   suburbs  as  African  Americans  moved  westward  from  traditional  neighborhoods  on  the   eastside.  Still,  black  Detroiters  continued  to  live  in  substandard  housing  in  segregated   enclaves,  suffering  from  a  lack  of  recreational  facilities,  from  overcrowded  public  schools,   contentious  relations  with  the  Detroit  Police  Department,  and  disproportionate   unemployment  (Fine  2007;  Shaw  2009).  Young  black  Detroiters,  in  particular,  allied  with   Black  Nationalism  and  radical  protest  traditions  to  demand—not  always  successfully— more  public  housing  units,  improved  housing  conditions,  and  welfare  rights  (Shaw  2009).   In  spite  of  some  black  Detroiters’  discontent,  under  Mayor  Jerome  Cavanagh  (1962-­‐1969),   Detroit  enjoyed  a  national  reputation  as  a  “model  city”  for  race  relations  until,  like  other   major  cities  in  the  1960s,  violence  erupted  on  July  22,  1967.     The  proximate  cause  of  the  riot  was  that  after  police  raided  a  blind  pig  (an  after-­‐ hours  drinking  and  gambling  club)  in  the  over-­‐crowded  12th  Street  area,  young  men  began   throwing  empty  liquor  bottles  and  rocks  at  police.  Although  the  five  days  of  rioting  in  1967   were  the  most  violent  clash  since  riots  in  1943,  the  riots  of  1967  demonstrate  structural   issues  that  plagued  the  lives  of  black  Detroiters  before  and  after  the  episode,  namely   poverty,  underemployment,  and  inequitable  access  to  housing.  Twelfth  Street  was  more   than  twice  as  dense  as  other  neighborhoods  and  at  least  one-­‐quarter  of  the  housing   substandard—a  result  of  the  Cobo  administration’s  earlier  slum-­‐clearing  campaign  in  other   black  neighborhoods  (National  Advisory  Commission  on  Civil  Disorders  1968).  At  first,   looting  was  the  primary  riot  activity  in  the  12th  Street  area,  as  primarily  young  men  raided   90   stores  owned  by  white  and  black  proprietors  alike.  Store  owners  of  any  race  were  equally   likely  to  scrawl  “Soul  Brother”  across  their  establishments  to  proclaim  their  racial   solidarity  and  try  to  protect  their  businesses,  but  were  equally  likely  to  be  looted  (National   Advisory  Commission  on  Civil  Disorders  1968).  During  the  primarily  looting  phase  of  the   riots,  a  carnivalesque  spirit  animated  the  looters.  One  of  my  informants,  Saundra,  then  17,   recalled  that,     [E]verybody  was  grieving  cuz  my  mother  wouldn’t  let  us  take  anything.  We   was  mad  in  here.  They  wouldn’t  let  us  loose,  and  told  us  we  wasn’t  bringing   none  of  that  stolen  stuff  into  the  house,  you  know?  We  was  mad.  Everybody   else  was  coming  back  with  TVs  and  the  neighborhood  was  so  full  of   everything,  so  people  was  really  getting  good  stuff…Nobody  was  beating   anybody  up  or  anything  like  that—it  was  just  a  free  for  all.  Then  when   President  Johnson  stated  that  not  to  shoot  anybody,  then  at  that  point,  it  was   like…hey…and  then  after  they  brought  the  National  Guard  in  was  the  only   way  they  was  able  to  curtail  the  looting.  But  it  was  dangerous  because  us   being  teenagers,  cuz  it  was  like  fun  for  us.  So  people  that  participated  in  the   riot,  you  won’t  get  them  saying  that  it  was  like  the  way  the  TV  tried  to   portray  that  people  scream  for  they  life…and  it  might  have  been  some   incidents  like  that,  but  because  we  were  actually  involved  in  it,  we  didn’t  see   those  moments  like  that.23       Police  did  not  interfere  with  the  looting  because,  the  chief  of  police  reasoned,  if  they  did,   none  of  the  officers  would  have  come  out  alive  and  the  city  would  have  had  a  “race  riot  in   the  traditional  sense”  (National  Advisory  Commission  on  Civil  Disorders  1968).  The  Detroit   police  department  dispatched  much  of  the  force  to  12th  Street  and  to  other  black   neighborhoods  where  no  one  was  rioting.                                                                                                                     23  Interview,  Saundra,  October  20,  2010,  Detroit,  Michigan.  A  survey  conducted  by  the   Kerner  Commission  found  that  11  percent  of  Detroiters  admitted  participating  in  the  riots,   20-­‐25  percent  identified  as  bystanders,  16  percent  as  “counter-­‐rioters,”  and  the  remaining   48-­‐53  percent,  like  Saundra,  did  not  participate  (National  Advisory  Commission  on  Civil   Disorders  1968:6)   91   Looting  turned  to  violence  and  confusion  after  a  rumor  spread  through  the  crowd   that  the  police  had  stabbed  a  young  man  with  a  bayonet.  According  to  the  Kerner   Commission  report  about  the  riots,  the  excessive  law  enforcement  response,  of  the  police   department  and  National  Guard  significantly  exacerbated  tensions  in  the  community  and   worsened  the  violence.  Of  43  (mostly  accidental)  deaths  documented  in  the  riot—33   African  Americans  and  10  whites—three-­‐fourths  were  attributed  to  law  enforcement,   mainly  (20  or  21)  the  Detroit  police  department.     In  the  decades  since  the  riots,  similar  issues  have  continued  to  plague  Detroit   residents,  which  Saundra’s  story  helps  illustrate.  Saundra’s  parents  met  in  Detroit  after   migrating  from  the  segregated  South  in  the  1940s.  She  counts  herself  among  the  last   generation  to  experience  an  idyllic  urban  childhood  before  Detroit’s  neighborhoods   suffered  severe  levels  of  housing  abandonment  and  the  rise  of  the  drug  trade  in  the   1970s.24  To  protect  their  three  daughters  from  property  crimes  and  drug-­‐related   shootings,  Saundra’s  parents  moved  to  a  predominantly  white  neighborhood  to  the   northwest  in  1970—an  area  that,  by  1975,  was  almost  entirely  black.     Saundra’s  parents  paid  off  their  house  and  willed  it  to  their  daughters.  Saundra’s   mother  had,  in  fact,  been  a  vocal  critic  of  mortgages  and  financing  schemes  in  Detroit:  “She   was  telling  people  when  Roth  Financial  and  all  of  them  was  buying  out  television  and   sucking  people  in  back  in  the  90s.  She  would  tell  everybody  on  the  block,  don’t  you   mortgage  your  house.  You  mortgage  your  house,  you’re  gonna  lose  it.  She  said,  this  is  a   trick—she  was  telling  people  this  predatory  lending,  you  gonna  lose  your  house.”  I  discuss                                                                                                                   24  Luke  Bergmann  (2008)  traces  the  complex  ways  that  participants  in  Detroit’s  drug  trade   traverses  between  abandoned  and  rented  houses  as  both  homes  and  “spots”  in  some  of  the   neighborhoods  hardest-­‐hit  by  vacancy  and  out-­‐migration.   92   these  predatory  refinancing  schemes  in  further  detail  in  chapter  6,  but  the  point  here  is   that  the  current  round  of  predatory  lending  and  foreclosures  in  Detroit  is  not  unique.  Even   before  these  1990s  schemes,  working-­‐class  homeowners  in  Detroit  "suffered  from  housing   speculation  scandals  and  escalating  rates  of  foreclosure  due  to  massive  job  losses"  in  the   late  1970s  (Shaw  2009:69).  Such  schemes  feed  on  the  tremendous  emotional  importance  in   Detroit—as  elsewhere—of  homeownership  in  defining  oneself  as  a  good  person  and  a  good   citizen.  One  of  Todd  Shaw’s  informants,  a  housing  rights-­‐activist,  explained  to  him  the   prevalence  of  the  homeownership  impulse  among  African  Americans  who  had  been  so   painfully  excluded  from  the  opportunity  in  the  post-­‐war  years:     Public  housing  is  not  native  to  the  culture  of  African  American  people  in  this   city.  We  are  homeowners.  Individual  homeowners.  And  we  have  never  liked   the  projects  as  a  community.  It  was  more  stigmatized  here,  I  think,  because  if   you  wanted  and  you  saved,  you  could  buy  a  house  in  Detroit.  If  you  were  any   kind  of  person;  if  you  had  anything  going  on…you  could  buy  a  house.  (Shaw   2009:44)       The  comment  also  points  to  the  important  class  divides  among  black  Detroiters.  In  the   1980s,  Detroit  had  a  homeownership  rate  higher  than  the  national  average  and  much   higher  than  the  rate  for  other  principal  cities  (Census  2011b).  For  example,  in  1986,   Detroit’s  homeownership  rate  was  70.5  percent,  compared  to  a  national  rate  of  63.8   percent,  and  48.5  percent  for  central  cities.  At  the  height  of  the  housing  bubble,  just  over   three-­‐quarters  of  Detroiters  owned  their  homes.  Today,  that  rate  has  decreased  by  a   devastating  twenty  percentage  points  (see  Table  1).     I  met  Saundra  through  an  activist  group  in  Detroit  whose  members  had  long  been   involved  in  radical  labor  organizing,  anti-­‐capitalist,  and  anti-­‐racist  causes.  Saundra’s   primary  cause  was  opposition  to  police  brutality,  and  found  the  foreclosure  moratorium   group  through  activist  networking.  She  and  her  sisters  had  recently  lost  the  home  their   93   parents  bought  40  years  prior.  Against  their  late  mother’s  advice  and  Saundra’s  own   resistance,  the  sisters  took  out  a  mortgage  so  they  could  make  urgent  repairs  to  the  house.   The  mortgage  Saundra’s  sister  obtained  ended  up  being  an  adjustable-­‐rate  loan  with  a   balloon  payment.  When  her  disability  payments  decreased,  she  was  not  able  to  keep  up   with  the  payments,  nor  could  Saundra  or  their  other  sister  take  them  over.  When  Saundra   met  the  anti-­‐foreclosure  activists,  she  immediately  became  a  public  face  of  the  cause  at   rallies  naming  and  shaming  banks  about  to  foreclose  on  Detroit  residents.       Eras  of  Economic  Restructuring   The  closing  of  Lansing’s  Reo  plant  in  1975,  in  Fine’s  words,  “foreshadowed  the  de-­‐ industrialization  and  the  creation  of  the  Midwestern  rust  belt  characteristic  of  the  last  two   decades  of  the  twentieth  century"  (2004:  2).  The  housing  crisis  is  a  continuation  of  the   crisis  of  deindustrialization,  if  understood  as  the  global  move  away  from  a  production   economy  to  one  based  on  knowledge  and  finance—and  these  crises  are  experientially   linked  for  people.     Anthropologists  of  deindustrialization  find  workers  feeling  betrayed  by  downsizing   because  it  breaks  the  Fordist  social  compact  (May  and  Morrison  2003).  Thus,  the  central   concern  of  anthropologists  studying  communities  affected  by  deindustrialization  has  been   the  disruption  not  only  to  livelihoods  but  also  to  the  social  and  moral  universe  residents   inhabit  and  remake.  Narratives  from  downsized  workers  tend  towards  both  nostalgia  for   the  glory  days  (Dudley  1994)  and  evince  critiques  of  corporations  as  having  “lost  their   moral  compass”  (May  and  Morrison  2003)  and/or  of  having  abandoned  corporate  and   community  traditions  (Newman  1985;  Nash  1989).     94   Ethnographies  of  deindustrialization  emphasize  narrative  as  a  key  means  through   which  community  members  try  to  understand  what  is  happening  and  how  to  make  sense  of   the  past  in  relation  to  the  present  (O’Hara  2003;  Hart  and  K’Meyer  2003;  Newman  1985;   Dudley  1994).  Even  as  deindustrialization  upends  the  moral  and  social  order,  leading  to  a   possible  “loss  of  interpretive  room”  (O’Hara  2003:44),  deindustrializing  communities   experience  a  liminal  state,  which  are  marked  by  “moments  of  heightened  reflexivity,  during   which  the  spectrum  of  social  (and  business)  rules  and  norms  can  be  reconsidered”  (Hart   and  K’Meyer  2003).     In  larger  cultural  production,  deindustrializing  communities  are  mobilized  as   evidence  in  discourses  of  failure  (Russo  and  Linkon  2003;  Gibson-­‐Graham  1996).  For  Russo   and  Linkon  (2003),  narratives  about  Youngstown  allow  outsiders  to  frame  deindustrialized   cities  as  locations  of  failure,  filled  with  helpless,  dependent,  and  corrupt  residents.  National   narratives  about  Youngstown  do  not  valorize  the  community’s  struggles  against  plant   shutdowns  and  these  kinds  of  neoliberal  framings  that  reproduce  narrative  of  the  working   class  as  disempowered  and,  therefore,  of  the  declining  national  relevance  of  class  (Gibson-­‐ Graham  1996).  MacLennon  (1985)  describes  the  1980  bailout  of  Chrysler  as  “almost  a   mythic  tale,  satisfying  a  cultural  need  for  assurance  that  giant  corporate  bureaucracies  are   in  fact  sound  economic  institutions…the  political  pressure  to  save  jobs  and  protect  cities   where  Chrysler  facilities  were  located  (primarily  in  southeastern  Michigan)  was  the  major   factor  that  triggered  the  Chrysler  loan”  (37).  While  MacLennon  points  to  the  cultural  need   this  narrative  fulfilled,  much  as  narratives  of  resistance  to  shutdowns  in  Youngstown   reinforced  a  positive  identity  for  steelworkers  (Russo  and  Linkon  2003),  she  concludes  the   story  with  a  clause  that  is  much  more  revealing  for  the  development  of  neoliberal   95   capitalism  and  foreshadows  the  GM  bankruptcy  of  2008:  “[S]aving  employment  soon   became  of  secondary  importance  to  the  task  of  saving  the  company  financially  at  the   expense  of  workers  and  communities  housing  the  plants”  (37).  MacLennon’s  finding  signals   the  changing  orientation  of  managers,  investors,  and  government  actors  toward  finance  as   their  orienting  logic  in  neoliberalism.     Workers  and  other  community  members  have  remained  deeply  committed  to  the   success  of  their  employers  in  face  of  these  difficult  changes,  both  from  entrenched  loyalty   and  the  necessity  of  keeping  work  in  their  communities  (Nash  1989;  Burawoy  1979).   Lansing,  Detroit,  and  the  state  of  Michigan  are  no  exceptions.  Former  Lansing  mayor  David   Hollister  spearheaded  a  five-­‐year  campaign  by  city  boosters  to  keep  GM  producing  cars  in   the  city  when,  in  1997,  GM  threatened  to  end  all  production  in  the  city  after  Oldsmobile’s   centennial.  Eventually,  Hollister’s  Keep  GM!  campaign  resulted  in  GM  building  two  modern   plants  in  the  greater  Lansing  area,  Lansing  Grand  River  and  Lansing  Delta  Township,  the   first  LEED-­‐certified  factory  in  the  country.  The  last  Oldsmobile  was  produced  in  Lansing  in   2004  and  GM  shuttered  the  Fisher  Body  shop,  Lansing  Craft  Centre,  Lansing  car  assembly   main  plant,  and  Lansing  Metal  Center  between  2005  and  2006,  to  accommodate  the   revamped  production  at  the  two  new  plants  (Lansing  State  Journal  2008).     It  was  over  the  sprawling,  weedy  lot  where  these  plants  had  been  demolished,  along   Saginaw  Avenue  heading  west  from  downtown,  that  a  pale  blue  billboard  hung  while  I   conducted  this  research  in  2009  and  2010.  In  simple  block  font  it  stated,  “Foreclosure  is   hard  on  the  whole  family”  and  directed  viewers  to  the  federal  government’s  foreclosure   prevention  website  and  hotline.  Similar  signs  hung  throughout  the  city  at  major   intersections  and  encircled  it  along  the  interstate  during  my  fieldwork,  physically  marking   96   it  as  one  of  the  areas  hardest-­‐hit  by  the  national  foreclosure  crisis.  Hanging  over  the  ruins   of  two  auto  assembly  factories,  the  billboard  also  marked  the  stratigraphy  of  economic   crises  and  change  in  the  community:  the  once-­‐prosperity  of  the  auto  industry;   deindustrialization  starting  in  the  1970s  and  accelerating  through  the  shutdown  of   Oldsmobile;  the  decade-­‐long  recession;  and  then,  one  of  the  highest  foreclosure  rates  in  the   nation.  These  processes  have  chipped  away  at  the  American  dream,  understood  as  financial   stability  and  upward  mobility  and  symbolized  by  stable,  decent  work  and  homeownership.   Whereas  deindustrialization  stripped  away  the  possibility  of  a  dignified  work  life  as  it  was   understood  in  the  post-­‐war  period,  foreclosure  threatens  the  cultural  vision  of  decent   family  life  symbolized  by  homeownership.     The  modernization  of  production  in  Michigan  and,  after  the  2009  bankruptcy,   workers’  labor  under  a  two-­‐tiered  wage  system,  have  led  to  significant  manufacturing  job   losses  and  precarity  in  workers’  lives.  Then-­‐governor  Jennifer  Granholm  (2003-­‐2011)   defined  her  tenure  in  relation  to  stemming  the  loss  of  manufacturing  jobs  and  attenuating   the  recession,  including  through  a  series  of  “investment  missions”  to  Japan  to  attract   advanced  auto  manufacturing,  alternative  energy,  and  life  sciences  industries  to  the  state.   Over  the  first  decade  of  the  twenty-­‐first  century,  Michigan’s  unemployment  more  than   quintupled,  from  around  4%  to  15.3%  in  September  2009.  That  same  month,  the  Lansing-­‐ East  Lansing  area  had  an  official  unemployment  rate  of  11.0%  (Bureau  of  Labor  Statistics   2009).  This  number  probably  underestimates  actual  unemployment,  with  the  rate  of   unemployed,  underemployed,  and  discouraged  workers  at  17.5%  nationwide  and  upwards   of  20%  in  Michigan  (New  York  Times  11/8/09).  In  my  eastside  Lansing  neighborhood,  it   97   was  common  for  us  residents  to  assert  that  at  least  one-­‐quarter  of  the  adults  were   unemployed.     Losing  the  Good  Old  Days       For  housing  counselor  Juanita,  the  foreclosure  crisis  is  not  a  crisis  of  the  financial   system  but  a  continuation  of  the  crisis  in  the  productive  economy.  Even  though  she  had   been  taught  in  her  training  as  a  housing  counselor  to  prioritize  predatory  lending  as  a   leading  cause,  for  her  the  crisis  is  about,  “The  economy.  Jobs.  Mmhmm.  People  are  saying,   yeah,  I  would  have  to  admit  predatory  lending  has  a  lot  to  do  with  it,  although,  everybody   seemed  to  be  doing  just  fine  until  they  lost  their  jobs.  Well,  they  blame  it  on  predatory   lending,  but  you  know  what,  when  you  lose  your  job—you  obviously  don’t  have  the  money   like  you  used  to  have  in  order  to  afford  your  bills.  Why  do  you  think  everybody  is  walking   away?  All  of  our  jobs  have  went  down  to  China  or  wherever  else—or  they  minimized,  or   they  closed  out—and  they  don’t  have  the  money  any  more  to  keep  continuing  with  that.”   Anna:   “Yeah.  So  when  you  say  economy,  what  do  you  mean?  What’s  the  economy?”   Juanita:  “Mmm,  that  everything  just  went  bad.  You  know?  I  mean  like  everybody  is   struggling  right  now  so  much  because  they’ve  lost  their  job;  they’re  trying  to  maintain.”25   What  people  are  “trying  to  maintain”  is  the  standard  of  living  they  associate  with  the   vibrant  middle  class.  Mary’s  reflections  represent  well  the  changing  experiences  and   expectations  of  class  in  America:  “I  think  middle  class  lifestyle  is  not  what  it  used  to  be,  for   sure.”  Mary  had  grown  up  in  a  town  near  Lansing  in  the  1950s  and  1960s  and  was  still   closely  in  touch  with  her  mother,  who  was  offering  varying  levels  of  material  and  financial                                                                                                                   25  Interview,  Juanita,  October  6,  2010,  Okemos,  Michigan.   98   support  to  Mary  and  her  brother  as  each  was  facing  mortgage  trouble.  “What  did  it  used  to   be,”  I  asked  her.   Oh,  I  think  middle  class  before  I  would  think,  you  know,  you  have  a  fairly  nice   home,  you  know—like,  not  super  expensive  but  not  anything  really  horrible.   You  have  two  cars.  You  get  to  go  out  and  socialize.  You  can—I  mean,  I  don’t   know  how  to  put  it  into  words.  Because  I  know  my  parents  were  probably   what  would  be  considered  middle  class,  you  know?  We  didn’t  have  a  lot  of   extra  money,  but  we  could  take  vacations.  We  could  save  every  year  and  we   could  go  on  a  family  vacation.  For  a  while  when  we  got  older  we  went  to  Las   Vegas  every  six  months.  That  type  of  thing.  Now  I  think  middle  class  is  pretty   much  pay  check  to  pay  check—I  don’t  think  middle  class  has  a  large  amount   of  people  that  maybe  have  a  great  savings  or  a  great  retirement  plan.  I  mean,   that’s  just  kind  of  what  I’m  feeling.  I  mean,  I  have  no  retirement  plan.  I  mean  I   have  a  little  retirement  over  there,  but  it’s  not  gonna…Middle  class  I  don’t   think  is  a  great  thing  to  be  any  more.  Insurance  premiums  are  so  high.   Everything  costs  so  much  more  now;  I  just  don’t  think  that  your  normal   middle  class  people  have  a  lot  of  extra  money  to  send  kids  to  college—that   type  of  thing.26     Mary’s  discourse  reflected  two  different  ways  of  defining  middle  class.  First  was  that   middle  class  is  what  a  person  in  the  middle  of  the  income  distribution  can  afford.   Alternately,  “middle  class”  meant  a  certain  standard  of  living.  Within  the  first  definition— that  is,  what  is  available  to  someone  with  the  median  income—“middle  class”  cannot   technically  disappear  because  there  is  always  someone  in  the  middle  of  the  distribution.   This  was  what  people  mean  when  they  said  things  like,  “Middle  class  I  don’t  think  is  a  great   thing  to  be  any  more.”  There  are  still  Americans  in  the  middle  of  the  income  distribution— where  a  family  of  four  earns  $51,914  (U.S.  Census  2012).27     The  other  side  of  Mary’s  commentary,  the  one  with  more  emotional  resonance,  was   about  the  loss  of  the  specific  lifestyle  she  means  when  she  imagined  the  middle  class.  It  is                                                                                                                   26  Interview,  Mary,  August  11,  2010,  Okemos,  Michigan.   27  http://quickfacts.census.gov/qfd/states/00000.html   99   the  middle  class  of  her  parents’  generation,  of  when  Mary  grew  up  in  the  1950s  and  1960s.   This  middle  class  was  the  one  that  can  afford  vacations  twice  a  year,  go  out  and  socialize   and  own  two  cars.  Like  most  Americans,  she  has  attached  her  imaginary  of  the  American   middle  class  to  the  post-­‐World  War  II  period.  This  is  a  middle  class  that  can  disappear  and   it  is  the  disappearance  of  that  standard  of  living  that  ignites  class  anxieties  in  normal   people  and  the  political  establishment.  Of  note  is  that  Mary  identified  herself  as  a  middle   class  person  by  virtue  of  her  childhood:  she  is  permanently  anchored  to  this  class  position   so  in  her  experience,  it  is  not  that  her  own  position  is  changing  but  that  the  content  of  her   self-­‐assigned  status  is  deteriorating.  Here  I  return  to  her  claim  that  the  middle  class  now   suffers  from  insecurity  around  retirement:  “I  don’t  think  middle  class  has  a  large  amount  of   people  that  maybe  have  a  great  savings  or  a  great  retirement  plan.  I  mean,  that’s  just  kind   of  what  I’m  feeling.  I  mean,  I  have  no  retirement  plan”  (emphasis  mine).     Mary  located  herself  multiply  and  complexly  in  the  class  system.  Although  she  self-­‐ identified  as  “below  the  middle  class”  when  I  asked  her  what  class  she  belonged  to,  she   permanently  anchored  herself  with  the  middle  class  because  of  her  comfortable   upbringing.  This  points  to  the  temporal  dimensions  of  living  class  and  what  period  of  life   “counts.”  For  someone  who  grows  up  middle  or  upper-­‐middle  class  and  then  has  a  decline   in  her  standard  of  living,  like  Mary,  formative  years  may  be  what  one  is  “really”  made  of.   For  others,  especially  successful  climbers,  it  is  one’s  later  status,  the  final  achievement  of   some  variant  of  middle  classness  that  counts.  Economists  who  study  poverty,  wealth,  and   income  spend  considerable  intellectual  energy  thinking  about  the  temporal  flow  of  wealth   throughout  the  lifetime.  In  a  “normalized”  life  of  a  middle  class  person  (or  an  aspirant),  it  is   common  for  people  to  experience  a  decrease  in  earnings  and  standard  of  living  in  the  early   100   adult  years,  during  postsecondary  education  or  in  the  early  working  years.  The  assumption   is  that  upon  leaving  one’s  relatively  more  stable  and  wealthier  parental  household,  there  is   a  period  of  struggle  to  “establish  yourself.”  In  the  middle  classes,  this  “establishment”  is   usually  financed  by  large  debts  for  education,  a  mortgage,  perhaps  a  car  and  other  durable   consumer  goods.       These  former  markers  of  upward  mobility—postsecondary  education  and   homeownership—account  for  most  household  debt  in  America  and  have  therefore  become   major  liabilities  instead  of  sources  of  security.  According  to  Warren  and  Thorne’s  (2012)   analysis  of  bankruptcy  filers’  debts  and  personal  characteristics,  the  signature  experience   of  middle-­‐income  Americans  is  now  precarity.  When  they  are  surveyed  about  their   aspirations,  Americans  vastly  prefer,  at  a  rate  of  almost  7  to  1,  the  promise  of  stability  over   the  promise  of  wealth  (Pew  Charitable  Trusts  2011).  I  have  not  found  long-­‐term  data  on   Americans’  preference  for  stability  versus  wealth,  but  I  suggest  that  the  vast  preference  for   stability  is  an  artifact  of  nostalgia,  grasping  for  the  always-­‐impossible  past  as  a  comfort  in  a   time  of  crisis.  Nostalgia  is  a  longing  for  that  which  never  really  existed  (Stewart  1984).  As   we  narrate  the  nostalgic  past,  we  bury  it  at  the  same  time,  making  it  seem  at  once  more   authentic,  more  present,  and  more  irretrievable  (Dudley  1994;  Stewart  1984;  Ivy  1995).  I   further  suggest  that  this  nostalgia  is  kindred  to  what  Lendol  Calder  (1999)  calls,  in  his   cultural  history  of  the  American  dream,  the  myth  of  “lost  economic  virtue.”  Lost  economic   virtue  is  the  sense  that  in  the  past,  Americans  used  to  be  thrifty,  not  pay  with  credit,  nor   accumulate  debt.  This  mode  of  historical  representation,  serves  as  a  mode  of  critiquing   both  consumerism  and  individual  waste.  Calder  cites  popular  literature  including  Mark   Twain  as  sources  of  this  myth  of  lost  economic  virtue.  For  Twain,  the  age  of  lost  virtue  it   101   was  the  antebellum  period  when  thrift  ruled;  later,  people  saw  Twain's  age—that  he   criticized  as  an  age  of  "charging  it"—as  the  time  of  thrift.  Then  it  was  the  Depression.  Yet,   writing  on  the  eve  of  the  Depression,  the  Lynds’  (1929)  wrote  in  their  community  study  of   Middletown  that  in  1890  “[p]eople  dreaded  ‘being  in  debt,’  but…  [t]oday  Middletown  lives   by  a  credit  economy  that  is  available  in  some  form  to  nearly  every  family  in  the   community”  (46).  Whereas  Calder’s  myth  of  lost  economic  virtue  is  about  individual   economic  moralities,  the  mythic  losses  under  consideration  here  are  about  mourning   vanished  institutions  and  economic  arrangements.   I  analyzed  61  discussions  of  history  and  the  economy,  from  interviews  with  17   homeowners  and  15  housing  professionals’  transcripts,  from  earliest  historical  mention   through  projections  into  future  recovery  from  this  crisis,  as  seen  in  figure  1  below.  At  a   gross  level,  one  can  see  that  people’s  discourses  were  focused  on  present  problems,  but   were  nearly  equally  focused  on  the  problems  of  deindustrialization  and  of  future  recovery.   Their  consciousness  was  suspended  evenly  between  the  shaky  past  and  an  uncertain   future.  In  general,  people  anchored  their  analysis  to  other  historical  moments  of  decline,   most  often  the  contraction  of  the  auto  industry  in  the  late  1970s  and  1980s.  About  half  the   historical  quotes  were  about  Michigan’s  history  and  economy  while  the  other  half  were   about  national  history.  Few  quotes  either  explicitly  linked  state  and  nation  or  reference   global  decline  (3  and  4,  respectively).  But,  because  people  were  so  equally  concerned  about   local/state  and  national  decline,  I  argue  that  these  reflections  as  a  whole  reinforce  the   theme  of  citizenship  in  decline.       102   Figure 1. Historical Reflections (speech incidents) 16   14   12   10   8   6   4   2   0   Great Since 1950s Since 1970s Since 1990s 2005-2010 Depression Homeowners Future Housing Professionals Note: One discussion about the Industrial Revolution has been omitted.   Homeowners  and  housing  professionals  I  interviewed  were  unanimous  in  locating   the  good  times  from  after  World  War  II  until  the  early  1970s.  Those  who  were  children  in   the  mid-­‐century  claimed  that  what  their  fathers  made  as  factory  workers  “would  have  been   considered  middle  class.”28  A  housing  program  director  I  saw  frequently  during  my   research,  Cindy,  grew  up  in  Lansing  recalled  how  GM  used  to  recruit  workers  in  her  high   school  cafeteria.  She  herself  went  to  work  at  GM  as  a  hiring  secretary:  “We  used  to  work  13   hour  days,  six  days  a  week  just  to  process  new  hires.  There’d  be  200  people  a  day  lined  up                                                                                                                   28  Interview,  Perry,  September  14,  2010,  Lansing,  Michigan.   103   around  the  building  and  the  line  manager  would  be  asking  ‘what’s  the  hold  up?’”29  Evelyn,   a  homeowner  in  her  70s  that  I  met  at  a  counseling  agency,  emphasized  the  terms  of  the   welfare  capitalist  compact  giving  workers  plentiful  wages  to  get  “everything  we  wanted”   throughout  most  of  the  twentieth  century:     My  dad  worked  at  GM;  my  husband  worked  at  Ford.  Ford  was  good  to  us.  We   had  a  good  life.  Those  kinds  of  good  times  are  not  going  to  come  back.  Even   those  who  kept  their  job—things’ll  never  be  the  same  as  back  when  we  were   raising  our  kids.  I’ve  had  a  lot  of  good  years...I  think  we  had  the  American   dream  when  I  was  married:  we  had  everything  we  wanted.  He  worked,  I   worked,  we  sent  our  son  to  college.  From  the  time  I  married,  times  were   good.30       Yet,  Evelyn’s  nostalgia  for  the  mid-­‐century  middle  class  also  indexed  a  critique  about  the   decline  of  America,  especially  related  to  domestic  manufacturing.  She  has  accepted  the   commonsense,  now  a  generation  old,  that  “things’ll  never  be  the  same”  for  Michigan   workers.  Her  nostalgia  for  the  period  is  confounded  by  her  nostalgia  for  marriage  and  angst   over  its  dissolution  when  she  was  50  years  old.       The  particular  historical  junction  in  which  Evelyn,  among  others  in  this  project,  grew   up,  was  the  Fordist  compact  between  capital  and  labor  that  came  to  symbolize  welfare   capitalism  in  its  fullest  expression  from  1945-­‐1973.  It  was  based  on  redistribution  of   wealth  enabled  by  ever-­‐increasing  growth.  It  was  the  serving  up  of  an  economic  “pie  sweet   and  big  enough  to  pass  around  in  generous  portions”  (Dudley  1994:xviii).  The  institutional   structures,  such  as  the  Wagner  Act  legalizing  labor  unions,  the  “family  wage,”  and   Keynesian  policies  of  business  cycle  regulation,  minimum  wages,  and  unemployment   insurance  for  wealth  redistribution  did  not  fully  manifest  until  after  World  War  II  because                                                                                                                   29  Fieldnotes,  February  26,  2010.   30  Interview,  Evelyn,  August  24,  2010,  Howell,  Michigan  (via  telephone).   104   of  a  wartime  wage  freeze  and  no-­‐strike  commitment  by  unions  (Harvey  1989;  Nash  1989;   Fine  2004).  It  was  the  era  when  white  women,  like  Evelyn,  were  able  to  live  as  housewives,   enacting  the  kind  of  morally  appropriate  dependence  discussed  by  Fraser  and  Gordon   (cited  in  Dean  2010;  Nash  1989;  also  see  Coontz  1992  for  a  critique).     Nationally,  the  postwar  economic  boom,  mortgage  financing  programs,  and   suburbanization  of  the  1950s  blurred  class  lines  but  strengthened  racial  lines  (May  2008;   also  see  Sugrue  1996);  in  fact,  until  the  1950s,  white  and  black  American  families  were   more  similar  than  they  were  different  (Coontz  1992).  Saundra  and  Gwen,  both  African   American  women  who  grew  up  in  Detroit  in  the  1950s  and  1960s,  recalled  their  childhood   neighborhoods  as  the  pinnacle  of  wholesomeness  and  possibility.  Saundra  recalled  with   affection  growing  up  surrounded  by  an  extended  network  of  family  members  on  a  block   with  dozens  of  children.  “And  it  was  a  real  community.  Everybody  knew  everybody  for   miles  around..”  Saundra  is  a  playwright  and  activist,  and  she  loves  performing  storytelling.   The  vegetable  man  and  the  ice  man  used  to  ride  through  the  neighborhood  with  their   horse-­‐drawn  carts.  She  and  her  mother  would  ride  the  trolley  into  downtown.  She  was  the   last  generation  to  experience  those  trappings  of  the  old  days  and  the     [T]otally  self-­‐contained  community  at  that  time.  It  was  segregated,  but  we   had  white  business  people,  but  we  had  a  lot  of  black  business  people  too,  and   the  black  business  people  outnumbered  the  white  business  people,  okay?   Well,  at  a  certain  point  it  was  a  turning  over,  because  I  would  say  probably   the  50s  to  like  63  or  so,  it  was  mostly  white,  then  after  63  when  people   started—because  they  were  working  in  the  factories  and  making  more   money,  white  people  started  moving  out  and  black  people  filled  in  those   spots  where  the  white  people  moved  out  at  and  in  the  business.31                                                                                                                     31  Interview,  Saundra,  October  20,  2010,  Detroit,  Michigan.     105   For  her,  decline  was  not  related  to  the  auto  industry  but  to  the  arrival  of  the  drug  trade  in   1964  or  1965—though,  of  course,  the  arrival  of  the  drug  trade  is  not  unrelated  to  the   decline  of  manufacturing  employment.  Further,  the  riots  of  1967  exacerbated  the  rate  of   white  flight  to  the  suburbs,  leaving  more  vacant  properties  that  were  vulnerable  to   takeover  from  drug  dealers.  “In  those  14  houses  that  we  had  on  our  block,  out  of  the  14,  7   of  them  I  would  say  by  1970  were  dope  houses.”  This  is  the  period  when  Gwen  decided  not   to  raise  her  sons  in  Detroit  but  to  migrate  to  Lansing.   While  Saundra’s  and  other  primarily  black  neighborhoods  in  Detroit  were   decimated  starting  in  the  1960s,  white  suburban  families  diverged  from  other  American   families  through  the  lifestyle  of  “democratic  abundance”  (May  2008)  they  were  able  to   enact  in  the  suburbs  when  “the  middle-­‐classing  of  (white)  America”  became  a  shared   “national  project,”  “creating  a  world  of  consumers  with  the  means  and  the  desire  to  buy   goods,  staving  off  the  class  consciousness  and  incipient  class  warfare  that  had  been  taking   shape  during  the  Depression  years  of  the  1930s  and  elevating  the  working  classes  to  at   least  a  certain  level  of  culture  and  further  aspirations”  (Ortner  2003:28).  Even  though   Michiganders  recall  the  glory  of  the  1940s,  50s,  and  60s,  many  workers  at  the  time   continued  to  augment  their  factory  earnings  with  farm  labor.  These  activities  were  not  only   about  maintaining  an  identity  connected  to  the  land  but  out  of  simple  economic  necessity   (Fine  2004).  In  the  1950s,  more  auto  plants  began  leaving  the  unionized  Midwest  in  search   of  cheaper  labor  in  the  South,  presaging  globalization’s  evacuation  of  auto  jobs  from  the   state  in  the  1980s,  1990s,  and  2000s  (cf.  Adler  2001).       106   Downward  Mobility     American  cultural  ideology  has  always  been  and  remains  one  premised  on  the  myth   of  class  mobility,  the  crux  of  the  American  dream  (see  Spindler  and  Spindler  1983;  Gillin   1955;  Cullen  2003)  that  “there  must  be  equality  of  opportunity  for  all  and  a  chance  for   everyone  to  have  his  turn  at  bat”  (Warner  1962:129).  In  large  measure,  upward  mobility  is   the  American  discourse  on  class—it  is  a  “folk  gospel”  (Chinoy  1992).  Historically,  class-­‐ based  moralism  has  been  rooted  in  secular  derivations  of  the  Protestant  Ethic  valuing  hard   work  of  value  to  the  community,  for  which  one  deserves  to  accumulate  wealth.  With  a  few   historical  exceptions—the  Gilded  Age,  and  Gordon  Gecko-­‐esque  neoliberalism—general   sensibilities  tamped  down  extravagance  that  violated  people’s  perception  of  living  in  a   country  founded  on  equality;  then,  it  is  hubris  (du  Bois  1955;  also  see  Jacobs  and  Newman   2008).  Such  cultural  moderating  forces,  based  on  a  discourse  of  meritocracy,  have  been  the   American  compromise  between  citizenship  and  capitalism.     T.  H.  Marshall  (1950),  who  wrote  the  seminal  text  on  citizenship  studies,   understands  citizenship  to  be  at  odds  with  capitalism  because  capitalism  is  a  class  system:   whereas  citizenship  is  about  equality,  capitalism  is  a  system  of  inequality.  He  concludes   that  these  "apparent  inconsistencies  are  in  fact  a  source  of  stability,  achieved  through  a   compromise  which  is  not  dictated  by  logic"  (84).  I  disagree  with  Marshall  that  the   compromises  between  citizenship  and  class  are  not  dictated  by  logic;  instead,  class   inequality  is  inherent  in  and  consistent  with  American  ideology  of  citizenship.     Meritocracy  is  a  discourse  of  individualism:  since  one’s  efforts  lead  to  just  rewards,   one’s  failures  are  individual  (McNamee  and  Miller  2004).  The  American  dream  therefore   confers  what  Marshall  (1950)  calls  “equality  of  status”  but  not  “equality  of  income.”  The   107   capitalist  citizenship  embodied  in  the  American  dream  is  a  delicate  balance  because   whereas  citizenship  creates  equality,  capitalism  fosters  class  divisions.     Being  “middle  class,”  then,  is  a  claim  to  the  true  and  fullest  experience  of  citizenship,   what  Morgen  (2010)  call  “un-­‐prefixed”  Americanism.  It  is  a  citizenship  hinged  on   historically  contingent  mixes  of  consumption  and  morality.  "[T]he  'middle  class'  is  the  most   inclusive  social  category;  indeed,  it  is  almost  a  national  category.  In  many  usages  it  means   simply  all  those  Americans  who  have  signed  up  for  the  American  dream,  who  believe  in  a   kind  of  decent  life  of  work  and  family,  in  the  worth  of  the  'individual'  and  the  importance  of   'freedom,'  and  who  strive  for  a  moderate  amount  of  material  success"  (Ortner  2006:71).   Far  from  solely  an  economic  category,  class  is  a  suite  of  moral,  social,  and  affective   practices:  education,  values,  family  composition,  occupation,  and  social  boundaries.   Because  of  nearly-­‐innumerable  permutations  among  the  variables,  the  American  middle   class  “is  everybody  except  the  very  rich  and  the  very  poor”  (Ortner  2006:71),  largely   through  staking  claims  to  middle  class  values—education,  family  sacralization  of  the   domestic  sphere,  independence  from  the  state,  and  valuing  privacy  and  propriety.     Because  of  middle  class  ubiquity,  Sherry  Ortner  argues  that  the  “plain  middle  class,”   is  “slippery”  because  “there  is  almost  no  ‘there’  there;  to  be  plain  middle  class  is  almost   always  to  be  ‘really’  something  else,  or  on  the  way  to  somewhere  else  (Ortner  1998:8).  The   seismic  shift  noted  with  alarm  by  distressed  homeowners,  pundits,  and  politicians  (to   name  just  a  few)  is  that  increasingly  more  Americans  are  on  their  way  down.  Although  the   Pew  survey  (Morin  and  Motel  2012)  found  nearly  half  of  Americans  claiming  the  plain   middle  class  category,  one-­‐quarter  claiming  lower-­‐middle  class,  and  15  percent  self-­‐ locating  in  the  upper-­‐middle  class.  That  Pew  survey  found  the  highest  number  of  people   108   self-­‐reporting  belonging  in  the  lower  and  lower-­‐middle  socioeconomic  classes.  Ortner   (1998)  has  argued  that  Americans  “in  general…do  not  like  to  subdivide  the  middle-­‐class   category”  (1998:8)  except  to  use  “lower-­‐middle  class”  to  cover  their  objective  belonging  in   the  working  or  lower  class.  My  read  of  such  usages  is  that  it  is  not  so  much  about  covering   one’s  objective  status  but,  rather,  to  make  a  claim  on  citizenship  and  respectability.  The   Great  Recession  is  undermining  the  lived  experience  of  citizenship  by  radically  upsetting   the  postwar  consensus  about  upward  mobility,  meritocracy,  and  decent  family  life.  To  say   this  is  not  to  ignore  the  ways  that  deindustrialization  has  significantly  exacerbated   instability,  poverty,  and  “honest  work”  in  areas  like  Michigan.  Rather,  in  the  rest  of  this   chapter,  I  will  argue  that  downward  mobility  in  the  Great  Recession  is  experienced  as  the   culmination  of  a  period  of  epochal  historic  shift  that  began  with  deindustrialization.     When  facing  foreclosure,  most  homeowners  emphasized  their  fall  from  the  middle   class  to  poverty  or  an  in-­‐between  status  like  “middle  working  poor.”  Gwen,  an  African   American  social  worker  in  her  60s,  offered  me  a  nuanced  landscape  of  middle  class   possibilities  over  coffee  one  day:     Working  middle  class  to  me  is  people  that  are  able  to  have  the  things  that  they   need,  but  also  able  to  have  a  few  things  that  they  enjoy,  both  physically,   emotionally,  and  time  wise.  Means  that  you  don’t  have  to  work  and  live  pay   check  to  pay  check  if  you  don’t  have  to.  You  do  it  because  you  have  gone  a   little  bit  above  what  you  need  to  go,  if  you  were  to  live…without  being   paycheck  to  paycheck,  you  would  be,  okay,  I’m  going  home,  I’m  going  to   work,  I  get  my  gas  and  get  my  food.  But  because  you  live  a  little  bit  beyond   that,  you’re  always  waiting  for  the  next  paycheck.  That’s  the  working  middle   class.  Just  the  middle  class  people,  they  don’t  really  worry  about  too  many   things.  They  know  that  they  have,  and  they  have  a  bank  account.  They  have  a   back  up  plan,  some  kind  of  something  that’s  gonna  help  them  survive  if   something  was  to  cave  in  on  them  for  maybe  a  couple  of  months  or   something  like  that.32                                                                                                                       32  Interview,  Gwen,  August  26,  2010,  Lansing,  Michigan.   109     Gwen  devoted  most  of  her  explanation  of  class  experience  to  the  working  middle  class,  the   place  she  located  herself.  Gwen  was  working  part  time  though  she  wished  it  were  full-­‐time,   which  was  the  primary  reason  she  had  gotten  behind  on  her  mortgage.  At  60,  her  four  sons   were  grown  and  out  of  the  house—three  were  working  and  one  was  in  graduate  school.   She  spent  most  of  her  free  time  and  resources  helping  out  her  elderly  parents  who  lived   outside  the  city.  She  considered  herself  to  be  “middle  working  class,  but  according  to  my   children  I’m  in  the  working  poor  class.”  These  divergent  ideas  come  not  from  a  schism   between  her  and  her  children,  but  rather  because  she  raised  them  to  aspire  to  a  better  life.     Gwen’s  description  of  working  middle  class  points  to  the  sacrifice  and  hawkish   managerialism  required  to  survive:  in  order  to  avoid  living  paycheck  to  paycheck,  a   working  middle  class  person  must  limit  herself  to  “my  gas…and  my  food.”  It  is  an   economically  bare  existence,  one  mirrored  in  the  budget  counseling  offered  at  housing   counseling  agencies.  Those  budgeting  sessions  hinge  of  producing  a  “crisis  budget”  that   eliminates  as  much  spending  as  possible—most  often  reducing  grocery  spending   (supplanted  with  food  stamps,  if  possible),  canceling  cable,  lawn  service,  and  perhaps   letting  other  bills  slide  for  the  time  being.     The  “just  middle  class,”  in  contrast,  is  financially  secure  in  a  way  that  seems  nearly   unfathomable:  they  don’t  worry  about  too  many  things.  More  than  any  other  feature,   distressed  homeowners  longed  for  the  middle  class  luxury  of  being  able  to  afford  to  go  out   to  eat  once  in  awhile.  The  lack  of  worry,  the  physical  and  psychic  ease  of  middle  classness  is   at  least  as  much  a  defining  feature  as  one’s  income.     Gwen’s  analysis  of  betterment  also  hinged  on  her  analysis  of  racialized  class   experience.     110   There’s  three  different  characteristics  of  the  average  American  person.  You   have  the  minority  average  American  person.  And  you  have  the  Anglo-­ American.  Then  you  have  the  average  person  that  is  just  barely,  that’s  the   working  class  poor  class.  And  the  reason  I  say  it’s  three  different,  because  we   all  are  at  different  economical  levels  that  makes  us  all  average  within  that   level.  That’s  the  way  I  look  at  it.33       Gwen  seemed  to  paraphrase  Ortner’s  conclusion  that  “there  is  no  class  in  America  that  is   not  always  already  racialized  and  ethnicized,  or  to  turn  the  point  around,  racial  and  ethnic   categories  are  always  already  class  categories”  (Ortner  1998:8).  The  mother  of  four  boys,   Gwen  was  painfully  aware  of  the  thwarted  ambitions,  discrimination,  and  danger  her  sons   faced  as  young  African  American  men,  especially  if  she  raised  them  as  a  single  mother  in   her  hometown  of  Detroit.  “Raising  four  sons,  to  me,  it  would  not  have  been  a  good  place  to   raise  them  in  Detroit.  I  mean  four,  black,  young  men  –  that  just  did  not  seem  like  a  good   sale…since  they  didn’t  have  a  male  image,  a  male  support,  at  that  point  that  would  be  down   in  Detroit,  I  didn’t  think  that  was  a  good  place  to  raise  young  men.”34     Instead,  Gwen  moved  to  Lansing  after  separating  from  her  husband  in  order  to  live   near  her  parents  who  had  bought  a  large  piece  of  property  in  a  nearby  rural  area  after  the   Detroit  riots.  When  her  husband  came  back  from  a  deployment  overseas,  “I  had  gotten  a   townhouse  here.  And  we  lived  in  a  two-­‐bedroom  townhouse  for  a  period  of  time  until  we   divorced.  And  once  we  divorced,  I  didn’t  wanna  live  in  that  townhouse  any  more.  And  I   pretty  much  gave  myself  five  years  to  find  a  house  and  get  in  it.  I  had  the  house  and  had                                                                                                                   33  Gwen  went  on  to  expound  on  the  cultural  capital  of  minority,  Anglo,  and  working  class   poor  classes,  echoing  the  folk  adaptation  of  the  culture  of  poverty  thesis  that  emphasizes   the  deficient  cultural  capital  and  internal  motivations  of  the  poor.   34  In  his  ethnography  of  street  drug  dealing  in  Detroit,  Luke  Bergmann  (2008)  provides  an   excellent  history  of  economic  hardship  and  the  exclusion  of  black  Detroiters  from  public   space  and  enterprises,  especially  after  the  1967  riots,  the  time  Gwen’s  sons  came  of  age  in   Lansing.   111   gotten  in  it  within  two.  So  that  was  the  house  that  I  wanted.  ‘Cause  I  wanted  my  sons  to   have  some  respect  for  something.  I  wanted  them  to  know  what  it  meant  to  have  some   property—what  it  meant  to  have  some  kind  of  pride  about  what  you  had.”     The  house  was  modest  and  needed  constant  repairs,  which  Gwen  paid  for  by   refinancing  the  house  and  cashing  in  the  equity.  Eventually,  after  her  youngest  son   graduated  from  high  school,  Gwen  was  living  in  an  apartment  while  renovating  the  house.   She  had  refinanced  the  house  numerous  times,  increasing  the  balance  of  the  mortgage  and   drawing  out  all  the  equity  out  of  the  house.  Eventually  the  terms  of  the  refinanced   mortgage  were  so  bad  that  an  attorney  told  Gwen,  “my  grandchildren’s  grandchildren’s   grandchildren  would  never  be  able  to  pay  for  this  house.”  She  had  been  victim  to  predatory   refinancing  schemes  of  a  type  that  devastated  African  American  communities  in  the  1990s   (Immergluck  2009).     On  the  advice  of  the  attorney,  Gwen  gave  up  the  boys’  childhood  home  as  part  of  a   bankruptcy  filing.35  Like  most  parents  who  buy  their  houses,  Gwen  did  so  thinking   primarily  to  provide  stability  and  a  positive  role  model  for  her  children  (Culhane   2012:124-­‐25).  Because  she  was  able  to  hang  onto  that  house  until  the  youngest  graduated   high  school,  she  thinks,  “the  house  served  its  purpose.  The  kids  had  a  place  to  grow  up  in.   They  had  one  place  to  grow  up  in.  They  knew  that  this  was  a  stable  environment.  They                                                                                                                   35  Even  though  the  refinancing  scam  for  Gwen  “hurt  me  to  my  heart,”  she  was  not   dissuaded  from  buying  another  house.  It  was  this  second  house  that  she  was  in  danger  of   losing  because  of  her  precarious  work  situation  in  2010.     112   knew  that  this  was  their  place.  So  from  that  perspective  I  look  at  it  that  it  was  good  for   them.”36       Owning  a  house  for  Gwen  was  not  only  about  family  virtue  and  pride,  but  also  useful   as  “something  that  you  can  take  your  taxes  off,”  by  which  she  meant  claiming  the  mortgage   interest  tax  deduction.  Then,  Gwen  echoed  housing  industry  commonsense  that   homeownership  is  a  wealth-­‐building  tool  for,  by  continuing  to  appreciate  in  value  while  the   owner  pays  down  the  debt,  the  house  is  an  enforced  savings  mechanism.  The  success  of  the   house-­‐as-­‐asset  model  depends  on  what  Bill  Maurer  (2006),  in  his  history  of  the  mortgage,   finds  is  a  historically  recent  shift  in  understanding  of  mortgages  and  debt—where  debt  that   has  been  reduced,  but  not  paid  off,  actually  creating  more  access  to  capital.  Paying  off  a   mortgage  “kills”  the  debt  and  the  contract,  distancing  homeowners  from  institutions  that   would  lend  them  more  money  and  the  ready  cash  they  would  have  available  as  home   equity.  It  is  a  conflation  of  the  house’s  use  value  (as  a  residence,  a  stable  environment  to   raise  children)  with  its  exchange  value  (as  a  wealth-­‐building  strategy)  (Saegert,  Fields,  and   Libman  2009).  But  as  the  predatory  refinancing  schemes  and  present  foreclosure  crisis   make  painfully  clear,  the  asset-­‐building  claim  hinges  on  very  specific  real  estate  conditions:   fundamentally,  that  prices  must  always  be  rising,  but  also  that  borrowers  must  not  cash  in   on  this  unqualified  promise  too  often.       As  many  observers  have  noted,  the  foreclosure  crisis  is  a  “painful  inversion”   (Saegert,  Fields  and  Libman  2009)  of  the  promises  of  homeownership  as  a  source  of   stability  and  wealth  building.  Instead  of  increasing  subjective  and  financial  wellbeing,  a   mortgaged  house  is  increasingly  a  source  of  stress,  uncertainty,  financial  liability,  and                                                                                                                   36  Interview,  Gwen,  August  26,  2010,  Lansing,  Michigan.   113   downward  mobility  (Ross  2009;  Culhane  2012;  Warren  and  Thorne  2012).  Almost  none  of   the  twenty-­‐four  households  I  interviewed  self-­‐identified  as  unmarkedly  middle  class,  and   the  few  who  claimed  to  be  plain  middle  class  did  so  in  complicated  ways.  One  woman,  a   divorcee  in  her  60s,  came  close  to  locating  herself  in  the  middle  class,  noting  that  before   her  divorce,  she  was  upper-­‐middle  class  but  that  now  she  didn’t  “particularly  have  the   means  for  that.”  Everyone  emphasized  their  downward  mobility  and  framed  their   experience  as  contradicting  or  challenging  the  myth  of  the  middle  class.  In  general,   homeowners  said  things  like,  “we  were  middle  class…[but]  we’re  poverty  now.”37  Or   another  woman  said,  “I  would  say  middle  [class];  we  were  working  our  way  [up].”  Her   husband  interrupted:  “Now  we’re  indigent.”38  Although  there  is  ample  evidence  that   middle  class  Americans—defined  by  their  location  in  the  income  distribution—are   financially  vulnerable,  Americans’  folk  belief  strongly  persists  in  defining  middle  class  as  de   facto  financially  stable.  Financial  distress—unemployment,  foreclosure,  draining  one’s   savings—confirms  the  impossibility  of  one’s  claim  to  the  middle  class.     Homeowners’  complex  self-­‐locations,  such  as  middle  working  class,  allowed  people   to  maintain  a  stake  in  the  middle  class  as  both  a  source  of  identity  and  to  critique  the   current  political  economy.  The  United  States  has  staked  its  mythic  identity,  its   exceptionalism,  its  greatness,  on  the  existence  of  a  broad  middle  class.  Historically,  the   American  dream  has  enshrined  the  belief  that  individuals  rise  and  fall  on  their  own   strengths  and  weaknesses,  so  that  individuals  receive  all  the  credit  and  blame,  respectively,   for  their  upward  and  downward  mobility.  As  Ely  Chinoy  described  the  blocked  aspirations                                                                                                                   37  Interview,  Nicole  and  John,  September  20,  2010,  Howell,  Michigan.   38  Interview,  Maria  and  Timm,  September  22,  2010,  Fenton,  Michigan.   114   of  early  twentieth  Lansing  workers,  "The  social  order  is  thus  protected...only  at  the   psychological  expense  of  those  who  failed"  (1992:130).  As  downwardly  mobile   homeowners  in  the  present  crisis  placed  themselves  in  poverty  or  a  conflicted  status  like   “middle  working  poor,”  they  sometimes  absorbed  blame  for  their  situation,  as  the   American  dream  ideology  would  predict.  In  other  ways,  homeowners  rejected  its   individualizing  blame,  instead  indicting  corrupt  banks,  an  ineffectual  state,  and  a  nation  in   decline.  I  will  return  to  discuss  these  epochal  shifts;  first,  I  examine  in  more  detail  the   experiential  side  of  downward  mobility.       “I  went  shopping”   People  I  interviewed  experienced  the  stings  of  class  in  America,  sometimes  for  the   first  time,  after  losing  a  middle-­‐class  wage  or  salary,  or  other  times  sliding  back  into  the   kinds  of  struggles  they  experienced  as  children.  A  change  in  class  position  is  not  nearly  so   simple  as  merely  having  a  lower  income.  Class  is  intimately  bound  up  with  notions  of  self-­‐ respect,  propriety,  and  a  set  of  tastes  (e.g.,  Bourdieu  1984).  The  homeowners  who  were   experiencing  significant  downward  mobility  also  had  to  learn  how  to  worry  about  money   in  a  different  way.  Their  financial  anxieties  showed  up  in  new  physical  and  mental   sensations  that  remade  the  way  they  inhabited  the  world  and  their  bodies.  Perry  lost  his   house  to  foreclosure  in  2004,  before  the  national  foreclosure  crisis  hit  and  before  there   were  mortgage  relief  programs  available.  He  began  to  have  financial  difficulties  when  he   was  laid  off  from  a  job  he  had  held  for  fifteen  years.     Um…yeah,  I  mean  for  the  longest  time  money  issues  would  sort  of  give  me   this  empty  feeling  in  the  pit  of  my  stomach  or  like  a  twisted  feeling  in  the  pit   of  my  stomach…  After  I  got  to  a  point  where  I  was,  I  guess,  sufficiently  poor   enough  for  sufficiently  long  enough  (laughing),  it  was  like  I  kind  of  came  to   115   accept  that,  and  you  know,  it  doesn’t  create  as  much  anxiety.  I  mean,   certainly  not  the  extent  it  used  to  as  I  was  fighting  to,  you  know,  pay  my  bills   and  all  of  that.  So  I  mean,  I  probably  should  be  more  afraid  of  not  having  any   money.  Right  at  the  moment  I’ve  gotta  sort  of  scramble  to  get  caught  up  on   my  rent.  But  it’s  not  making  me  crazy.  I’m  not  anxious  about  it,  ya  know?  And   I’m  not  exactly  sure  I  could  tell  you  why.  I’d  rather  not  be  out  on  the  street,   but  you  know,  I  don’t  worry  about  it  too  much.39     Entering  a  new  class  requires  making  a  new  habitus  (Bourdieu  1977),  a  new  set  of  physical   and  emotional  states  that  become  naturalized.  Perry  was  still  able  to  recall  the  learning   process  but  had  been  “sufficiently  poor  enough  for  sufficiently  long  enough”  that  he  did  not   feel  the  same  pains  as  he  did  when  he  first  became  more  economically  insecure.  In  spite  of   his  stated  acceptance  of  the  situation,  there  is  ample  evidence  that  people  with  lower   socioeconomic  status  experience  more  stress,  more  illness,  and  lower  resilience  to  illnesses   than  those  of  more  means.  This  is  not  to  say  that  I  doubt  Perry’s  account  that  he  no  longer   feels  stressed  by  money;  in  fact,  he  was  one  of  the  first  people  to  tell  me  that  his  foreclosure   sparked  a  positive  mental  awakening  and  self-­‐acceptance.  But  there  may  be  long-­‐term   costs  that  accrue  to  individuals’  health  because  of  their  economic  strain.  Because  of  the   relative  fixity  of  our  class  positions,  in  spite  of  the  national  narrative  of  mobility,  people   from  one  class  background  often  do  not  and  cannot  imagine  the  feeling  (quite  literally,  the   way  it  physically  feels)  of  inhabiting  a  different  status.  The  chance  to  vicariously  inhabit  the   stress  of  a  lower  economic  position  may  be  one  of  many  reasons  Barbara  Ehrenreich’s   (2001)  Nickel  and  Dimed  remains  such  a  popular  treatise  on  the  lives  of  the  working  poor.     Nicole  and  John  discussed  the  shame  of  going  from  being  in  a  family  that  was  always   helping  others  in  need,  to  using  food  banks,  charity  closets,  and  state-­‐sponsored  health  care   for  her  children.                                                                                                                   39  Interview,  Perry,  September  14,  2010,  Lansing,  Michigan.   116   Anna:  At  that  point,  when  you  John  had  a  job  and  you  were  working  your  two   part-­‐time  jobs,  what  class  did  you  feel  like  you  belonged  to?     Nicole:  We  were  middle  class.       John:  I  would  consider  it  middle  class.       Anna:  Is  that  the  case  now?  Do  you  feel  middle  class?     John:  Oh,  heck  no!     Nicole:  No  way.     John:  We're  poverty  now.     Nicole:  Probably.  My  kids  both  now  qualify  for  the  state,  um,  insurance,     John:  Free  lunches.     Nicole:  Free  lunches.  You  know.     John:  When  we  go  shopping  it's  at  the  Salvation  Army.     Nicole:  Sometimes.     John:  We  have  to  go  to  food  banks  to  get  food.  It's  tough.     Anna:  What  is  that  like  for  you  guys?     Nicole:  It's  very  humbling.  It's  very  hard.       John:  I  say  we  went  from  helpin'  people  to  needin’  help.     Nicole:  And  something  like  when  you  go  to  the  food  bank,  and  you  sit  there   and  you're  like,  [gesture]  I  shouldn't  be  here.  But  it's  help  and  it  helps,  you   know.  So...  You  know,  we'll  come  home  if  my  son  has  a  friend  over.  'Oh,  yeah,   I  went  shopping.'  You  know,  I  don't  want  their  friends  to  know  that  no,  I  just   went  to  the  food  bank  to  pick  up  food.40     There  is  a  sort  of  un-­‐othering  that  goes  on  in  these  reckonings,  especially  for  John,  who   continued  to  interject  into  Nicole’s  speech  to  offer  examples  of  their  use  of  assistance                                                                                                                   40  Interview,  Nicole  and  John,  September  20,  2010,  Howell,  Michigan.   117   programs.  Both  John  and  Nicole,  but  especially  John,  experienced  “hard  times  growing  up  in   the  70s  and  80s”  during  early  auto  industry  crises.  It  is  perhaps  not  only  gender   socialization  but  his  childhood  experience  that  gave  him  more  comfort  discussing  their   financial  struggles.  When  John  noted  that  they  have  gone  “from  helping  people  to  needin’   help,”  he  linguistically  placed  himself  as  a  member  of  a  new  group—as  citizens  subject  to   state  and  community  largesse.  Fields,  Libman,  and  Saegert  (2010)  found  that  many  of  their   88  focus  group  participants,  too,  had  gone  from  helping  others  in  their  families  and  social   networks  to  asking  them  for  loans  to  catch  up  on  the  mortgages.  For  them,  many  of  them   first-­‐generation  homeowners,  “borrowing  money  was  an  admission  that  the  social  status   achieved  through  homeownership  was  tenuous.  Loans  from  family  members  thus  conflict   with  the  identity  of  proud  owner"  (Fields,  Libman,  and  Saegert  2010:  662).   Nicole,  for  her  part,  maintained  a  stake  on  middle-­‐class  respectability  by  obfuscating   where  she  gets  food  for  her  family.  Coontz  (1992)  argues  that  middle  class  and  family   respectability  depends  on  the  illusion  of  never  receiving  state  aid—that  there  is  an   ideological  framing  or  a  conceit  on  the  part  of  middle  class  families—whereas  the  middle   class  as  we  understand  it  has  only  been  made  possible  by  massive  federal  government   support.  There  is  a  cultural  blindness  to  this  as  welfare,  that  one  of  the  political  gifts  to  the   middle  class  is  the  (false)  belief  that  families  succeed  on  their  own.  Nicole  wanted  to   maintain  her  middle  class  dignity,  propriety,  and  privacy.  Fear  of  publicizing  her  needy   status  incites  her  to  an  airy  lie  about  “shopping.”  Nicole  still  wanted  to  be  buying  it  from  the   grocery  store,  but  the  grocery  store  brings  on  new  feelings  of  anxiety.  She  recounted  that,     I’ve  never  been  an  anxious  or  nervous  person.  Never  had  anxiety  attacks.  I  go   to  the  grocery  store,  I  get  very  anxious  and  I  have  anxiety  attacks  for  buying   food  for  my  family  ‘cause  I’m  thinking,  ‘I  should  be  paying  this  bill’  or…  I  have   to  rethink  that:  this  is  for  my  family.  You  need  to  put  your  family  first  and  put   118   the  bills,  you  know…  I’m  trying  to  learn  that  things  will  have  a  way  of   working  out.  Don’t  worry,  they  work  out.  It’s  a  different  time.41       One’s  striving  for  upward  mobility,  especially  when  success  is  blocked,  is  a  source  of   consternation  and  embarrassment  to  middle-­‐class  white  ideals.  For,  as  Greenhouse  (1992)   found  in  ethnography  with  suburban  whites,  they  express  their  propriety  as  individuals   through  their  privacy.  Although  Greenhouse  was  concerned  with  these  Americans’  aversion   to  conflict,  she  notes  that  one  incentive  to  avoid  conflict  is  to  avoid  having  one’s  status   made  public.  There  is,  further,  a  gendered  dimension  to  their  exchange,  with  Nicole   performing  the  woman’s  work  of  standing  for  the  family’s  propriety  and  middle  classness   (cf.  Halle  1984).  As  they  experienced  backsliding  as  adults,  their  experience  undermined   triumphalism  of  the  American  dream  and  positions  them  as  new  kinds  of  citizens,  subjects   of  state  intervention.     Not  everyone,  however,  was  comfortable  identifying  themselves  with  those   “needing  help.”  A  Franklin  Street  housing  counseling  client  at,  Phil,  was  a  white  man  in  his   50s  who  was  injured  at  work  as  a  machinist.  His  employer  had  denied  his  worker’s   compensation  claim  and  he  was  suing  them  to  contest  the  decision.  In  the  meantime,  he   had  no  income  except  that  "my  girlfriend  gives  me  $150  twice  a  month.  She  convinced  me   to  do  this  [come  to  the  counseling  agency].  I  never  would've  done  it  on  my  own...I  applied   for  the  Bridge  card.  But  I  don't  know  if  I  can  take  the  Bridge  card  out  of  my  pocket  and  use   it.  I  have  higher  standards  for  myself."  Bridge  card  is  Michigan’s  name  for  the  electronic   benefit  card  for  the  Supplemental  Nutrition  Assistance  Program  (SNAP),  formerly  and  still   colloquially  known  as  food  stamps.  I  suggest  that  these  “higher  standards”  are  about  both  a                                                                                                                   41  Ibid.   119   class  identification  and  gender—that  his  expectations  of  his  gender  and  his  class  exhort   him  to  earn  his  living  in  the  work  force  rather  than  rely  on  government  aid.  Tami  tried  to   reassure  him,  “These  are  resources  that  are  there  for  an  emergency.  You’re  in  an   emergency.  You’re  not  taking  advantage  of  them.”42     Fraser  and  Gordon’s  (1994)  discussion43  of  the  gendering  of  the  welfare  state  is   especially  helpful  for  understanding  resistance  like  Phil’s  to  using  food  stamps.  They  argue   that  in  industrial  capitalism  characteristic  of  the  U.S.,  dependency  is  backwards  and  de   facto  feminine.  The  ideology  of  industry  is  that  wage  labor  liberates  man  from  dependence   on  other  men,  freeing  him  to  the  outcome  of  his  own  free  actions  in  the  marketplace.  In   agrarian  societies,  men  and  women  depended  on  each  other  for  farm  labor.  As  men  went  to   wage  labor  outside  the  home,  a  woman’s  dependence  on  a  man  became  “naturalized”  and  a   case  for  “good”  dependency.  When  industrial  policies  of  decentralization  and  labor  cost   cutting  undermined  the  family  wage,  women’s  economic  dependence  on  men  was  no   longer  possible  (to  the  extent  it  ever  was)  (Sugrue  1996;  Chinoy  1992).  Therefore,   according  to  Fraser  and  Gordon,  the  only  form  of  dependency  available  in  post-­‐industrial   society  is  “moral-­‐psychological”  dependency,  a  pathological  non-­‐adult,  non-­‐citizen  category   that  is  represented  by  one’s  use  of  welfare.  Phil  expressed  no  shame  about  drawing   workers’  compensation,  nor  did  anyone  I  interviewed  express  shame  about  receiving   unemployment  benefits,  confirming  that  Americans  view  social  programs  tied  to  labor   force  participation  as  earned  benefits  and  other  programs  as  (stigmatized)  welfare  (Jacobs   and  Newman  2008;  Gordon  1994).                                                                                                                   42  Fieldnotes,  May  26,  2010.   43  My  discussion  draws  on  Dean  (2010).   120     Although  Tami  counseled  her  clients  to  accept  food  stamps  as  part  of  a  temporary   hardship,  she  also  worried  that  more  people’s  reliance  on  state  aid  forewarned  of  a   national  downfall.     Yeah,  and  you  know,  I  also  think  that  America’s  gonna  lose  some  of  their   power  if  we  don’t  turn  this  around,  where  we’re,  you  know,  not  gonna  be  as   powerful  economic  wise  as  other  countries,  and  I  don’t  think  that’s  good  for   us,  ‘cause  we  keep—we  just  have  to  turn  this  around,  because  normal  people   are  going  to  need  food  stamps,  and  utility  help,  and  I  think  more  and  more   families  too  are  gonna  live  together  (my  emphasis).44     Tami  reinforced  the  dividing  line  between  the  self-­‐responsible  middle  class—“normal   people”—and  the  state’s  dependents  and,  thereby,  the  worn  line  between  the  deserving   and  undeserving  poor.  The  descent  of  formerly  middle  class  Americans  into  state   dependency  signaled  for  her  the  ruin  of  America’s  global  power.  In  doing  so,  Tami’s   comment  reinforced  the  fusion  of  the  middle  class  as  America,  as  the  source  of  both  its   power  and  identity:  being  middle  class  is  normal  and  it  is  this  classed  normalcy  that  gave   the  nation  its  historical  power.  America’s  economic  decline,  in  her  analysis,  would  reduce   not  only  in  the  ranks  of  the  middle  class  but  the  content  of  citizenship  itself.  Tami’s  concern   over  the  scope  of  the  crisis  was  far  beyond  the  necessity  for  Phil  or  any  other  of  the   hundreds,  if  not  thousands,  of  mid-­‐Michigan  homeowners  to  apply  for  food  stamps  for  the   first  time.  The  problem  was  not  additive—not  simply  that  more  people  would  need  food   stamps.  Rather,  it  was  a  qualitative  problem:  normal  people,  the  very  heart  of  the  nation,   were  on  the  brink  of  extinction.  Tami  did  not  generally  talk  about  politics;  instead,  she   preferred  to  talk  either  about  the  mechanics  of  housing  counseling,  whatever  sport  was  in   season  for  her  sons,  or  her  health,  as  she’d  recently  been  diagnosed  with  diabetes.  This                                                                                                                   44  Interview,  Tami,  October  22,  2010,  Lansing,  Michigan.   121   irruption  of  the  political  into  her  discourse  showed  the  depth  of  her  concern  about  the   normalization  of  deprivation,  angst,  and  resignation.       “The  Average  Middle  Class  Poor  Person”   “Young  men  are  the  fodder  for  older  men’s  wars,  and  I  feel  like  the  average  middle  class   poor  person—they’re  fodder  for  the  investments  of  wealthy  people.”  –Michael,  homeowner   in  Flint,  MI45         In  this  section,  I  return  to  housing  crisis  subjectivity  in  Michigan  to  argue  that,   although  it  is  of  course  marked  by  national  politics  and  discourses,  it  is  deeply  entrenched   in  a  deeper  polarization  over  the  manufacturing  economy  and  community  loyalty.     Whether  measured  by  the  99  percent  and  the  1  percent,  or  by  the  47  percent  of   “takers”  versus  53  percent  of  “makers,”  America  has,  for  the  first  time  since  the  Great   Depression,  a  more  complicated  and  explicit  national  politics  of  class.  The  Great  Recession   has  significantly  exacerbated  40  years  of  rising  inequality  in  America.  During  the  nominal   recovery  from  the  Great  Recession,  90%  of  recovered  GDP/income/wealth  has  gone  to  the   top  1%  of  the  distribution  (Saez  2012;  Krueger  2012).  This  has  become  the  well-­‐known   rallying  cry  of  the  Occupy  Wall  Street  movement.  When  I  conducted  fieldwork,  though,  the   Tea  Party  was  ascendant  but  Occupy  Wall  Street  (OWS)  had  not  yet  emerged.  Homeowners   and  housing  professionals  I  interviewed  could  not  turn  to  OWS’  discourses  but  relied  on   their  own  experiences  of  past  recessions  and  expert  interpretations  presented  in  the  media   to  come  to  grips  with  the  foreclosure  crisis.                                                                                                                     45  Interview,  Michael,  September  23,  2010,  Flint,  Michigan.   122   To  a  large  degree,  people  accepted  austerity  as  a  matter  of  commonsense  fact,  as  did   housing  counselor  Jim:     I  certainly  know  that  we’re  in  hardship.  The  other  thing  too  is  Michigan  has  always   been  a  really  plush  state.  We  always  had  great  industry  and  we  had  lots  of  money   and  there  was  lots  of  programs  available  to  the  underprivileged  and  low-­‐income   people  because  of  that.  We  were  a  wealthy  state  for  a  long,  long  time.  And  we   instituted  a  lot  of  programs  to  help  the  underprivileged.  And  I  think  it’s  a  wake  up   call  that  they’re  seeing  the  same  things.  Our  budget  can’t  support  this  kind  of   spending  any  more.  We  have  to  rethink  our  approach  to  these  problems.  You   know?46     Even  in  his  iteration  of  austerity—“our  budget  can’t  support  this  kind  of  spending   anymore,”  Jim  located  the  problem  in  a  larger  historical  pattern  of  excess  and  decline.     The  present  moment  is  lived  in  what  Jeff  Maskovsky  has  evocatively  called  austerity   citizenship,  “in  which  individuals,  families,  and  communities  must  learn  to  shoulder   hardships  and  make  sacrifices,  for  their  own  good  and  for  the  good  of  the  nation,  to  save   the  nation  from  its  profligacy…Who  is  expected  to  make  sacrifices,  not  who  is  entitled  to   rights,  becomes  the  operative  question  guiding  popular  and  political  deliberation  over  the   substance  and  limits  of  citizenship”  (Maskovsky  2012).  I  am  compelled  by  Maskovsky’s   argument  and  adopt  it  basically  wholesale  to  understand  both  national  discourses  and  the   framing  logic  for  Michiganders’  daily  lives  in  crisis.  Whereas  middle  class  citizenship  before   had  been  about  “democratic  abundance”  (May  2008)  or  the  excesses  of  neoliberal   consumerism,  the  austerity  citizen  takes  anything  she  can  get.  In  this  dissertation,  I  take  the   predicament  of  downwardly  mobile  homeowners  facing  foreclosure  to  epitomize  this   austerity  citizen.  Katrina,  a  former  loan  officer  turned  housing  counselor,  described  how   most  of  her  clients  had  lost  their  jobs:  “[N]ow  they’re  down  to  practically  nothing.  The  bulk                                                                                                                   46  Interview,  Jim,  April  13,  2011,  Owosso,  Michigan.   123   of  them  today  are  saying,  I  just  want  a  job.  Even  if  it’s  not  paying  what  I  made  before,  I  just   want  a  job  to  be  able  to  bring  some  income  into  my  household…So  with  the  salaries  going   down,  right  now  people  are  desperate,  it  doesn’t  matter.  It  doesn’t  matter.  Just  give  me   something.”47  This  is  an  evolution  of  beyond  neoliberalism,  where  citizenship  was  reduced   to  the  right  to  consume  (see  Herman  1999;  Brown  2003;  Alvarez,  Dagnino  and  Escobar   1998)  and  where  the  market  is  presumed  to  be  the  best  guarantor  of  individual  and   collective  welfare.  Austerity  makes  citizenship  about  reduction  itself  and  elides  any   guarantees  about  wellbeing.     I  also  build  on  Maskovsky’s  analysis,  using  the  historical  consciousness  that  shapes   my  informants’  experience.  Mainly,  they  interpreted  the  housing  crisis  as  an  extension  of   earlier  industrial  crises.  They  drew  in  mainstream  explanations  of  the  crisis  being  caused   by  Wall  Street,  predatory  lending,  and  mortgage-­‐backed  securities,  however,  these  were   only  the  recent  eruption  of  a  long  period  of  decline.  I  also  find  that  in  working  through   historical  and  ongoing  betrayals  by  corporations  and  the  state,  Michiganders  expressed   hope  for  a  self-­‐reliant  citizenship,  one  that  withdraws  from  both  the  State  writ  large  and   the  Market  writ  large.       Experientially,  Michigan’s  housing  crisis  is  not  understood  as  a  problem  rooted  in   the  past  couple  of  years—as  only  a  problem  caused  by  eroding  underwriting  standards  and   mortgage-­‐backed  securities—but  rather,  as  a  continuation  of  industrial  decline.  For  Timm,   one  of  the  owners  of  the  farm  profiled  in  chapter  5,  the  shift  away  from  manufacturing  is   explicitly  a  loss  of  values  and  of  great  nationhood.  The  first  day  I  went  to  the  farm,  he  was   lamenting  bitterly  over  dinner  that  America  used  to  be  a  good  country  before  it  “got  off                                                                                                                   47  Interview,  Katrina,  April  13,  2011,  Lansing,  Michigan.   124   track.”  For  him,  the  national  move  away  from  the  physical  economy  and  into  a  financialized   economy  marks  the  shift  from  honesty  to  a  sham,  from  greatness  to  betrayal.  The  United   States  was  a  great  country,  “I  think  early  70s,  the  late  60s  people  still  had  values.  They  built   good  automobiles.  You  could  buy  a  circular  saw  and  it'd  last  your  lifetime.”  “You  could  buy   a  house,”  his  wife  Maria  interjected.”  Echoing  Evelyn’s  nostalgia,  Timm  continued,  “You   could  buy  everything.     And  my  dad  worked  for  GM.  Enter,  the  accountants.  "Product  obsolescence"   became  a  household  word  amongst  the  engineers.  If  we  make  everything  last   too  long,  we're  out  of  a  job.  So  they  were  told.  But  that  wasn't  really  the  truth.   If  they'd  kept  building  really  good,  we  would  not  be  such  a  disposable  society   that  we  are  today.  But  in  the  mid-­‐70s,  then  they  started  lying.  Nixon.  The  rest   of  the  politics.  It  all  of  a  sudden  became  clear  there  was  a  hidden  agenda   behind  what  the  national  politics  were  for  this  country.48       Timm’s  pinpointing  of  troubles  arriving  with  “the  accountants”  in  the  mid-­‐1970s  maps  onto   the  larger  shift  into  financialization.  According  to  Harvey’s  (1989)  pivotal  analysis,  the   most  profound  shift  in  this  era  was  the  increasing  flexibility  exercised  by  employers  over   labor  processes  and  labor  markets.  These  developments  were  not  natural  or  necessary  but   were  compensating  strategies  deployed  in  corporations  in  the  face  of  rigidity  of  the  Fordist   production  model  and  two  global  recessions  in  the  early  1970s,  in  which  U.S.  companies   fared  rather  poorly  compared  to  competing  nations  with  lower  labor  costs;  corporations   used  the  language  of  global  competitiveness  to  justify  cutting  wages  (Nash  1989).     Globalization  was  also  of  course  hastened  by  innovations  in  financialization,  which   Harvey  defines  financialization  as  the  growth  of  diverse  financial  practices  (derivatives,   speculative  investment,  currency  trading),  with  the  effect  of  deepening  the  impact  of  these   not  only  on  business  but  also  on  the  state  and  on  daily  life  (Harvey  2005:33).  The  ability  to                                                                                                                   48  Interview,  Timm  and  Maria,  September  22,  2010,  Fenton,  Michigan.   125   earn  returns  with  speculative  capital  comes  from  exploiting  market  irregularities  and   responding  quickly  and  flexibly  to  emerging  conditions.  This  practice  emerged  around   1973  when  economists  made  innovations  in  abstracting,  quantifying,  and  calculating  risk.   The  resulting  flexibility  in  financial  movements  coincided  well  with  emerging  ideological   consensus  for  neoliberal  reforms,  including  liberalized  financial  markets  and  leaner   production.  Wall  Street,  and  the  investors  and  corporate  shareholders  it  serves,  has   emerged  as  the  driving  force  and  primary  beneficiary  of  this  corporate  and  social   restructuring  through  the  crises  of  the  1970s,  merger  and  acquisitions  boom  of  the  1980s,   dot-­‐com  bubble,  and  the  housing  bubble,  at  the  increasing  expense  of  all  other  constituent   groups  (Ho  2009).     Although  there  is  ample  evidence  of  Michiganders’  being  fed  up  with  austerity   citizenship,  it  continues  to  dominate  state  politics  in  Governor  Snyder’s  avowedly   apolitical,  vigorous  downsizing  of  the  state  and  dismantling  of  democratic  consensus—the   erosion  of  collective  bargaining  rights  and  an  impending  emergency  manager  in  Detroit,  to   name  but  two  recent  examples.  The  passage  of  right-­‐to-­‐work  bills  in  December  2012   occasioned  the  largest  protests,  estimated  at  over  12,000  opponents,  ever  held  at  the   Michigan  Capitol.  Still,  the  rights  of  public  and  private  sector  employees  to  set  up  union   shops  were  curtailed  in  a  matter  of  hours  after  the  bills’  introduction.  Such  anti-­‐democratic   measures  provide  fodder  for  a  citizenship  marked  by  inevitability,  contradiction,   disjuncture  between  public  interest  and  public  action,  and  resigned  cynicism.     Calls  for  political  renewal  I  encountered  among  interlocutors  in  the  housing  crisis   were  occasionally,  but  rarely,  linked  to  reengagement  with  political  representatives.  This  is   not  to  say  people  did  not  engage  their  representatives:  indeed,  as  detailed  in  chapter  4,   126   distressed  homeowners  fervently  recruited  state  institutions  and  officials  to  act  on  their   behalf.  Instead,  there  was  a  great  deal  of  talk  about  politicians’  inefficacy  and  selling  out  to   corporate  interests—that  was  seen  as  a  given.  National  politics  since  the  arrival  of  the  Tea   Party  have  been  marked  by  an  explicit  polarization  around  whether  and  how  the  state  or   market  can  be  solutions  to  social  problems.  In  my  research,  I  found  people  working   through  that  debate  but  also  withdrawing  from  its  premises  about  the  State  writ  large  and   the  Market  writ  large.     Where  certain  people  sought  political-­‐economic  change  was  in  self-­‐reliance  and   community-­‐based  solutions.  To  a  one,  my  informants  emphasized  the  vital  necessity  of   getting  more  jobs  back  in  Michigan.  What  interests  me  for  the  purpose  of  fleshing  out  this   austerity—or  post-­‐austerity—citizenship  is  the  perspective  of  Michiganders  who   emphasized  entrepreneurialism  and  community  connection,  while  rejecting  corporate  or   external  solutions.  This  was  not  the  predominant  perspective  of  people  I  spoke  with—the   dominant  feeling,  rather,  was  one  of  uncertainty  about  what,  if  anything,  would  be  coming   back  to  Michigan.  I  explore  the  entrepreneurial  perspective  because  it  illustrates  fissures  in   and  overlaps  with  austerity  citizenship.     Marta’s  analysis  of  Michigan  tacked  from  the  decline  of  manufacturing  to  corporate   skepticism,  outlining  the  sense  of  this  crisis  as  the  gateway  into  an  epochal  historical  shift:   I  grew  up  just  north  of  Flint…And  one  day  I  think  there  was  maybe  a  tenth  of   the  jobs  that  were  originally  in  the  city  of  Flint  who  are  now  employed  by   General  Motors  [as]  there  were  in  the  70s…I  mean,  that's  the  whole  state   now  is  struggling  because  there  are  so  many  industries  that  were  built  off  of   supportive  industries  that  were  built  off  of  the  automotive  industry  that  it's   really  a  painful  (garbled)  for  people.  These  are  cities  who  50  or  60  years  ago   are  stark  opposites  of  what  they  are  today…it's  a  different  world.       As  this  30-­‐something  housing  professional  continued  her  analysis,  she  tallied  the   127   shortcomings  of  Michigan  workers,  the  state  government,  and  corporations  to  create  a   shared  prosperity:   And  I  think  the  whole  mentality  of  not  continuing  to  invest  in  yourself   through  education  has  really  made  it  hard  for  people,  because  people  haven't   gotten,  that  sort  of  that—oh,  I  just  need  to  finish  high  school  and  that's  the   big  deal  and  then  I'll  just  go  find  a  job—and  those  low  skill  jobs  are  fewer  and   far  between.  So  now  there's  a  whole  group  of  people  who  just  don't  have  the   skills  to  be  out  in  the  world  and  successful,  and  even  if  there  were  jobs—are   those  the  jobs  that  are  gonna  pay  a  living  wage?  And  so,  I  mean  I  think  we   desperately  need  to  invest—now  I'm  like  editorial,  I  think,  but  we   desperately  need  to  invest  in  education  and  that  needs  to  be  made  a  priority.   We  need  to  create  a  culture  of  learning  here  in  this  state  and  continual   investment  in  ourselves.       Marta  is  correct  in  her  analysis  that  there  are  few  living  wage  jobs  available  to  those   without  higher  education—and,  increasingly,  to  those  with  it.  In  her  analysis  of   deindustrialization  in  Wisconsin,  Dudley  (1994)  shows  that  it  is  the  disappearance  of   middle-­‐wage  jobs,  such  as  those  of  the  auto  assembly  workers  she  studied,  that  started  the   post-­‐1973  polarization  of  wealth  that  became  so  much  starker  after  2008.  In  words  eerily   reminiscent  of  Marta’s,  Dudley  finds  that  white-­‐collar  professionals  derided  blue-­‐collar   workers  for  their  outmoded  attachment  to  “work  of  the  hands”  instead  of  “work  of  the   mind,”  which  is  regarded  as  more  highly  skilled  and  more  appropriate  to  the  present  day.   The  bigger  problem  for  Marta  is  not  manual  labor  per  se,  but  the  dependency  it  creates   upon  another:       Because  we're  now  the  biggest  commodity,  it's  not  like  they're—and  I  think   we  also  get  caught  in  this  thing  of  waiting  for  people  to  create  jobs  for  us  as   opposed  to  creating  opportunities  for  ourselves.  And  I  don't  mean  from  like  a   bootstraps,  like  go  out  and  do  your  own  thing,  but  there's  a  lot  of  talent  in   this  state  and  we  haven't  really—we've  been  living  in  a  time  when  we've   been  called  on  to  use  it,  I  think  for  (garbled)  so  I  think  if  ever  there  was  a   time,  here  it  is.49                                                                                                                   49  Interview,  Marta,  August  19,  2010,  Lansing,  Michigan.   128     In  Marta’s  esteem,  both  corporate  attachment—“waiting  for  people  to  create  jobs  for  us”— and  the  “bootstraps”  mentality  are  outmoded  subjectivities.  She  also  rejects  the  old-­‐ fashioned  “bootstraps”  discourse,  but  refashions  it  as  workers’  talents  and  capacity  for   entrepreneurialism.   Entrepreneurship  is  at  the  heart  of  neoliberal  subjectivity  in  both  industrialized  and   developing  countries.  The  fervor  for  microcredit  and  artisan  enterprises  in  the  Global   South  attests  to  the  degree  to  which  development  strategists  have  sought  to  change   people’s  livelihoods  and  subjectivities  through  increasing  attachment  to  the  market   (Elyachar  2002).  Thatcherism  ushered  what  it  self-­‐described  as  an  “enterprise  culture,”   aiming  to  inculcate  in  its  citizens  a  constant  striving  and  deep-­‐felt  conviction  that  “the   world  does  not  owe”  any  person  a  living  (Heelas  and  Morris  1992:PP).  In  the  United  States,   this  ethic  has  of  course  meshed  easily  with  the  American  dream  and  meritocracy  myth.   Even  when  one  could  not  be  an  entrepreneur-­‐as-­‐business  owner,  one  could  be  an   entrepreneur  of  the  self,  constantly  improving  one’s  dispositions  and  self  care,  and  of  one’s   wealth  outside  the  job.  The  two  are  fused,  as  one  earns  esteem,  self-­‐  and  others’,  through   savvy  investing  (Shiller  2008:57).     Michael,  the  Flint  homeowner  whose  quote  opened  this  section,  had  given  up  on   investing.  After  what  he  described  as  failed  attempts  in  the  financial  markets,  and  having  a   deeply  underwater,  he  concluded  that  the  “average  middle  class  poor  person”  was  “fodder   for  the  investments  of  wealthy  people.”  His  cynicism  echoed  the  way  financial  media  and   Karen  Ho  (2009)  described  Deutsche  Bank’s  acquisition  of  two  subprime  mortgage   servicers  in  2006:  quoting  Financial  News  Online,  Ho  explains  the  bank’s  motivation  “to   become  a  leading  player  in  all  aspects  of  the  business  and  to  gain  'access  to  a  steady  source   129   of  product'  (that  is,  the  raw  materials  of  actual  loans)  'for  our  securitization  program'   (McCandless  2006)"  (Ho  2009:319,  my  emphasis).   Michael’s  solution  to  corporate  betrayal  was  to  circumvent  them  through  a  localized   livelihood  strategy:  he  opened  a  bookshop  and  worked  at  the  Flint  city  market,  also   promoting  a  local-­‐first  ethic,  to  supplement  his  income.  Even  though  Michael’s  bookstore   was  failing  and  he  was  selling  his  house  in  Flint  for  one-­‐quarter  of  what  he  owed  and   considering  moving  out  of  state  where  his  wife  was  pursuing  a  job,  he  professed  a   citizenship  of  reinvigorated  localism.   Yet  I  am  suggesting  that,  at  least  in  part,  the  emphasis  on  entrepreneurship  in   Michigan  was  not  an  unbroken  deepening  of  neoliberal  belief.  Rather,  it  reflected  an   articulation  of  elements  of  several  historical  political  economies.  In  this  imagined   citizenship,  the  self-­‐made  (wo)man  of  an  older  American  dream  embodies  neoliberal   entrepreneurship  and  community  values.  At  the  same  time,  she  has  a  postmodern  rejection   of  universalizing  claims—in  this  case,  that  a  generic  free  market  or  a  global  corporation  can   provide  for  her.  Instead,  the  market  must  be  constrained  and  specified,  scaled  to  human   relations  rather  than  global  flows.  This  prospective  citizenship  is  a  response  to  the  utter   failure  of  the  master  institutions  of  state  and  market  to  fulfill  their  promises  of  protection   and  provisioning.  Saegert,  Fields,  and  Libman’s  foreclosed  homeowners  from  5   geographically-­‐dispersed  U.S.  cities  also  felt  that  “the  America  they  lived  in  did  not  live  up   to  the  terms  of  the  bargain…Many  redoubled  their  efforts  at  self-­‐reliance,  based  on  the   conviction  that  they  were  truly  on  their  own  to  sink  or  swim”  (2009:312).  Beyond  the   aspirations  and  incipient  projects  of  a  handful  of  Michiganders  and  other  foreclosed   homeowners,  I  find  this  revamped  localism  and  rejection  of—and  by—institutions  in   130   diffuse  movements  from  homesteading  (e.g.,  urban  farming,  domestic  handicrafts,  self-­‐ provisioning)  and  doomsday  forecasters  (e.g.,  “preppers”).  A  long  string  of  economic  crises,   institutional  failures,  and  a  perceived  loss  of  morality  have  left  people  feeling  that  America   and  its  middle  class  are  “not  what  they  used  to  be”  but  not  knowing  what  they  are  or  what   they  might  become.  In  the  next  two  chapters,  I  provide  partial  views  of  this  emergent   citizenship.     131   Chapter  4:  Financialization,  Debt,  and  Ownership       In  their  simplest  form,  mortgages  are  contracts  between  a  borrower  and  a  lender  for   repayment  of  money,  plus  interest,  to  a  lender  that  provided  funds  for  the  purchase  of  real   property  a  borrower  could  not  purchase  with  her  own  cash.  A  mortgage  is  a  pledge  to   complete  an  obligation.  The  term  derives  from  the  Latin  “gage,”  meaning  a  pledge  of   something  (land)  as  a  security  against  money  lent  or  services  rendered  to  the  landholder   (Maurer  2006:16).  In  medieval  times,  mortgages  were  considered  sinful  because  interest   itself  was  considered  usury.  A  mortgagee  (lender)  could  mitigate  the  effect  of  the  sin  on   their  soul  if  the  debt  was  repaid  before  he  died;  otherwise,  he  was  considered  to  have  died   a  usurious  sinner.  For  these  reasons,  Maurer  concludes  that  even  a  “conventional  mortgage   cannot  be  understood  as  a  purely  secular,  rational  affair.  It  is  bound  up  in  notions  of   intimate  and  ultimate  order,  questions  of  life  and  death,  and  the  status  of  the  eternal  soul”   (Maurer  2006:97).   The  cultural  model  of  buying  a  house  is  this:  a  homebuyer  gets  a  loan  from  her  local   bank  or  credit  union,  which  is  granted  out  of  its  in-­‐house  resources.  She  then  repays  the   loan  over  30  years;  her  monthly  principal  and  interest  payments  become  part  of  the  bank’s   resources  to  make  new  loans.  In  industry  language,  this  is  a  “portfolio  loan,”  where  the   original  lender  holds  the  debt  and  services  the  loan.  It  is  a  single  package  of  physical   space—the  bank—and  relationship—between  the  homebuyer  and  the  banker.  Through   this  simple  and  enduring  relationship  with  her  banker,  a  homebuyer  achieves  over  time  all   the  cultural  benefits  of  homeownership:  respectability,  autonomy,  and  equity.  In  the  1970s,   Constance  Perin  argued  that     132   [O]ne's  creditability  as  a  fully  social  person  is  enhanced  by  the  long-­‐term   obligation  represented  in  homeownership...Being  less  under  social  control  of   the  landlord  than  the  owner  is  of  the  banker,  the  renter,  lacking  that  tie,  is   not  integrated  into  the  wider  system  through  the  sanctions  of  foreclosure,   the  loss  of  property,  lifesavings,  and  social  worth,  or  the  exercise  of  equal   political  rights.  (1977:76-­‐77)     Further  adding  to  the  mortgage’s  virtue,  the  homeowner’s  loan  repayments  support  the   aspirations  of  other  bank  customers,  read  as  “community  members.”  Mortgage-­‐holders   consent  to  be  subjected  to  bankers,  who  confer  not  only  capital  but  also  social  standing,  in   contrast  to  landlords  who  do  not  confer  social  status  but  merely  take  money.     Anthropologists  have  long  argued  that  being  indebted  is  foundational  to  social   personhood,  status,  and  economic  relations.  It  is  also  increasingly  clear  that  practices  of   credit/debt  throughout  the  world  set  up  and  reinforce  economic  institutions  and  a  moral   universe  that  almost  universally  associates  credit  with  power  and  prestige  and  debt  with   weakness  (Peebles  2010).  Different  kinds  of  debt  have  different  moral  resonances  and   being  able  to  sustain  the  right  kinds  of  debt  is  a  source  of  positive  identity.  In  American   commonsense,  “good  debt”  includes  those  taken  on  to  pursue  education,  start  a  small   business,  or  buy  a  home—debts  that  link  directly  to  the  trappings  of  the  American  dream.   “Bad  debt”  includes  consumer  debts  like  credit  cards  and  personal  loans.50  Those  who   carry  primarily  good  debt  are  considered  (and  usually  consider  themselves)  good  citizens   who  are  disciplined  and  diligent  (see  Williams  2004).     Homeowners  I  interviewed  for  this  project  embraced  these  premises,  noting  that,   “I've  rented  houses  and  apartments  and  end  up  with  nothing  to  show  for  it.  You  pay  all  this                                                                                                                   50  This  dichotomy  ignores  how  frequently  Americans  resort  to  credit  cards  and  personal   loans  to  pay  for  education,  living  expenses  while  in  school,  healthcare,  and  other  basic   necessities.  This  increases  class  inequality  as  Americans  use  credit  to  salvage  the   appearance  of  a  broad  middle  class  (Williams  2004;  see  also  Reich  2010).     133   money;  well  you  could  have  bought,  paid  for  a  house  years  ago  with  all  that  rent  you've   paid.  So  you  know,  at  least  the  house  is  home.  It's  something  I  can  call  my  own  once  it's   paid  off;  I  know  the  money's  goin'  towards  it.”51  Homeowners  feel  that  buying  a  house   liberates  them  from  the  bonds  of  others—either  by  allowing  more  daily  freedom  to  “play   my  music  a  little  bit  louder  than  normal”  or  by  not  supporting  the  landlord’s,  wealth-­‐ building.  In  this  cultural  model,  Americans  chafe  at  the  visibility  of  their  subjection  to  the   landlord  and  prefer  the  status  (and  material  gain)  that  a  relation  to  the  banker  conveys.     To  riff  on  Karen  Ho’s  recent  commentary  (2012)  on  corporations,  the  fact  is  simply   that  the  homeownership  “of  our  imagination  does  not  exist.”  Since  Perin  wrote  about  the   social  standing  that  one’s  affiliation  with  a  banker  provides,  there  have  been  fundamental   shifts  in  financial  markets  overall  and  the  mortgage  market  in  particular.  The   contemporary  mortgage  and  financial  market  is  based  on  risk-­‐based  pricing.  From   mortgage  terms,  such  as  higher  interest  rates  and  closing  costs,  to  the  market  for  mortgage-­‐ backed  securities,  everything  hinges  on  abstract,  quantifiable,  and  socially  disembedded   notions  of  risk  (c.f.  LiPuma  and  Lee  2004).  These  instruments—which  economic   anthropologists  warned  before  the  recent  crash  would  undermine  both  financial  systems   and  democratic  practice  (LiPuma  and  Lee  2004;  Tett  2009)—have  multiplied  and  mutated   traditional  ties  between  creditor  and  debtor  (see  Table  4).  The  vast  majority  of  mortgages   are  not  portfolio  loans  but  are  sold  on  the  secondary  market—approximately  9  out  of  every   10.52  Mortgages  sold  on  the  secondary  market,  either  to  the  government-­‐sponsored                                                                                                                   51  Interview,  Andre,  September  9,  2010,  East  Lansing,  Michigan.   52  The  OCC  &  OTS  Mortgage  Metrics  Report  collects  data  on  the  largest  national  mortgage   servicers;  more  than  90%  of  loans  they  report  on  are  serviced  for  others—either  through   134   enterprises  (GSEs)  Fannie  Mae  and  Freddie  Mac  or  to  private  investors,  are  reincarnated  as   mortgage-­‐backed  securities,  which  introduce  a  complicated  terrain  among  debtors  and  a   more  numerous  set  of  creditors,  rather  than  a  dyadic  mortgagor-­‐mortgagee  relationship.     In  this  chapter,  I  argue  that  homeowners  are  no  longer  in  a  relationship  with  a   banker  but  with  finance,  a  web  of  related  practices  in  which  one’s  banker  is  just  one  actor   (key  players  are  described  in  Table  4).  The  fundamental  shift  from  banking  to  finance   becomes  visible  and  frictional  when  homeowners  try  to  renegotiate  their  mortgage   contracts.  I  discuss  the  highly  liquid  model  of  ownership  promoted  by  financial  institutions   during  the  housing  boom;  the  blurring  of  domains  of  market  and  state  authority  as   represented  in  the  policy  of  Too  Big  to  Fail  (TBTF);  and  how  distressed  homeowners   experience  both  the  state  and  banks  as  corrupt,  unpredictable,  and  illegitimate  when  they   are  facing  mortgage  default.                                                                                                                     sale  of  the  loan  to  another  institution  or  through  securitization.  The  rate  of  holding  loans  in   portfolio  (or  servicing  in-­‐house)  is  higher  for  small  banks  and  credit  unions,  though  the   overall  rate  of  portfolio  loans  is  small.  See  OCC  Mortgage  Metrics  Reports  here:   http://www.occ.treas.gov/publications/publications-­‐by-­‐type/other-­‐publications-­‐ reports/index-­‐mortgage-­‐metrics.html.   135   Table 4. Primary and Secondary Mortgage Market Terminology Primary mortgage market Homeowner (syn. homebuyer, borrower, mortgagor) Lender (syn. bank, servicer, mortgagee) Mortgage broker Underwriter Originator Servicer Transactions where homebuyers and lenders or mortgage brokers agree to terms of a mortgage contract and the originator provides funds for purchase of a house. Borrows money from a financial institution to finance the purchase of a property. Catchall term for the institution that issues, owns, or services a mortgage. Usually a financial institution (e.g., a bank, wholesale lender) that provides funds for the purchase of a house. An individual or company that works with one or more wholesale lenders to offer a range of mortgage products, not only those of one institution. Mortgage brokerages are not subject to the same federal oversight as depository institutions (e.g., banks). Person or organization that scrutinizes a homebuyer’s financial information and terms of the loan for financial risk and soundness. Entity that provides funds for initial home purchase. Organization that accepts mortgage payments, maintains escrow account, and negotiates modifications. May or may not be the same entity as the lender from which the mortgage was obtained. Secondary mortgage market Mortgage-backed security Transactions where mortgages are sold to third parties as whole mortgages or as mortgage-backed securities. Derivative based on the loan performance of a single mortgage or slices of thousands of mortgages in a pool Investor Institution or pool of individuals who own a mortgage in whole or in part as mortgage-backed securities. The investor purchases the debt from the mortgage originator and is the ultimate owner of the mortgage debt (the note). Fannie Mae, Freddie Mac, and Ginnie Mae. These governmentbacked (and, as of 2008, government owned) companies purchase mortgages issued by conventional lenders, mortgage brokers, and government entities (e.g., Veterans Administration and those insured by the Federal Housing Administration). Mortgage-backed security owned by investors other than the GSEs. Governmentsponsored enterprises (GSEs; syn. “agency”) Private-label security   136   Financializing  Mortgages  and  Too  Big  to  Fail   Around  the  time  my  HELOC  account  was  frozen  in  the  spring  of  2008,  the   investment  bank  Bear  Stearns  was  bought  by  J.P.  Morgan  Chase  in  an  emergency  buyout,  at   a  price  of  about  $10  per  share.  Like  most  investment  banks  in  the  early  2000s,  Bear  Stearns   had  invested  heavily  in  subprime  mortgage-­‐backed  securities  and  was  imploding  as   borrowers  defaulted  on  their  loans.  “Subprime”  nominally  means  a  loan  made  to  someone   whose  risk  criteria  are  higher  than  the  industry  norms,  such  as  a  loan  made  to  someone   with  a  credit  score  of  600  instead  of  the  620  or  660  required  to  receive  the  prevailing   market  interest  rate.  As  mentioned  in  chapter  1,  investment  banks  were  keen  to  purchase   these  loans  from  mortgage  originators  who  had  loosened  underwriting  standards  in  order   to  meet  investment  demand  and  had  no  stake  in  the  underlying  quality  of  the  mortgages.     Many  of  the  thousands  of  new  mortgage  brokers  who  entered  the  field  to  participate   in  the  boom  did  not  have  the  experience  or  training  to  assess  their  quality,  either.  Juanita,  a   housing  counselor  in  Lansing,  worked  as  a  broker  for  four  or  five  years  in  the  early  2000s.   She  was  recruited  by  a  friend  of  hers  who  “brought  me  there,  kinda  showed  me  a  little  bit   and  dropped  me  off  and  took  off,  and  there  you  go,  there’s  your  desk,  figure  it  out.  And   that’s  what  I  did.”  Juanita  did  not  close  many  loans  during  her  time  as  a  broker  because  she   felt  uncomfortable  with  the  pressure  from  her  supervisors  to  originate  a  high  volume  of   loans  and  wrap  hidden  fees  into  the  cost.  Her  manager  would  demand  to  know,     “‘How  many  files  do  you  have  in  your  pipeline,  what  are  you  closing  this   month  and  if  you’re  not  conducting,  if  you’re  not  closing,  then  get  out  of  my   office,  it’s  as  simple  as  that”…If  I  were  to  charge  the  minimum,  like  $2,000  or   $3,000  for  a  closing,  it’s  like,  “why  aren’t  you  charging  them  (garbled)—and   those  are  hidden  fees,  so  you  don’t  see”—I’m  like,  I  can’t  do  that.  That’s  going   137   to  raise  their  interest  up,  you  know  what  I  mean?  It’s  gonna  bump  this  up  or   it’s  gonna…  I  just  couldn’t  do  it.53     Thousands  of  other  brokers  did  originate  mortgages  like  these  in  order  to  sell  them  to   investment  banks  like  Bear  Stearns,  Goldman  Sachs,  Deutsche  Bank,  and  Citi,  and  J.P.   Morgan  to  package  as  private-­‐label  mortgage-­‐backed  securities.       Where  Michigan  differs  from  other  high  foreclosure  states  is  that,  although  there   was  certainly  predatory  lending  contributing  to  foreclosures,  especially  in  minority   communities,  joblessness  was  always  a  major  driver  of  foreclosures.  So  although  some   people  I  knew  had  predatory  loans,  they  did  not  have  mortgage  trouble  only  because  of   predatory  lending  but  also  because  they  lost  jobs,  hours,  or  wages.  On  top  of  Michigan’s   long-­‐running  recession,  the  jobs  situation  was  of  course  worsened  by  General  Motors’   bankruptcy  in  2009,  which  led  to  an  estimated  8,800  direct  jobs  lost  in  Michigan,  not   including  at  suppliers.  So  while  there  were  unique  issues  before  and  during  the  crisis,  those   were  amplified  by  the  better-­‐known  stories  of  the  financial  crisis  qua  mortgage-­‐backed   securities  and  the  bank  bailout.  Yet,  the  story  of  the  housing  crisis  cannot  be  told  without   discussing  the  key  role  of  reckless  mortgage  lending,  mortgage-­‐backed  securities,  and  bank   bailout  that  plummeted  the  US  economy  into  the  worst  recession  since  the  Great   Depression.   Outside  of  their  disempowered  risk  officers,  investment  banks  had  little  interest  in   scrutinizing  the  mortgages—because  doing  so  would  decrease  their  share  of  what  was   nearly  a  $3  trillion  market  at  the  height  of  the  bubble.54  A  collateralized  mortgage                                                                                                                   53  Interview,  Juanita,  October  6,  2010,  Okemos,  Michigan.   54  Ho  notes  banks’  contradictory  practices  about  risk:  “While  touting  (even  selling)  their   risk-­‐management  capabilities,  most  investment  banks  do  not  heed  their  own  cautions  or   138   obligation  (CMO)  is  composed  of  thousands  of  mortgages;  investors  buy  portions  of  this   “pool”  of  mortgages.55  Securitizing  loans  in  this  way  is  useful  for  banks  because,  as   opposed  to  a  portfolio  loan,  the  bank  recoups  the  total  amount  lent  immediately  rather   than  over  the  30-­‐year  life  of  the  loan.  Securitization  gives  lenders  more  liquidity  (cash   resources)  to  make  more  loans  and  the  mortgage-­‐backed  securities  offer  a  steady  stream  of   income  to  investors  in  the  pool  of  mortgages  as  borrowers  repay  them.  As  has  been  well   rehearsed  in  the  financial  media  by  now,  a  pool  of  mortgage-­‐backed  securities  is  divided  up   into  tranches  (tiers)  based  on  calculations  of  the  risk  that  the  homeowners  attached  to  the   mortgages  underlying  the  security  will  default  on  their  loans.  Riskier  tranches  have  a   higher  proportion  of  high  interest  rate  loans,  which  for  at  least  two  reasons  decrease  the   chances  that  investors  will  get  a  steady  stream  of  income.  First,  people  with  high  interest   rates  are  more  likely  to  refinance  if  interest  rates  go  down,  meaning  they  will  “pre-­‐pay”  the   loan  before  its  (for  example)  30-­‐year  maturity  date.  Second,  those  with  high  interest  rates   are  likely  to  receive  them  because  underwriters  perceive  them  as  less  likely  to  maintain   their  payments  in  the  first  place—that  is,  more  likely  to  default  (and  less  likely  to  qualify   for  refinancing).  In  a  CMO,  riskier  tranches  of  the  pool  offer  higher  financial  rewards— because  the  chances  of  default  (that  is,  of  getting  nothing)  are  also  higher.  Freddie  Mac   created  the  CMO  and  first  sold  them  in  1983  but  the  market  for  them  picked  up  after   financial  deregulation  made  it  possible  for  more  investors  to  enter  this  market   (Immergluck  2009).  The  most  common  investors  are  still  the  GSEs.  Fannie  Mae  (the                                                                                                                   recommendations,  as  deal  making  and  demonstrating  market  vanguard  status  are  more   highly  valued”  (Ho  2009:349-­‐350,  fn.  8).     55  Other  types  of  mortgage-­‐backed  securities,  such  as  “pass-­‐through  securities”  are  also   composed  of  pools  but  are  not  differentiated  by  level  of  risk.   139   Federal  National  Mortgage  Association)  was  created  in  1938  to  buy  FHA-­‐insured  loans   from  lenders.  It  was  privatized  in  the  late  1960s,  but  retained  a  public  service  mandate  to   serve  all  communities  at  all  times,  and  an  implicit  government  guarantee.  Freddie  Mac   (Federal  Home  Loan  Mortgage  Corporation)  was  chartered  in  1970,  at  which  point  the   GSEs  began  selling  mortgage-­‐backed  securities.  Although  the  GSEs  controlled  more  than   half  the  market  in  the  1990s,  at  the  height  of  the  housing  bubble,  just  over  one-­‐third  of   loans  were  sold  to  the  GSEs.56  The  remainder  was  largely  sold  to  other  investors,  via  and  to   investment  banks  like  Bear  Stearns,  Goldman  Sachs,  and  others,  as  private-­‐label  securities.   These  loans  did  not  have  to  meet  the  underwriting  criteria  established  by  the  GSEs—low  or   “no  documentation”  loans  are  more  common  in  private-­‐label  securities.  Housing   counselors  I  worked  with  explained  that  private  investors  were  usually  attached  to   subprime  loans,  an  issue  to  which  I  return  below.     At  the  height  of  the  housing  bubble  in  the  mid-­‐2000s,  the  average  new  mortgage   was  likelier  than  an  older  mortgage  to  be  given  to  a  borrower  with  a  higher  level  of  debt— making  it  harder  for  her  to  pay  back  the  loan—and  may  have  been  given  without  much   supporting  documentation  of  her  income  or  ability  to  pay  (e.g.,  HUD  2010;  Haughwout  et  al   2011).  Wall  Street  brokers  designed  mortgage-­‐backed  securities  that  pooled  together   thousands  of  these  marginal  loans—often  aggressively  marketed  by  brokerages  like  the   one  Juanita  worked  for—and  argued  that  by  bundling  thousands  of  risky  loans  together,   the  whole  bundle  was  more  stable  than  its  constituent  parts  (Tett  2009;  cf.  Lewis  2009).   The  claim  that  thousands  of  risky  mortgages  are  more  stable  than  a  single  risky  mortgage                                                                                                                   56  http://www.nationalmortgagenews.com/nmn_features/gses-­‐gnmas-­‐only-­‐game-­‐in-­‐ town-­‐1025646-­‐1.html   140   implies  a  level  of  abstraction  and  fetishism  that  defies  the  assertion  that  financial  experts   believe  that  “derivatives  are  the  sum  of  their  formal  properties”  (LiPuma  and  Lee  2004:   154).     For  the  MBS  and  other  securities  markets,  three  major  ratings  agencies  (Moody’s,   Standard  &  Poor’s,  and  Fitch  Ratings)  are  tasked  with  evaluating  the  risk  inherent  in  an   offering.  A  major  flaw  in  the  financial  architecture  was  that  securities  issuers,  rather  than   buyers,  paid  the  ratings  agencies  for  their  work,  creating  an  incentive  for  the  ratings   agencies  to  rubber-­‐stamp  MBS  pools  with  the  highest  rating  (AAA)  in  order  to  keep  their   market  share.  In  practice,  this  allowed  investment  banks  to  issue  trillions  of  dollars  of  bad   debts  to  other  banks  and  bank  holding  companies,  pension  and  insurance  funds,  and  the   GSEs.  Investment  banks  escalated  the  complexity  of  instruments  to  further  hedge  against   the  risk  of  their  MBS,  creating  pools  composed  of  slices  of  other  pools,  credit  default  swaps   (CDS;  insurance  against  losses),  and  synthetic  CDS,  that  is  a  CDS  divorced  from  any   underlying  asset.  Ho’s  (2009)  investment  banker  informants  were  proud  of  how  “we  are  so   much  smarter  than  the  folks  in  risk  management  and  audit”  because  whereas  traditional   risk  management  would  counsel  banks  to  move  money  away  from  risky  deals  (costing  the   institution  possible  profit),  traders  managed  risk  by  selling  it  (Ho  2009:322).   By  offering  these  investments  as  collateral  on  further  trades,  the  largest  investment   banks  at  the  height  of  the  bubble  were  leveraged  $40  to  $1.  That  is,  for  every  $40  of  debt   they  held,  they  had  only  $1  of  cash.  Therefore,  when  mortgagers  started  defaulting,   investment  banks  lost  income  (liquidity),  the  ability  to  pay  their  current  debt  service   obligations,  and  the  collateral  they  had  posted  began  to  other  institutions  began  to  appear   worthless.  By  March  2008,  Bear  Stearns  had  so  many  losses  from  its  MBS  assets,  it  was   141   literally  out  of  liquidity  for  the  trading  day  Friday,  March  14.  The  Federal  Reserve   negotiated  a  deal  with  J.P.  Morgan  Chase  wherein  the  Fed  purchased  $29.97  billion  of  non-­‐ performing  assets  from  Bear—mainly  MBS  and  other  hedges  from  Bear’s  mortgage  trading   desk—while  J.P.  Morgan  Chase  bought  the  remainder  of  Bear  for  $10  per  share.  Because   Bear  had  such  a  large  volume  of  assets  and  its  trades  were  so  heavily  tied  up  in  the   operations  of  other  banks,  Fed  officials  felt  justified  in  calling  the  circumstances  “unusual   and  exigent,”  as  required  to  activate  its  extraordinary  lending  powers  under  section  13(3)   of  the  Federal  Reserve  Act  (FCIC  2011).     Since  the  1980s,  federal  regulators  have  chosen  interventions  that  avoid  systemic   risk  rather  than  imposing  market  discipline  on  failing  institutions  (FDIC  1997).57  Although   Too  Big  to  Fail  (TBTF)  is  indelibly  tied  to  the  collapse  of  2008,  the  concept  was  prefigured   in  the  “essentiality”  clause  of  the  1950  FDIC  reforms.  Prior  to  1950,  the  FDIC  had  two   options  to  respond  to  a  failing  bank:  either  to  find  another  bank  to  buy  the  failing   institution  and  assume  its  assets  and  liabilities—as  JP  Morgan  Chase  did  with  Bear—or  to   pay  off  the  insured  depositors  with  its  insurance  funds.  The  1950  reform  offered  the  FDIC  a   third  option,  “open  bank  assistance,”  which  allows  the  agency  to  increase  its  lending  to  a   struggling  institution.  Intellectually,  this  is  another  variant  of  the  argument  posed  about   systemic  risk—that  if  one  bank  fails,  it  is  so  connected  to  other  banks  it  will  precipitate  a   waterfall  of  failures.  The  FDIC  may  invoke  the  essentiality  clause  if  the  agency  deems  the   bank’s  functions  to  be  economically  vital  to  the  community.  Essentiality  exceptions  must  be                                                                                                                   57  In  contrast,  developing  countries  who  are  more  indebted  to  foreign  lenders,  especially   the  International  Monetary  Fund,  have  been  forced  to  accept  market  discipline  via   structural  adjustment  packages  that  require  domestic  reforms  such  as  cutting  public   services  and  privatizing  resources  as  conditions  for  receiving  IMF  rescue  funds  to  continue   servicing  their  debts.   142   approved  by  two-­‐thirds  of  the  FDIC  and  Federal  Reserve  Boards  with  final  approval  from   the  Secretary  of  the  Treasury,  in  consultation  with  the  president  (FDIC  1997).     The  FDIC  first  invoked  the  essentiality  clause  until  1984  when  it  provided  open-­‐ bank  assistance  to  Continental  Illinois  National  Bank  and  Trust  Company,  at  the  time  the   seventh-­‐largest  bank  in  the  country.  In  key  ways,  the  Continental  Illinois  presaged  the   design  of  the  2008  Troubled  Assets  Relief  Program  (TARP),  discussed  below.  Continental   Illinois  had  been  a  long-­‐standing  and  stable  bank  that  took  on  tremendous  risky  debts  in   the  real  estate  and  developing  country  debt  markets  in  the  late  1970s  (FDIC  1997).  The   most  controversial  part  of  the  rescue  package  put  together  by  the  FDIC  was  that  the  agency   purchased  $4.5  billion  of  Continental  Illinois’  non-­‐performing  loans,  giving  the  federal   government  an  80  percent  ownership  stake  in  the  salvaged  bank,  which  at  the  time  critics   blasted  as  “nationalization”  (FDIC  1997).  In  its  analysis  of  Continental  Illinois,  the  FDIC   concluded  that  nothing  other  than  purchasing  bad  loans  was  unprecedented:  what  made   that  bailout  controversial  was  the  acquisition  of  private  assets  with  federal  funds.  What  the   Continental  Illinois  bailout  did,  though,  was  make  explicit  the  government’s  guarantee  of   big  banks—in  its  wake,  the  Comptroller  of  the  Currency  stated  that  the  government  could   not  let  the  largest  11  financial  institutions  fail.  Prior  to  that,  financial  institutions  had  been   less  sure  of  how  the  government  would  respond  to  large-­‐bank  failures.     TBTF  exemplifies  the  conflicted  complicity  of  state  with  market.  Because  while   TBTF  ultimately,  of  course,  protects  financial  institutions,  it  is  a  policy  borne  of  the   government’s  coexisting  desires  to  protect  markets  in  service  of  the  greater  wellbeing,   echoing  Wendy  Brown’s  (2003)  assertion  that  under  neoliberalism,  “the  health  and  growth   of  the  economy  are  the  basis  of  state  legitimacy.”  In  one  sense,  TBTF  attempts  to  fuse  the   143   state,  the  market,  and  the  public  by  literally  investing  taxpayers  in  the  health  of  financial   institutions.  TBTF  also,  however,  exemplifies  substantial  mistrust  in  market  actors’   calculative  capacity  to  “distinguish  between  viable  and  nonviable  banks”  (FDIC  1997:45)  in   moments  of  crisis.  The  existence  of  TBTF  attests  to  the  philosophical  tension  between   market  discipline  and  systemic  risk.  On  one  hand,  market  discipline  would  require  that   banks  suffer  the  consequences  of  their  overly  risky  lending.  The  inherent  danger  in  that   approach  is  that  many  of  the  institutions  were  so  highly  leveraged  that  they  did  not  have   capital  to  cover  their  debts  coming  due  and  would  cause  other  institutions  (the   counterparties  to  their  debts)  to  fail.  Federal  regulators  have  long  recognized  the  tension   between  their  simultaneous  commitments  to  market  discipline  and  avoiding  the  collateral   economic  damage  posed  by  systemic  risk.  Usually,  these  risks  have  been  framed  not  only  as   the  failure  of  financial  institutions  but  through  the  possibility  that  consumers  will  not  be   able  to  draw  on  credit  or  even  make  payments  using  electronic  payment  channels  on  which   everyday  transactions  depend.  When  justifying  the  government’s  intervention  in  2008,   Federal  Reserve  chairman  Ben  Bernanke  testified  to  the  House  Financial  Services   Committee,  when  it  first  considered  (and  rejected  TARP):     People  are  saying,  “Wall  Street,  what  does  it  have  to  do  with  me?”  That  is  the   way  they  are  thinking  about  it.  Unfortunately,  it  has  a  lot  to  do  with  them.  It   will  affect  their  company,  it  will  affect  their  job,  it  will  affect  their  economy.   That  affects  their  own  lives,  affects  their  ability  to  borrow  and  to  save  and  to   save  for  retirement  and  so  on”  (FCIC  2011:372).       Invocations  of  the  Too  Big  to  Fail  doctrine  in  the  financial  crisis  further  demonstrate  how   far  the  use  of  derivatives  in  the  housing  boom  mutated  from  their  original  purpose—no   longer  hedging  risk  but  exacerbating  it.  Rather  than  making  risk  “socially  disembodied  and   aggregated”  (LiPuma  and  Lee  2004:144)  as  derivatives  designers  once  believed,  the   144   financial  crisis  shows  how  spreading  around  risk  does  not  necessarily  lessen  it.  Instead,   spreading  around  risk  implicates  more  actors,  so  that  although  certain  actors  and  systems   were  to  blame,  everyone  became  an  unwitting  accomplice.     As  passed,  the  Emergency  Economic  Stabilization  Bill  of  2008,  better  known  as  the   bank  bailout,  authorized  the  U.S.  Treasury  Department  to  spend  up  to  $700  billion  ($395   billion  of  which  was  actually  used)  to  purchase  banks’  “toxic  assets,”  primarily  failing  pools   of  mortgage-­‐backed  securities,  under  the  Troubled  Assets  Relief  Program  (TARP).  Although   far  and  away  the  best  known  program,  TARP  was  only  one  of  two  dozen  emergency  lending   measures  taken  by  the  federal  government  in  2008  and  early  2009  to  stem  the  systemic   effects  of  the  financial  crisis.  TARP  was  not  even  the  largest  bailout  program—that   distinction  goes  to  the  Federal  Reserve’s  purchase  of  $1.25  trillion  in  GSE  mortgage-­‐backed   securities,  followed  closely  by  the  FDIC’s  (unused)  willingness  to  guarantee  all  senior-­‐level   risk  on  up  to  $939  billion  of  bank  debts  (FCIC  2011).  How  TARP  differs  from  these  myriad   other  programs  is  that  TARP  was  explicitly  linked  to  taxpayer  dollars  and  had  to  be   authorized  by  Congress  rather  than  through  tweaks  to  technocratic  programs.  In  its  final   version,  TARP  required  participating  banks  to  limit  executive  compensation  until  they  had   repaid  the  funds  and  “encouraged”  the  Treasury  Secretary  and  bailed-­‐out  lenders  to   participate  in  the  Bush  administration’s  HOPE  for  Homeowners  foreclosure  mitigation   program.  The  authorizing  bill  specified  that  all  assistance  to  homeowners  should  consider   the  financial  value  to  the  taxpayer  of  modifying  the  terms  of  loans  in  any  of  the  purchased   toxic  assets.  The  government  then  used  repaid  TARP  money  to  fund  its  Home  Affordable   Modification  Program  (HAMP),  discussed  below.  TARP  is  more  explicitly  linked  to  public   welfare  than  other  lending  programs  but  has  failed  to  obtain  legitimacy.  Regulators’  initial   145   framing  of  the  linked  problems  of  the  financial  crisis  and  mortgage  default  seemed  to   preordain  this  failure.  President  Bush’s  Treasury  Secretary,  Henry  Paulson,  former  chief   executive  of  Goldman  Sachs,  “maintained  a  distinction  between  'investing'  in  troubled   financial  institutions  and  'spending'  on  distressed  homeowners,  choosing  not  to  allocate   bailout  funds  for  rescue  efforts  directed  toward  homeowners"  (Fields,  Saegert,  and  Libman   2010:648,  citations  omitted).  At  best,  defenders  of  the  bailout  framed  it  as  a  necessary  evil   to  have  prevented  another  Great  Depression.  To  wit,  even  in  Bernanke’s  advocacy  for   passing  TARP,  he  prefaced  by  saying  “unfortunately”  Wall  Street—and  the  distress  its   practices  were  creating  in  the  housing  and  other  economic  sectors—has  a  lot  to  do  with  the   lives  of  regular  people.     Critics  affiliated  with  the  libertarian-­‐influenced  Tea  Party  and  anarchist-­‐inspired   Occupy  Wall  Street  alike  consider  the  bank  bailout  evidence  of  the  corruption  of  the  state’s   claims  to  moral  authority.  The  Tea  Party,  funded  with  large  donations  from  the  Koch   brothers  and  fronted  at  various  times  by  former  vice-­‐presidential  candidate  Sarah  Palin,   considered  the  bank  bailouts  an  overreach  of  big  government  into  the  rightful  domains  of   the  market.  Echoing  the  contours  of  Rick  Santelli’s  “rant”  on  CNBC  in  February  2009,  its   objections  to  the  bailout  focused  on  the  moral  hazard  that  bailouts  rewarded  reckless   behavior.  Rather  than  the  moral  hazard  argument  of  federal  regulators  that  they  will  be   coerced  into  rewarding  banks’  bad  behavior,  Tea  Party  critiques  of  the  bailouts  are  more   focused  on  the  mortgage  relief  provisions  and  fear  that  hard-­‐working,  responsible  people   will  be  “subsidizing  the  losers’  mortgages.”  When  the  Tea  Party  Express  came  to  Lansing  in   April  2010,  its  tour  bus  enumerated  the  group’s  demands  that  the  government  end  the   bailouts,  reduce  the  size  of  government,  stop  raising  taxes,  curtail  government  spending,   146   and  abandon  government-­‐provided  healthcare.  A  few  thousand  ralliers  came  from  around   the  state.  Echoing  the  Tea  Party’s  national  framing  of  the  bailout  issue  as  about   homeowners’  recklessness  rather  than  banks,  one  sign  proclaimed,  “The  American  Dream   is  not  a  handout.”       Occupy  Wall  Street—and  precursor  protest  movements  ranging  from  Bail  Out  the   People  movement  and  actions  by  diverse  labor  unions—have  tended  to  focus  their   critiques  on  the  dangers  of  rewarding  banks’  recklessness  and  the  state’s  failure  to  protect   citizens’  interests.  At  the  Showdown  in  Chicago  in  October  2009,  organized  by  the  Bail  Out   the  People  movement  to  coincide  with  the  American  Bankers  Association  annual  meeting,   large  Wild  West-­‐styled  “Wanted”  posters  sporting  mug  shots  of  bailed  out  banks’  CEOs   lined  the  hotel  ballroom  where  plenary  lectures  took  place.  The  Showdown  was  co-­‐ organized  by  the  Service  Employees  International  Union  and  National  People’s  Action,  a   direct  action  protest  organization  of  and  for  low-­‐income  city  residents  founded  in  1972.   The  three-­‐day  action  included  marches  on  branches  of  major  banks,  the  conference  hotel   where  the  American  Bankers  Association  hosted  its  business  meetings  and  a  “Roaring   ‘20s”-­‐themed  cocktail  party,  plenary  lectures  from  grassroots  organizers  against  predatory   lending,  and  remarks  by  FDIC  Chairwoman  Sheila  Bair  before  she  went  to  address  the   bankers’  association.  Bair  commended  the  activists  for  efforts  to  hold  banks  accountable,   called  for  the  end  of  the  TBTF  doctrine,  and  strongly  endorsed  the  proposal  to  create  a   Consumer  Finance  Protection  Agency.  The  Bail  Out  the  People  Movement  demanded  that   banks  take  actions  to  save  distressed  owners’  homes  and  that  the  federal  government   break  up  the  Too  Big  to  Fail  banks.   147     In  assessing  the  political  economy  of  the  bailout,  I  am  in  agreement  with  housing   economist  Robert  Shiller  that  “[t]he  essential  purpose  of  the  bailouts  should  not  be  to   maintain  high  values  in  the  housing  market,  the  stock  market,  or  any  other  speculative   market.  The  essential  purpose  is  to  prevent  a  fundamental  loss  of  economic  confidence  in   our  institutions  and  each  other,  and  to  maintain  a  sense  of  social  justice”  (Shiller   2008:111).  Despite  the  contentious  politics  of  the  bailout,  and  some  stern  rhetoric  about   banks  coming  from  administration  officials  (e.g.,  Bair,  Elizabeth  Warren,  president  Obama   at  times),  bank  impunity  has  increased  to  levels  unprecedented  since  the  1920s.  Big  banks   have  become  bigger  under  the  Obama  administration  and  no  bank  executive  has  been   brought  to  criminal  trial  for  fraud.  The  failure  of  the  administration  to  prosecute  any   bankers  for  criminal  misconduct  in  the  housing  bubble  contrasts  sharply  with  the  1980s   savings  and  loan  crisis,  after  which  hundreds  of  bank  officials  were  convicted  of  financial   crimes.  In  September  2012,  the  director  of  the  criminal  division  of  the  Justice  Department   explained  to  members  of  the  New  York  City  Bar  Association  that  before  deciding  to   prosecute  a  corporation,  he  weighs  the  “collateral  damage”  an  indictment  would  pose  to   the  company’s  shareholders,  employees,  and  the  market  as  a  whole:     I  have  heard  sober  predictions  that  a  company  or  bank  might  fail  if  we  indict,   that  innocent  employees  could  lose  their  jobs,  that  entire  industries  may  be   affected,  and  even  that  global  markets  will  feel  the  effects…Those  are  the   kinds  of  considerations  in  white  collar  crime  cases  that  literally  keep  me  up   at  night,  and  which  must  play  a  role  in  responsible  enforcement.  (Breuer   2012)       When  Breuer’s  remarks  were  widely  publicized  in  the  PBS  documentary  “The   Untouchables”  (Smith  2013),  Breuer  resigned  from  the  criminal  division.  Breuer’s   resignation  did  not  signal  a  fundamental  shift  in  attitude,  however.  In  March  2013,  attorney   general  Eric  Holder  testified  to  the  Senate  Judiciary  Committee  that     148   the  size  of  some  of  these  institutions  becomes  so  large  that  it  does  become   difficult  for  us  to  prosecute  them  when  we  are  hit  with  indications  that  if  we   do  prosecute—if  we  do  bring  a  criminal  charge—it  will  have  a  negative   impact  on  the  national  economy,  perhaps  even  the  world  economy.  I  think   that  is  a  function  of  the  fact  that  some  of  these  institutions  have  become  too   large.  (American  Banker  2013)       These  admissions  of  complicity,  even  when  tempered  by  the  admittedly  difficult  logistics  of   prosecution  or  anti-­‐trust  activity,  have  spawned  critique  from  observers,  journalists,  and   certain  senators  that  banks  have  become  “Too  Big  to  Jail.”58  The  bailouts  have  utterly  failed   their  social  purpose  and  only  magnified  the  public’s  sense  of  betrayal  and  alienation.   I  argued  in  chapter  1  that  crises  are  fundamentally  about  the  unknown.  As  long  as   institutions  remain  TBTF,  there  is  no  unknown  for  them.  This  is  not  exactly  a  no-­‐crisis   situation,  though.  The  potential  of  crisis  must  remain  immanent  in  a  financial  institution's   practices—it  must  be  both  big  enough  and  risky  enough  to  ensure  it  will  qualify  for  a   bailout.  In  the  next  section,  I  return  to  the  ways  these  macro  dynamics  play  out  in  the  lives   of  Michigan  homeowners  and  housing  counselors  who,  through  mortgage  modification   programs,  remain  in  a  conflicted,  uncertain,  but  necessary  relationship  with  organs  of  both   the  market  and  the  state.     Uncertainty:  Lenders  Work  With  You  “Like  the  Brick  Wall  Across  the  Street”   Mortgage  modifications  that  lower  borrowers’  monthly  payments  have  become  the   signature  policy  response  to  homeowners’  struggles.  President  Obama’s  Home  Affordable   Modification  Program  (HAMP),  which  is  in  turn  based  a  similar  FDIC  program  and  the  Bush                                                                                                                   58  For  example,  Senators  Chuck  Grassley  (R—Iowa),  Sherrod  Brown  (D—Ohio)  on  the   Senate  Judiciary  Committee,  and  Elizabeth  Warren  (D—Massachusetts)  on  the  Senate   Banking  Committee  have  critiqued  the  continuing  policy  of  TBTF  in  committee  hearings  in   February  and  March  2013.   149   administration’s  HOPE  for  Homeowners  program,  began  accepting  applications  in  June   2009.59  The  concern  in  both  the  FDIC  and  HAMP  programs  was  to  set  industry-­‐wide   benchmarks  and  instructions  for  how  to  structure  loan  modifications  that  offered   homeowners  lower  payments.  In  contrast,  traditional  loss  mitigation  programs  had  raised   monthly  payments  and  total  balances:  servicers  tended  to  add  the  arrears  and  fees  to  the   end  of  the  loan,  raising  its  total  cost.  HAMP  aims  to  reduce  a  homeowner’s  mortgage   payment  to  no  more  than  31%  of  the  household’s  gross  income,  usually  through  interest   rate  reductions  or,  much  less  often,  reducing  the  principal  owed  on  the  loan.  Interest  rates   can  be  as  low  as  2%  for  five  years,  then  increase  over  time  to  the  current  market  rate.  If  a   borrower  qualifies  for  the  Obama  program,  the  lender  can  achieve  the  payment  reduction   goals  either  through  a  refinance  (the  Home  Affordable  Refinance  Program,  HARP)  or  a  loan   modification  (Home  Affordable  Modification  Program,  HAMP).   Widely  critiqued  as  “anemic”  and  Kafkaesque  (SIGTARP  2010;  White  2010a;  also  see   Porter  2012;  Gans  2011),  the  program  does  not  legally  require  lenders  to  participate  unless   a  loan  is  owned  or  guaranteed  by  Fannie  Mae  or  Freddie  Mac,  or  if  an  institution  is  still  in   debt  to  the  Treasury  for  its  TARP  funds.  Instead,  modifications  are  voluntary  and  the   Treasury  Department  pays  servicers  an  incentive  for  each  HAMP  application  they  process.   As  of  May  2012,  HAMP  has  offered  just  over  1  million  permanent  modifications,  far  short  of   the  three  to  four  million  projected  by  the  Obama  administration.  While  the  program  did  set   up  a  simple  formula  for  modifications  that  is  premised  on  reducing  payments—instead  of                                                                                                                   59    The  FDIC’s  “mod  in  a  box”  program  was  introduced  in  November  2008  after  its  rescue   of  failing  IndyMac  bank.  Its  loan  modification  procedures  emphasized  lower  interest  rates,   lengthened  loan  terms,  and,  rarely,  principal  reduction.   http://www.fdic.gov/news/news/press/2008/pr08121.html   150   adding  arrearages  onto  the  back  end  of  the  loan—it  may  ultimately  be  another  instance  in   the  federal  government’s  foreclosure  prevention  initiatives  that  Fields,  Libman,  and   Saegert  argue  show  a  “pattern  of  repeated  inefficacy…[where]  Wall  Street  has  consistently   trumped  Main  Street  as  the  beneficiary  of  government  intervention”  (2010:  668).  The   administration  continues  to  tweak  the  program,  expanding  eligibility  criteria  and   increasing  the  incentives  paid  to  servicers  to  participate.   Servicers  pose  a  number  of  impediments  for  homeowners  seeking  a  modification.   These  include,  among  others,  (1)  that  it  is  costly  for  servicers  to  put  together  a  modification   offer;  (2)  servicers  do  not  want  to  offer  modifications  too  liberally  for  fear  that  it  will  incite   other  people  to  default  on  mortgages  they  can  afford  (the  “moral  hazard”  problem);  (3)   that  servicers  are  simply  overwhelmed  and  under-­‐staffed  to  deal  with  applications  for   relief;  and  (4)  that  negotiating  a  modification  must  be  in  the  financial  interest  of  the  loan’s   investors.60       Homeowners’  interactions  with  lenders  when  they  tried  to  negotiate  a  reduced   mortgage  payment  strain  their  loyalty  to  financial  institutions  they  believed  served  their   interests  and,  as  they  negotiated  under  the  auspices  of  state  or  federal  programs,  their   loyalty  to  public  institutions  as  well.  Distressed  homeowners  described  banks  and  loan   servicers  as  black  boxes  they  could  not  penetrate  either  through  reason  or  endurance.  The   most  persistent  feelings  expressed  by  homeowners  who  were  working  with  their  lenders   and  a  housing  counselor  were  uncertainty  and  frustration.  Homeowners  reported  that                                                                                                                   60  There  were  also  potential  legal  problems  with  securitized  loans  that  inhibit  servicers   from  acting—that  is,  a  modification  would  privilege  one  set  of  investors  at  the  expense  of   another  set  of  investors,  opening  the  servicer  up  for  lawsuits  from  the  losing  investors   (Immergluck  2009).  Because  of  the  scale  of  foreclosures  and  general  acceptance  of  the  loan   modification  model,  this  has  not  proved  to  be  a  serious  barrier.   151   before  coming  to  a  housing  counseling  agency,  they  often  called  their  lender  several  times  a   week  or  even  every  day  to  ask  for  reduced  payments,  a  repayment  plan,  or  to  check  on  the   status  of  their  request.  By  the  time  homeowners  even  began  negotiating  with  their  lenders,   they  were  often  many  months  behind—often  because  lenders  would  not  consider  helping   them  until  they  were  at  least  three  months  delinquent,  initiating  a  dangerous  game  that   also  began  the  foreclosure  proceeding  clock.   When  I  was  researching  foreclosure  intervention  in  2009  and  2010,  one  of   homeowners’  most  frequent  complaint  was  that  they  could  talk  to  the  same  person  twice.   Very  few  of  the  workers  supplied  their  last  names  to  callers,  nor  did  they  have  direct  phone   lines.  To  homeowners,  this  meant  retelling  their  story  over  and  over  to  anonymous  that   could  promise  them  options  that  did  not  exist,  could  not  be  enforced,  or  that  would  not  be   followed  up.  To  distressed  homeowners,  these  interactions  seemed  exquisitely  attuned  to   avoiding  accountability.  They  epitomized  a  bureaucratic  “rule  by  nobody”  (Arendt  1970)   and  the  “weirdly  agentless”  progression  of  financial  crisis  seemingly  without  and   sometimes  against  human  agency  (Crosthwaite  2012).     Odell  was  among  the  most  precise  homeowners  to  explain  the  automaton-­‐like   representatives  at  his  mortgage  servicer.  He  had  an  adjustable-­‐rate  loan  with  a  payment   that  had  increased  $252  (39  percent)  over  the  course  of  a  couple  of  years.  He  was  still   working  in  pest  control  but  was  trying  to  meet  his  payments  on  a  reduced  number  of   hours;  coupled  with  the  increased  payment,  he  had  fallen  behind  on  his  mortgage.  Odell   was  African  American  and,  after  coming  to  the  counseling  agency,  he  learned  that  his  loan   was  classified  as  predatory.  Odell  described  to  me  what  it  was  like  calling  his  lender  before   he  came  to  the  counseling  agency:  “Every  time  I  tried  to  contact  them,  tell  them  I  couldn't   152   afford  it,  they  said,  we'll  send  you  a  packet.  So  I'd  fill  out  the  packet  and  all  the  paperwork   that  they  wanted;  send  it  back.”  The  packet  he  referred  to  was  a  loss  mitigation  packet,  the   set  of  forms  and  financial  documents  homeowners  submit  to  qualify  for  options  like  a   forbearance  or  modification.  Most  often,  loss  mitigation  packets  require  proof  of  one’s   finances,  including  pay  stubs  and  old  tax  returns,  to  prove  a  current  inability  to  pay.   Homeowners  often  have  to  write  a  hardship  letter  detailing  in  narrative  form  the  reason   for  their  mortgage  difficulty  and  sometimes  swear  a  legal  affidavit  attesting  to  the  truth  of   their  hardship  claim.  Having  dealt  with  the  packet:   Then  it  was  hard  to  get  a  hold  of  the  person  that's  holding  your  file.  They'll   tell  you  one  thing  then  you  do  it.  Then  they'll  tell  you  another  thing  and  you   do  it.  And  then  you'll  weeks—three,  four  weeks—without  even  hearing  from   them.  Before  you  know  it,  you're  falling  farther  and  farther  behind  so  you  call   'em  and  you  talk  to  them  and  they  tell  you  the  exact  same  things  over  and   over  and  over.  Just  like  I  just  got  another  packet  from  them  and  they  want  me   to  fill  it  out  and  send  it  back.  I  don't  get  nowhere  with  them!       This  period  after  loss  mitigation  documents  are  submitted  was  one  of  the  most  obtuse  and   maddening  portions  of  the  housing  crisis.  Homeowners  I  met  during  this  research   consistently  reported  that,  whether  working  on  their  own  or  with  a  housing  counselor,  one   of  the  most  frustrating  aspects  was  having  to  submit  their  loss  mitigation  information,   which  includes  personally-­‐identified  and  sensitive  information—Social  Security  numbers,   bank  account  numbers,  loan  numbers,  tax  filings—over  and  over.  In  2010,  these  problems   were  rampant,  showing  up  not  only  with  homeowners  and  counselors  I  knew  in  Michigan,   but  in  media  accounts,  academic  research  (Fields,  Libman,  and  Saegert  2010),  government   oversight  reports  (e.g.,  SIGTARP  2010),  and  the  National  Mortgage  Settlement  between  the   five  largest  servicers  and  state  attorneys  general.     153   When  working  on  their  own,  the  only  recourse  homeowners  have  is  to  continue   calling  the  servicer  back.  As  Odell  explains:     I've  been  calling  them  twice  a  month  and  I  get  the  same  stuff.  And  they  just   sent  me  another  packet  with  the  same  information  that  they've  been  sending   me.  And  I  can  fill  it  out  and  give  it  right  back  to  them  and  I  will  not  hear   anything  from  them.  They  say  you've  got  to  wait  to  be  assigned  to   someone.61       The  “someone”  to  whom  he  referred  is  a  negotiator  who  works  in  a  mortgage  servicer’s   loss  mitigation  department.  Negotiators  have  specialized  training  in  loss  mitigation   options,  which  include  forbearances  and  loan  modifications  (which  I  discuss  further  in  the   next  chapter).  Because  of  their  training,  their  labor  is  more  expensive  than  customer   service  representatives;  the  greater  expense  of  loss  mitigation  staff  may  be  one  reason  that   loss  mitigation  departments  have  remained  woefully  understaffed  during  the  crisis.     At  an  outreach  event  for  homeowners  sponsored  by  the  HOPE  NOW  alliance  in   September  2010,  a  negotiator  for  a  major  mortgage  servicer  told  me  that  most  negotiators   had  caseloads  of  150-­‐200  homeowners  seeking  loan  modifications.  At  that  moment—two   weeks  before  the  robo-­‐signing  scandal  broke—the  caseload  of  200  was  a  major   improvement  over  the  300-­‐400  his  colleagues  had  experienced  before  they  began  “working   through  the  backlog”  in  earnest.  His  understanding  of  what  caused  the  backlog  was  not   only  the  high  demand  from  homeowners  for  mortgage  relief,  but  also  that  servicers  then   had  to  perform  full  underwriting  on  HAMP  trial  modifications.62  Before  June  2010,   servicers  could  process  someone  for  a  HAMP  trial  modification  without  full  documentation   or  underwriting  review,  meaning  that  a  homeowner  could  get  a  lower  temporary  payment                                                                                                                   61  Interview,  Odell,  July  29,  2010,  Lansing,  Michigan.   62  Interview,  Chris,  September  28,  2010,  Grand  Rapids,  Michigan.   154   without  proving  an  ability  to  sustain  that  payment  over  the  long  term.  This  was  one  factor   contributing  to  the  very  low  rate  of  trial  modifications  being  converted  to  permanent   modifications  during  HAMP’s  first  year.   In  October  2010,  major  media  outlets  revealed  that  the  largest  mortgage  servicers  in   the  country  had  been  “robo-­‐signing”  foreclosure  paperwork,  instead  of  having  staff   independently  verify  that  foreclosure  paperwork  was  accurate  and  legally  sound.  Instead,   mortgage  servicers  Ally  Financial/GMAC  Mortgage,  Bank  of  America,  Wells  Fargo,  JP   Morgan  Chase,  and  Citi  hired  subcontractors  that  signed  off  on  hundreds  or  thousands  of   foreclosure  orders  per  day  without  verifying  key  details  of  the  paperwork—for  example,   that  the  mortgage  servicer  had  legal  standing  to  foreclose,  rightfully  owned  the  debt,  that   the  homeowner  was  sufficiently  behind  to  be  subject  to  foreclosure,  or  was  not  involved  in   some  foreclosure  prevention  work-­‐out.  By  October  2010,  49  state  attorneys  general  (all   except  Oklahoma)  had  joined  a  class  action  lawsuit  against  the  five  mortgage  servicers  for   robo-­‐signing  and  other  failures,  such  as  lost  paperwork,  and  long  delays  and  missed   deadlines  in  the  loan  modification  process.  The  five  mortgage  servicers  settled  with  the   attorneys  general  in  February  2012  for  $25  billion.  The  settlement  required  $17  billion  in   direct  mortgage  relief,  though  servicers  were  able  to  claim  credit  for  modifications  they   had  already  offered.  Other  funds  were  divided  between  other  mortgage  relief,  such  as  $3   billion  for  refinancing;  direct  payments  to  foreclosed  homeowners;  and  funds  to  the  states   to  conduct  consumer  protection  activities.  Foreclosed  homeowners  were  eligible  to  file  a   claim  for  compensation  under  the  national  mortgage  settlement  without  having  to  prove   the  foreclosure  caused  financial  harm  or  was  specifically  flawed;  payments  might  be  as   high  as  $2,000,  depending  on  how  many  of  the  estimated  750,000  eligible  homeowners   155   filed  for  compensation.  Michigan’s  portion  of  the  attorneys  general  settlement  was  $97   million,  which  was  allocated  by  attorney  general  Bill  Schuette’s  office  as  follows:   • $25  million  for  blight  elimination  (demolition)  with  $10  million  for  Detroit   and  $15  million  the  rest  of  the  state;     • $20  million  in  funds  for  foreclosure  counseling  and  legal  services  (  $5  million   of  this  for  MSU  Extension);     • $15  million  in  homebuyer  assistance  with  special  programs  for  veterans;   • $5  million  for  the  Department  of  Veterans  and  Military  Affairs  to  assist   military  service  members  who  have  been  affected  by  foreclosure;   • $13.5  million  in  foreclosure  rescue  prosecution  and  restitution;   • $10  million  to  the  Department  of  Education  for  the  Achievement  Authority;   • $5  million  in  closing  cost  assistance  to  those  refinancing  under  HARP;  and   • $3.7  million  in  housing  and  community  development  funding.             When  I  conducted  most  of  this  fieldwork,  the  foreclosure  prevention  flaws  and   robo-­‐signing  covered  by  the  attorneys  general  settlement  were  rampant  and  unregulated.   The  internal  dynamics  of  mortgage  servicers  were  invisible  to  homeowners  petitioning  for   mortgage  modifications.  Homeowners’  experience  with  this  black  box,  as  Odell  described,   is  that:   So,  meantime  you're  getting  further  and  further  behind  and  by  the  time  you   do  speak  to  somebody,  they  say  there's  nothing  we  can  do.  That's  exactly   what  they  do.  …Then  you'll  call  them  again.  They'll  do  the  same  thing  again.   Or  you're  going  to  get  voicemail.  …It's  almost  like  you  get  the  same  people   156   telling  you  the  same  thing  and  it's  over  and  over  and  over.  That's...I  don't   know.  I  don't  know.63     The  impossibility  of  reaching  a  person  on  the  phone  or,  once  reaching  a  person,  the   impossibility  of  that  person  resolving  a  homeowner’s  application  seems  like  “rule  by   Nobody”  (Arendt  1970).  When  Hannah  Arendt  describes  bureaucracies,  she  means  “the   rule  of  an  intricate  system  of  bureaus  in  which  no  men,  neither  one  nor  the  best,  neither  the   few  nor  the  many,  can  be  held  responsible,  and  which  could  be  properly  called  rule  by   Nobody…clearly  the  most  tyrannical  of  all,  since  there  is  no  one  left  who  could  even  be   asked  to  answer  for  what  is  being  done”  (1970:38).  For  Arendt,   In  a  fully  developed  bureaucracy  there  is  nobody  left  with  whom  one  can   argue,  to  whom  one  can  present  grievances,  on  whom  the  pressures  of  power   can  be  exerted.  Bureaucracy  is  the  form  of  government  in  which  everybody  is   deprived  of  political  freedom,  of  the  power  to  act;  for  the  rule  by  Nobody  is   not  no-­‐rule,  and  where  all  are  equally  powerless  we  have  a  tyranny  without  a   tyrant  (1970:81).         Whereas  Arendt  is  most  concerned  with  the  form  of  the  rule  by  Nobody  state—she  is   concerned  with  the  “nobodies,”  I  build  from  that  concern  and  add  to  it  the  experience  of   being  subject  to  this  Nobody.  I  also  find  recent  works  on  anthropology  of  bureaucracies  as   a  “hope-­‐generating  machine”  (Nuijten  2003;  Hoag  2011)  compelling  for  thinking  through   homeowners’  contorted  optimism,  evinced  in  the  refrain  that  “you  do  what  you’ve  got  to   do.”     What  Nuijten’s  (2003)  analysis,  based  on  communal  land  claims  in  Mexico,  suggests   is  that  even  though  specific  bureaucracies  were  largely  ineffective  in  addressing  land   claims,  citizens’  periodic  success  continually  reinforced  the  idea  that  “the  state”  in  the   abstract  could  be  effective—and  therefore  citizens  invested  their  hopes  in  its  possibility.                                                                                                                   63  Interview,  Odell,  July  29,  2010,  Lansing,  Michigan.   157   Likewise,  with  flawed  loan  modification  processes,  distressed  homeowners  recognized  the   systemic  problems  but  were  too  overwhelmed  to  confront  them  in  an  active  way,  so  they   complied  with  a  flawed  set  of  processes  that  they  hated  and  in  spite  their  misgivings.   Homeowners’  aspirations  took  a  drubbing—through  job  loss,  downward  mobility,  their   good  faith  efforts  to  get  lower  house  payments.  Yet,  they  consent  over  and  over  to  wait   through  erratic  bureaucratic  processes  on  the  faith  that,  if  nothing  else,  that  as  long  as  they   are  waiting,  they  have  not  yet  been  denied.  Homeowners’  sacrifices  may  or  may  not  help   them  out  directly  but  these  individual  sacrifices  were  understood  to  be  communal   offerings,  too:  contributing  to  neighborhood  housing  values,  contributing  to  the  city’s  tax   rolls  (or  at  least  not  draining  them),  helping  reduce  banks’  losses,  preserve  the  financial   system,  and  trying  to  preserve  the  American  Dream.     There  is  another  kind  of  institutional  learning  happening  through  this  insecurity   that  I  want  to  highlight.  Anthropologists  have  long  been  concerned  with  un-­‐reifying  the   state  and  other  institutions  (e.g.,  Trouillot  2001),  especially  with  the  Foucauldian  turn   toward  the  micro-­‐politics  of  power  but  folk  narratives  largely  still  attribute  agency  to  an   institution  en  masse—as  in,  “they”  [government,  banks,  business,  corporations]  do  this   [XYZ  usually  nefarious  act]  or  “are”  [ABC  undesirable  trait].  In  spite  of  the  frequency  of   unsatisfying  and  routinized  calls  Odell  described  above,  it  was  also  common  for   homeowners  and  housing  counselors  to  learn  that  these  institutions  were  not,  in  fact,   monolithic.     Daniel  and  I  were  having  dinner  at  a  diner  near  his  home  in  South  Lansing.  Not  only   was  he  familiar  with  the  restaurant  as  a  patron  but,  as  a  long-­‐time  short-­‐order  cook,  he  was   intimately  familiar  with  the  work  at  this  kind  of  establishment.  I  sat  facing  the  counter  and   158   line  cooks  while  his  seat  offered  him  a  view  of  traffic  passing  on  Cedar  Street.  Daniel  was   one  of  the  lowest-­‐income  homeowners  I  interviewed.  “The  most  I  ever  made  in  my  life  was   $22,000.  That’s  the  most  I  ever  made  in  my  life.  I’ve  always  considered  myself  poor.  And   right  now  it’s  [not  even]  poor,  below  that.  [Just]  po’—we  can’t  afford  the  ‘or’  from  poor— we  can’t  afford  it.  Just  po’.”     About  ten  years  prior,  Daniel  had  bought  his  childhood  home  from  his  mother  when   she  entered  a  nursing  home.  It  was  important  to  him  not  to  have  his  mother  give  it  to  him   for  $1.  Instead,  he  found  honor  and  dignity  in  purchasing  it  from  her  for  its  fair  market   value  so  he  applied  for  a  traditional  mortgage.     From  day  one  I  screamed—on  day  one  I  walked  in  there,  I  told  the  lady  that  I   wanted  a  30-­‐year  fixed  rate  mortgage  done.  Well,  back  then  the  rates  were   way  low—they  were  like  record  lows  at  that  time…They  kept  me  outside   waiting  for  months.  I  know  what  the  bank  is  about,  (garbled).  Well,  I  figured,   why  are  you  keeping  me  outside  for  months.  And  so  meanwhile…when  I  got   to  the  table  to  sign—when  they  finally  did  get  me  to  the  table  to  sign  the   closing,  she  said,  ‘well,  we’ve  got  you  an  adjustable  low-­‐rate  mortgage.  And   you’ll  do  better  that  way.  I’m  like,  that’s  not  what  I  want.  I  told—but  at  this   time  they’d  kept  me  out  for  so  many  months,  I  just  wanted  my  mom  to  get   the  check  cut  so  her,  before  she  went  to  leave  the  world  or  something,  you   don’t  know.  It’d  been  so  long…already.  I’m  going,  “oh  just  sign  the  papers  and   I’ll  deal  with  this  bullshit  later,”  you  know.       When  he  went  to  the  closing,  he  discovered  that  the  broker  had  not  arranged  a  traditional,   30-­‐year  fixed  rate  mortgage  for  him,  as  he  had  wanted.  But,  with  his  mother  entering  the   nursing  home  and,  frustrated  by  the  delays,  he  accepted  the  adjustable  rate  mortgage  they   offered  him  for  the  sake  of  expediency.  In  general,  the  sales  pitch  that  brokers  made  to   borrowers  who  were  marginally  qualified  to  get  adjustable  rate  loans  was  that  by  making   their  payments,  they  would  build  a  good  credit  history  and  be  able  to  refinance  before  the   payment  reset.  But  they  were  sold  to  people  who  were  among  the  least  financially  educated   of  all  homeowners,  who  had  neither  the  ability  to  refinance,  nor  perhaps  the  wherewithal   159   when  the  time  came.  Soon,  too,  came  the  problem  that  their  houses  were  no  longer  worth   what  they  owed  and  so  could  not  be  refinanced  even  if  they  did  qualify.     I  find  Daniel’s  sense  that  he  could  “just  sign…and  deal  with  this  bullshit  later”   evocative  of  the  contorted  optimism  described  above,  as  well  as  his  future  eagerness,  on  his   counselor’s  advice,  to  search  for  a  minimum  wage  job  to  keep  his  house  out  of  foreclosure.   After  two  or  three  years  at  his  introductory,  teaser  payment  of  $418  a  month,  including   taxes  and  insurance,  his  payments  began  to  rise,  ultimately  reaching  $712  per  month—a  70   percent  increase.     When  I  met  Daniel,  he  had  been  out  of  work  18  months  since  the  business  he   worked  for  closed.  “And  on  day  one  I  called  Citi  Mortgage  to  notify  them.  And  at  that  time,  I   was  scared  stupid.  I  don’t  know  nothing  about  unemployment;  I  ain’t  been  on   unemployment  since  the  70s.”  Although  Daniel  contacted  his  lender  when  he  lost  his  job,  he   like  most  other  homeowners  who  later  sought  housing  counseling,  was  not  able  to   negotiate  a  sustainable  payment  on  his  own  (Jefferson  et  al  2012;  Fields,  Libman  and   Saegert  2010).  Like  so  many  other  Michigan  homeowners,  he  contacted  a  housing   counseling  agency  after  receiving  notice  of  their  services  in  his  14-­‐day  letter.  By  the  time  of   our  interview  he  had  applied  for  but  been  denied  a  loan  modification  because,  at  that  time,   major  servicers  would  not  consider  unemployment  benefits  a  source  of  income.64  I  asked   him  what  it  was  like  working  with  the  lender.  His  posture  was  relaxed  but  his  voice  quick   as  he  flicked  his  hand  up  to  point  across  the  road.  “Like  the  brick  wall  across  the  street.”  I   nodded,  expecting  that  to  be  the  end  of  his  comment—expecting  his  comment  to  echo                                                                                                                   64  At  other  times  in  my  research,  servicers  did  count  unemployment  benefits  as  a  source  of   income  but  only  if  a  homeowner  had  at  least  nine  months  of  benefits  left  at  the  time  of   applying  for  a  modification.     160   Odell’s  that  his  lender  is  unresponsive  and  impenetrable.  It  seemed  a  fair  and  conventional   analogy.  He  continued,  however:   Every  brick  is  different,  and  (garbled)  and  that  one  will  work  with  me.  The   last  conversation  I  had  involved  them  saying  to  me,  don’t  worry,  [you’re]  not   even  close  to  foreclosure.  Okay,  thank  you.  Hang  up.  Next  day  I  go  to  the   mailbox  and  there  was  the  letter.  So  don’t  worry,  huh?  Okay,  thank  you.  What   do  you  mean  don’t  worry?  Why  even  bother…but  that’s  just  the  way—I  was   very  shocked  to  get  that  letter,  very  shocked.  I  was  like  oh  no.  This  is  not   good.  This  is  not  good.  …And  every  time  I  talked  to  them,  it’s  like  a  brick  wall.   Every  brick  is  different.  So  many  cracks,  it  ain’t  funny.65     The  building  he  pointed  to  was  an  old  institutional  building  with  walls  of  dark  brick.   Framing  the  entrance  and  windows,  some  of  which  were  boarded  up,  were  lighter  insets  of   brick  and  stone.  Even  within  the  dark  brick,  it  was  possible  to  see  variegations  of  color  once   Daniel  pointed  to  them.  What  I  expected  to  hear  when  he  said  “like  a  brick  wall,”  having   heard  variations  on  the  theme  from  hundreds  of  other  homeowners,  was  that  the  lender   stonewalled  him.  And  while  this  was  an  important  aspect  of  relating  to  lenders,  Daniel  also   points  out  the  nuance  that  homeowners  and  housing  counselors  perceived  within  these   brick  walls.  In  this  section,  I  deal  with  the  dual  aspects  of  Daniel’s  comment—both  of  the   undifferentiated  “brick  wall”  or  stonewalling  experience,  and  of  the  nuance  within  lenders.     Daniel  learned,  as  did  many  other  homeowners  and  housing  counselors,  that  it  could   matter  tremendously  which  individual  you  reached  at  a  lender  or  mortgage  servicer.   During  Daniel’s  first  contact  with  the  lender,  a  representative  offered  him  lower  payments,   around  $500  per  month  but  Daniel  balked.  “I’m  like,  no  sir,  I  don’t  know  how  much  I’m   getting  from  the  whole  unemployment  thing—I  don’t  know  nothing  about  this.  He  said,  I   think  you  ought  to  do  this.  I  said,  I’m  disagreeing,  let  me  call  you  back  in  one  or  two  days.”                                                                                                                   65  Interview,  Daniel,  October  10,  2010,  Lansing,  Michigan.   161   Daniel  believed  that  he  was  being  prudent  to  not  commit  to  a  mortgage  payment  of  that   size  before  he  knew  what  income  he  would  receive  from  unemployment.  To  him,  this  was   proof  of  the  care  he  took  in  meeting  his  obligations  and  keeping  his  word.  “The  next  day  I   got  the  letter  saying  how  much  [unemployment]  I  get.  Okay,  I’m  ready  to  commit;  I  call  him   back,  and  don’t  get  him.  Lose  the  deal…we  can’t  do  that.  I’m  like,  what?”     Daniel’s  expectation,  revealed  by  saying  he  lost  the  offer  because  he  did  not  “get   him,”  was  that  he  had  a  specific  connection  to  that  employee  at  the  bank,  and  that  their   negotiation  bonded  them  together  through  time.66  It  is  a  schema  rooted  in  the  cultural   view  of  homeownership  that  relies  on  a  view  of  institutional  rationality  I  argue  we  should   question—a  point  I  return  to  in  the  conclusion.   Instead,  what  Daniel  experienced  was  that  the  lender  works  work  on  resolving  the   delinquency  from  multiple  angles:  collections  and  foreclosure  preparation  continue  at  the   same  time  the  loss  mitigation  department  weighs  the  merits  of  offering  a  loan  modification.   What  this  “dual  track”  means  is  that  a  homeowner  can  get  a  trial  modification  that  lowers   their  payments.  Simultaneously,  agents  in  other  departments  will  be  keeping  account  of   how  far  behind  those  lower  payments  put  the  homeowner.  For  example,  Odell’s  current   mortgage  payment  was  about  $900.  Supposing  he  got  a  trial  modification  of  $700  per   month,  that  would  create  a  shortfall  of  $200  per  month  until  the  lender  decided  either  to   recapitalize  that  amount  as  principal  or  forgive  the  debt.  Therefore,  someone  keeps  track   that  he  was  (for  example)  $5,000  behind  at  the  beginning  of  the  modification,  then  he                                                                                                                   66    It  has  long  been  a  demand  of  consumer  advocates,  including  the  Michigan  Foreclosure   Task  Force,  that  banks  assign  delinquent  homeowners  a  single  point  of  contact  to  reduce   the  problems  posed  by  having  multiple  representatives  responding  to  a  homeowner.  As  of   October  2012,  the  Consumer  Finance  Protection  Bureau  had  included  this  provision  in  its   proposed  mortgage  servicing  guidelines.  See  §  1024.40.     162   would  be  $5,200  behind,  $5,400  behind,  $5,600  behind  at  the  time  he  would  nominally  be   evaluated  for  conversion  to  a  permanent  modification.  These  arrears,  plus  any   recalibration  of  the  interest  rate,  are  ongoing  actuarial  tasks.  In  a  third  vein,  the  lenders’   agents  will  continue  to  proceed  toward  foreclosure  even  as  a  trial  modification  is  in   process,  so  that  if  Odell’s  loan  was  not  modified,  the  lender  would  lose  no  time  between   denying  the  modification  and  repossessing  the  house.       While  the  dual  track  seemed  rational  for  the  lender  on  one  hand—it  continues  to   follow  its  self-­‐perpetuating  logic  of  accounting  and  progress  (cf.  Crosthwaite  2012)—it  was   something  I  had  particular  difficulty  coming  to  grips  with.  How,  I  wondered,  are   homeowners  supposed  to  know  which  person  to  believe?  If  different  agents  at  the  same   entity  are  suggesting  different  courses  of  action,  how  can  one  be  sure  which  department  or   branch  trumps  another  or  says  something  contradictory?  How  can  homeowners  trust   institutions  they  feel  have  acted  ineptly  and  in  bad  faith  up  until  this  point?  Once  I  started   posing  these  questions  to  myself,  it  became  clear  that  what  was  at  stake  in  the  handling  of   mortgage  modifications  was  far  beyond  concerns  about  long-­‐term  affordability,   underwriting,  or  processing  delays.  Instead,  it  became  clear  that  the  handling  of   foreclosures  was  about  the  legitimacy  of  all  the  institutions  caught  up  in  responding  to  the   foreclosure  crisis:  nonprofits;  specific  departments  of  local,  state,  and  federal  government;   and  the  courts.67  Questions  of  institutional  trust  and  legitimacy  weigh  heavily  in  my  and   other  analysts’  interpretation  of  the  housing  crisis  (e.g.,  Ross  2009;  White  2010c).  The  loss   of  institutional  legitimacy—for  lenders  and  for  the  federal  government,  in  particular—is  to                                                                                                                   67  One  could  also  make  the  case  that  others  knowledge  producers  about  the  housing   market  also  became  suspect:  the  media,  real  estate  industry  professionals,  and  researchers.   163   blame  for  the  anti-­‐establishment  tenor  of  Great  Recession  politics  and  will  last  far  into  the   future.  There  may  even  be  a  generational  effect  as,  for  example,  historians  argue  that   experiences  of  home  loss  in  the  Great  Depression  sparked  particular  kinds  of  anxieties  and   defensive  politics  in  the  mid-­‐twentieth  century  (Sugrue  1996).     Daniel  felt  that  by  having  asked  for  time  to  mull  over  the  modified  payment,  he  lost   his  connection  to  an  opportunity  that,  in  retrospect,  might  have  helped  him  preserve  the   house.  But  it  was  Daniel’s  language  that  he  did  not  “get  him”  that  belied  the  belief  in  doing   business  with  another  person.  Instead,  what  probably  matters  more  is  the  time  lag.   Readers  who  have  been  pressured  for  any  sale  (a  car,  ballroom  dance  lessons,  a  gym   membership,  anything  sold  on  TV)  recognize  the  tried-­‐and-­‐true  strategy  of  the  “limited   time  offer.”  More  than  that,  though,  Daniel’s  interaction  also  signals  the  importance  of   temporality  to  finance.     Karen  Ho  (2009)  argues  that  fluidity,  instability,  and  rapid  change  are  central  to  the   daily  ethos  of  the  Wall  Street  banker.  She  argues  the  fluidity  of  the  Wall  Street  workplace  is   the  template  for  Wall  Street  to  remake  other  workplaces  in  its  own  image.  Mortgage   servicing  companies  very  often  are  Wall  Street  investment  banks  (or  their  subsidiaries)  so   it  is  easy  to  recognize  how  the  investment  bankers’  drive  toward  the  best,  up-­‐to-­‐the-­‐minute   bargains  would  penetrate  these  institutions’  mortgage  servicing  practices.  The  fact  that  it   matters  so  much  who  callers  get  on  the  phone  at  the  lender  also  belies  any  claim  that  these   are  rational-­‐bureaucratic  institutions.     For  homeowners  one  of  the  biggest  and  most  frustrating  revelations  was  that  banks’   decision-­‐making  process  was  not  clear-­‐cut  and  the  departments  were  not  filled  with   functionaries  that  perform  their  jobs  in  the  same  way.  Instead,  mortgage  servicers’   164   departments  were  chaotic  and  it  mattered  tremendously  who  they  reached  on  the  other   end  of  the  line.  The  experiences  of  homeowners  facing  foreclosure  were  rife  with   uncertainty  and  unpredictability  even  when—or,  more  accurately,  precisely  when—they   tried  to  prevent  it.  It  was  a  subjective  state  that  differs  radically  from  "the  control  over  the   living  environment  that  is  linked  to  positive  feelings  about  life  among  homeowners"   (Fields,  Libman,  and  Saegert  2010:662,  citing  Rohe,  Quercia  and  Van  Zandt  2007).       Financialized  Ownership   As  described  above,  homeowners  in  the  current  system  are  no  longer  in   relationships  with  their  bankers,  but  in  relationship—at  once  singular  and  infinitely   divisible—with  finance,  as  portions  of  their  lives  are  deployed  by  different  agents  for   different  purposes,  without  their  knowledge.  In  this  web  of  practices,  one’s  banker  is  just   one  actor  and  often  playing  a  bit  part.  Instead,  a  mortgage  contract  now  almost  always68   includes—in  increasing  distance  from  the  borrower—a  loan  officer  or  broker,  a  retail   lender,  a  wholesale  lender,  a  servicer,  a  securitizer,  and  an  investor(s).     Since  their  medieval  beginnings,  mortgages  have  been  a  tool  for  being  able  to   disaggregate  things  (e.g.,  property  ownership)  and  re-­‐aggregate  them  in  new  ways  (Maurer   2006).  That  is  not  the  surprise  here.  What  has  changed  is  the  speed,  and  scale  of   disaggregation  fueled  by  financialization.  As  Randy  Martin  argues,  financialized  ownership   is                                                                                                                     68  Nine  out  of  10  mortgages  are  sold  on  the  secondary  market.  Most  commonly  the   investor  is  the  Fannie  Mae  or  Freddie  Mac;  other  investors  may  be  the  bank  itself  (a   portfolio  loan)  or  private  investors—such  as  individuals  or  pension  funds.     165   thoroughly  spread  around,  [such  that]  far  more  can  partake  of  the  entitlements  of   others.  When  one  holds  a  security,  the  title  is  to  no  single  thing,  but  to  an  aggregate   of  ownership…Property  becomes  a  general  or  abstract  category  when  the   distinction  between  the  personal  and  commercial  is  blurred  (Martin  2002:141).       Taking  Martin’s  claim  seriously,  we  can  also  read  mortgage  investors  as  shareholders  to   homeowners’  lives  (Inc.).  As  Ho  (2009)  argues,  the  politics  of  shareholder  value  have  given   primacy  to  investors’  interests  over  any  other  constituency—in  this  case,  people  who  live   in  real  homes  in  real  communities  in  Michigan  (and  everywhere  else).     One  of  the  key  refrains  that  emerged  when  homeowners  applied  for  loan   modifications  was  the  question  of  “who’s  the  investor.”  “The  investor”  means  whatever  set   of  institutions  and  people  bought  the  mortgage  outright  or,  more  often,  shares  of  the  pool   of  mortgage-­‐backed  securities  to  which  one’s  loan  belongs.  When  a  homeowner  is  paying   her  mortgage  without  difficulty,  the  investor  is  invisible  and  unimportant  to  daily  life.   Mortgage  default,  though,  forces  these  relationships  to  become  visible  and  negotiated.  In   mortgage  default,  the  question  of  the  investor  matters  tremendously  at  a  practical  level.   And  it  opens  a  window  into  co-­‐existing,  sometimes-­‐conflicting  modes  of  ownership— ownership  of  physical  assets  and  financialized  ownership.  In  spite  of  general  awareness  of   mortgage-­‐purchasers  like  Fannie  Mae  and  Freddie  Mac  or  of  mortgage-­‐backed  securities,   Americans  including  those  I  met  in  this  project  have  an  abiding  attachment  to  the  notion   that  they  are  in  a  direct  relationship  to  their  banker—and  a  fair-­‐dealing  one  at  that.  It  is  not   so  different  from  Bill  Maurer’s  (2006)  finding  that  participants  in  the  Islamic  mortgage   industry  were  emotionally  invested  in  a  type  of  Islamic  mortgage  based  on  profit-­‐and-­‐loss   sharing,  even  though  it  had  never  been  used  in  the  United  States.      Hewing  closely  to  representations  I  encountered  in  the  field,  I  argue  that  mortgage   investors  are  magical,  and  best  exemplify  the  breakage  between  the  cultural  and   166   financialized  models  of  ownership  described  above:  Investors  are  magical  in  that  they  are   connected  to  the  occult  world  of  financial  technologies  (cf.  Appadurai  2012),  a  point  I   return  to  below.  When  homeowners  applied  for  loan  modifications,  investors  only   appeared  spectrally,  as  document  reams  and  electronic  “investor  guidelines”  filed  with  the   Securities  and  Exchange  Commission  delineating  how  the  pool  of  mortgage-­‐backed   securities  was  structured,  including  guidelines  for  how  much  flexibility  the  servicer  had  to   negotiate  new  terms.  As  an  aside,  defining  the  “best  interest”  of  an  investor  is  its  own   matter  of  contention.  The  constituent  actors  that  make  up  an  investor  (a)  do  not  always   have  interests  that  conflict  with  the  interests  of  homeowners;  or  (b)  do  not  always  agree   with  each  other,  structured  by  the  different  tranches.  What  investors  signify  is  the   breakage  because  in  the  space  of  mortgage  modifications,  they  are  specific  evidence  that   cultural  model  of  ownership—of  a  relationship  to  a  financial  institution  that  confers  social   capital—no  longer  obtains.  Let  me  briefly  describe  each  of  these  aspects  in  turn.   Housing  counselors—like  the  one  helping  Daniel  apply  for  a  modification—and   market  participants  described  the  secondary  mortgage  market  to  me  as  the  home  of  the   “investor  behind  the  scenes  where  all  the  intricacies  come  into  play.”69  To  demystify  this   market  was  the  charge  of  a  trainer  at  a  five-­‐day  workshop  I  attended  with  housing   counselors  from  across  Michigan  in  the  summer  of  2010.  The  trainer  showed  us  a  video,   “The  Crisis  of  Credit  Visualized”  by  a  multimedia  designer,  to  overview  the  credit  and   mortgage  markets.  The  video  showed  animated  stick  figures  against  a  green  backdrop.  In   the  section  called  “This  is  how  it  works”  about  the  securitization  of  mortgages,  the  narrator   explained  that  investors  with  a  glut  of  cash  were  looking  for  new  assets  in  which  to  sink                                                                                                                   69  Interview,  Carolyn,  July  29,  2010,  Wyandotte,  Michigan  (via  telephone).   167   their  money.  Investment  banks  bundled  thousands  of  mortgages  together  and,  on  this  pool   of  mortgages,  the  investment  banker  “sics  his  banker  wizards  on  it  to  work  their  financial   magic.”  Out  of  this  puff  cloud  of  magic  smoke  emerged  three  tranches  (tiers)  of  mortgage-­‐ backed  securities  with  different  levels  of  risk—which  the  video  labels  safe,  okay,  and  risky   (known  in  the  industry  as  AAA,  AA,  and  B).  Although  the  video  was  ostensibly  to  educate   counselors  about  this  market—and  though  the  video’s  tone  and  message  were  a  cheeky   critique  of  the  housing  bubble—in  this  application,  the  segment  trained  counselors  to   view—and  accept—these  financial  practices  as  unknowable.70     These  representations  accord  with  Appadurai’s  argument  that  financial  derivatives   are  instantiations  of  magic,  which  he  considers  “coercive  and  divinatory  performative   procedures”  (2011:527;  c.f.  Maurer  2002)—a  perspective  (like  commodity  fetishism,  e.g.,   LiPuma  and  Lee  2004)  to  which  I  am  sympathetic.  LiPuma  and  Lee  (2004)  argue  that   scholars  should  not  mistake  their  “surface  appearance”  of  financial  technologies  for  their   true  nature,  despite  financial  experts’  claim  that  derivatives  represent  an  underlying  reality   (“out  there”).  Their  argument  echoes  others  that  the  economy  is  a  social  construction  that   does  not  just  represent  reality  but  is  constituted  by  the  efforts  of  theorists  and  professionals   in  it  (Mitchell  2002,  1998;  Callon  2007;  MacKenzie  and  Millo  2003;  de  Goede  2005;  Holmes   2009).  Or,  in  LiPuma  and  Lee’s  (2004)  words,  derivatives  are  “quasi-­‐performative”  (60)  in   a  “sphere  of  circulation  that  they  simultaneously  presuppose  and  are  instrumental  in   creating”  (186).  Going  beyond  the  argument  for  performativity,  Appadurai  (2011)  builds   on  Weber’s  work  on  magic,  wherein  Weber  considered  magic  the  specific  cultural  barrier   to  developing  the  rationality  and  methodicality  required  for  modern  capitalism.  In  our                                                                                                                   70  I  thank  Rowenn  Kalman  for  drawing  my  attention  to  this  point.   168   social  scientific  and  cultural  canon,  then,  magic  is  (supposed  to  be)  antithetical  to  how   institutions  work.  Yet,  returning  to  Maurer’s  (2006)  analysis,  mortgages  are  not  purely   rational  but  continue  to  be  bound  up  in  supernatural  moralities.     When  I  asked  Daniel  why  he  thought  his  lender  acted  the  way  it  does,  he  confirmed   this  commonsense  view  about  functionaries  following  a  rational,  unfeeling  logic:    “It’s  an   institution…it’s  just  a  business…Whether  they  lose  or  win,  it’s  just  a  number…Our   guidelines  say  this.  Can’t  amend  it.  Can’t  move  it.”71  His  own  experience  of  the  bank’s   agents  as  all  being  different  was  an  exception  to  his  own  definition  but  not  a  big  enough   one  to  unsettle  the  premise.  In  the  social  science  literature,  it  is  rationality  and   predictability  that  enable  people  to  trust  institutions  for  transactions  where  they  are  at  a   disadvantage,  such  as  taking  out  a  mortgage  or  trying  to  modify  its  terms  (Ross  2009  citing   Giddens).  (This  is  why  the  revelation  that  lenders  purposefully  sold  customers  shady,   fatally  flawed  loans  was  so  shocking  to  those  homeowners  I  met  with  predatory  loans.  I   also  contend  this  is  the  raison  d’être  for  renewed  policy  interest  in  financial   literacy/education.)  In  short,  rationality  is  the  opposite  of  magic  and  it  enabled  the  growth   of  modern  capitalist  and  state  institutions.     I  want  to  shift  the  analysis  of  magic  away  from  derivatives’  calculative  ethos  and   onto  the  emotional,  cultural,  and  institutional  consequences  of  this  magic  as  seen  through   modification  programs.  To  do  so,  I  draw  on  Veena  Das’s  (2004)  work  on  state  power,   wherein  magic  has  four  salient  qualities:  First,  “magic  has  consequences  that  are   real...Second,  the  forces  mobilized  for  performance  of  magic  are  not  transparent.  Third,   magical  practices  are  closely  aligned  to  forces  of  danger  because  of  the  combination  of                                                                                                                   71  Interview,  Daniel,  October  8,  2010,  Lansing,  Michigan.   169   obscurity  and  power.  Finally,  to  engage  in  magic  is  to  place  oneself  in  a  position  of   vulnerability.”  (2004:226).  There  is  much  about  mortgage-­‐backed  securities  (and  other   financial  derivatives)  that  conform  to  this  definition  of  magic.  Although  derivatives  are   abstractions,  they  have  very  real  consequences—the  stake  here,  obviously,  is  losing  a   house.  Being  invisible,  socially  removed,  and  dense  are  key  to  the  way  derivatives  markets   work  (LiPuma  and  Lee  2004).     When  homeowners  like  Daniel—and  millions  of  others—seek  a  modification,  it   places  them  in  the  vulnerable  position  of  tangling  with  magical  powers.  Not  only  are  the   derivatives  behind  the  bank’s  walls  based  on  magical  models,  the  loan  modification  process   has  additional  occult  elements,  down  to  proprietary  formulas  for  determining  the  net   present  value  of  a  house  (Das’s  point  2).  As  I  argue  more  fully  in  the  next  section,   homeowners  experience  the  dangers  of  this  process  not  only  as  the  threat  of  losing  a  house   but  also  of  losing  an  existential  anchor,  their  sanity,  or  even  their  lives.72  They  feel  the   consequences  of  not  entering  this  realm,  though,  are  even  higher—because  even  though   there  is  much  at  risk,  the  modification  request  might  turn  out  very  favorably  (Das’s  points  1   &  3).  Although  my  research  focused  on  the  perspectives  of  homeowners  and  housing   counselors,  the  calculative  practices  of  lenders  also  place  investors,  financial  institutions,   and  the  financial  system  itself  at  risk.  Homeowners’  uncertainty  about  the  loan   modification  process  and  limited  agency  to  alter  the  outcome  attest  to  their  vulnerability   (Das’s  point  4).                                                                                                                     72  I  also  argue  that  some  homeowners  experience  home  loss—either  foreclosure  or   walking  away—as  spiritually  liberating.   170   In  the  housing  counseling  encounter,  the  “obscurity  and  power”  of  investors  are   their  defining  features.  As  Odell’s  story  earlier  in  this  chapter  showed,  after  distressed   homeowners  submit  their  packet,  the  servicer  assigns  someone  in  their  loss  mitigation   department  to  act  as  a  negotiator  between  the  homeowner,  servicer,  and  investor.   Homeowners  communicated  with  their  servicers  usually  weekly  or  sometimes  daily  when   they  are  seeking  a  modification.  For  their  part,  housing  counselors  confer  with  the  servicer   and  attorneys  for  the  foreclosing  lender,  but  never  any  actor  characterized  as  “the  investor”   or  its  representative.  The  disembodied  nature  of  the  investor  keeps  it  distant  and   unaccountable.  It  is  a  hyper-­‐mediated  relationship  of  debt  and  ownership.  The  investor   only  appears  in  housing  counseling  through  “investor  guidelines,”  many  hundreds  of  pages   of  documents  filed  with  the  Securities  and  Exchange  Commission  delineating  how  the  pool   of  mortgage-­‐backed  securities  is  structured,  including  guidelines  for  how  much  flexibility   the  servicer  has  to  negotiate  new  terms.  It  behooves  counselors  to  learn  about  different   investors—especially  the  big  ones  like  Fannie  Mae,  Freddie  Mac,  Deutsche  Bank,  Chase— because  they  have  different  eligibility  criteria.  This  holds  true  even  if  the  mortgage  servicer   is  the  same  and  it  participates  in  government  programs.     Donna,  a  retired  employee  of  the  state  of  Michigan,  came  to  the  counseling  agency   after  one  her  friends  received  a  loan  modification.  These  friends  lived  in  the  same   historically  African  American  neighborhood  on  the  west  side  of  Lansing.  As  in  so  many   other  communities  of  color,  the  west  side  had  been  targeted  by  a  lot  of  predatory  and   subprime  lending.  Both  Donna  and  her  friend’s  houses  had  been  subject  to  the  same  levels   of  foreclosure  and  price  decline.  They  had  the  same  national  lender  and  similar  mortgage   terms.  Donna  and  her  friend  experienced  their  housing  situations  as  identical,  though   171   Donna’s  friend  received  a  modification  within  a  few  months  of  applying  for  one.  As  of  the   last  time  I  heard  from  Donna,  she  had  been  working  with  a  housing  counselor  nearly  two   years  to  obtain  a  30-­‐year  fixed  rate  mortgage.  Her  counselor  explained  to  me  that  the   difference  between  Donna’s  case  and  her  friend’s  was  that  different  investors  own  the  loan.   Mortgage  derivatives  act  as  another  layer  of  landscape,  one  that  is  laid  over  but  does   not  perfectly  overlap  with  our  own  experience  of  the  world  around  us.  Housing  counselors   learned  the  most  reliable  ways  of  reading  the  investor  landscape—usually  looking  up  the   loan  number  on  the  website  of  the  Obama  administration’s  modification  program  or  sifting   through  SEC  filings  from  around  the  date  the  loan  was  originated.  The  identity  of  the   investor  is  not  disclosed  in  mortgage  closing  documents—because  of  the  highly  liquid   nature  of  financialization,  mortgages  may  be  sold  to  many  different  investors  over  the  life   of  the  loan—and  sometimes  the  mortgage  servicer  does  not  know  its  identity  (without   formal  investigation).  Therefore  the  most  common  ways  to  talk  to  their  clients  about   investors  is  basically  like  the  Wizard  of  Oz—a  great  unseen  power,  a  magical  force  “in  the   background.”  The  “investor  ultimately  has  to  agree,  even  if  [a  request]  qualifies  for  HAMP,”   because  it  may  not  be  in  its  best  interest.73     The  authority  given  to  investors  in  the  loan  modification  process  is  consistent  with  a   general  reading  of  power  relations  that  privileges  creditors  over  debtors  (cf.  Peebles  2010).   Because  investors  can  reject  modifications  that  qualify  for  government-­‐sponsored   programs,  this  shows  the  alignment  of  the  Treasury  Department  with  the  financialized   model  of  ownership  (which  should  not  surprise  us).  And  shows  again,  of  course,  the   prevalence  of  speculative,  circulatory  capital  in  contemporary  economies.  But  it  also  shows                                                                                                                   73  Fieldnotes,  April  12,  2010.   172   the  ultimate  dependence  of  the  circulatory  economy  on  the  real  economy—not  of   deterritorialized,  abstract  finance  and  abstract  risk,  but  of  its  ultimate  foundation  in  real   things  and  places.  What  I  want  to  suggest,  then,  is  not  that  the  foreclosure  crisis  introduces   something  new  about  the  repossession  of  houses,  but  rather  that  financialization  has   introduced  a  fundamental  shift  in  the  forms  and  meanings  of  ownership  and  belonging.  The   breach  of  contract  presented  by  mortgage  default  also  opens  a  breach  in  the  analytic  space   to  think  through  the  entanglements  of  finance,  the  state,  and  daily  life  for  understanding   the  unfolding  shift  in  the  meanings  and  substance  of  citizenship.     It  is  popular  for  consumer  advocates,  scholars  and  practitioners  alike,  to  call  on   financial  institutions  to  be  more  transparent,  to  let  us  see  behind  the  brick  wall.  The   assumptions  are  that  what  we’d  find  there  are  institutions  that  are  either  purposefully   acting  in  bad  faith  or  that  they  are  inept.  While  there  is  ample  evidence  that  both  those   forces  are  at  work—in  predatory  lending,  robo-­‐signing,  stonewalling  modifications—I   suggest  they  are  an  incomplete  explanation.  Through  the  cracks  opened  up  by  the   foreclosure  crisis,  we  see  that  financial  institutions  no  longer  work  in  the  way  we  (scholars,   regular  folks)  have  assumed.  Not  only  has  financialization  overturned  cultural  expectations   about  homeownership,  it  has  also  corrupted—in  the  normal  sense  as  well  as  in  twisted,   made  illegible—the  logic  of  institutions  themselves  (again,  see  Das  2004  and  Drexler   2008).     The  analytic  grip  I  suggest  we  get  from  approaching  these  institutions  as  magical  is   to  connect  the  compelling  body  of  work  on  financial  market  actors  to  the  effects  of  finance   “out  in  the  wild.”  Most  ethnographic  studies  of  finance  have  targeted  financial  traders,   whose  daily  practices  and  identities  are  developed  and  evaluated  with  specific  reference  to   173   the  instruments  and  logics  of  financial  markets  (Zaloom  2006;  Miyazaki  2006;  Hertz  1998;   Ho  2005),  and  the  practices  that  economic  experts  use  to  represent  the  economy  in   numbers  and  words  (Neiburg  2006;  Holmes  2009).  Ho  (2009)  found  that  Wall  Street   bankers  were  not  (always)  cynically  manipulating  potential  buyers  of  assets  destined  to  fail   but,  instead  Wall  Street  bankers  get  entranced  by  their  own  “hype”  about  clever  financial   wizardry  that  can  somehow  beat  the  market  it  itself  has  created.  By  taking  the  analysis  of   magic  in  financial  markets  seriously,  I  aim  to  narrow  the  gap  somewhat  between   arguments  that,  on  one  hand,  strongly-­‐identified  participants  in  financial  markets  (traders,   analysts,  executives)  are  caught  up  in  magical/religious  fervor  and  that,  on  the  other  hand,   consumers’  interactions  with  those  agencies  are  simply  instances  of  bad  faith  or   incompetence.  Doing  so  also  provides  the  benefit  of  complicating  the  agencies  and   practices  at  work  in  enormously  complex,  multi-­‐faceted  global  institutions  as  expressions   of  a  single  institutional  agency,  even  though  there  is  also  a  lot  of  evidence  of  malfeasance   (predation,  robo-­‐signing,  emails  admitting  that  MBS  pools  were  worthless).  Understanding   financial  institutions  as  having  complex,  contradictory  impulses  and  as  being  partially   opaque  even  to  themselves,  is  a  more  authentic,  if  not  simpler  starting  point  for  demanding   accountability.     According  to  a  prescient  analysis  of  financial  derivatives  by  LiPuma  and  Lee  (2004),   finance  endangers  the  foundations  of  democracy.  They  write  from  a  world-­‐systems   perspective  from  which  they  view  global  finance  as  both  deterritorialized  and  inherently   Northern.  Therefore,  they  argue  that  finance’s  effects  on  the  Global  South  appear  as   structural  adjustment  and  other  policies  of  immiseration  dictated  by  anonymous   international  financiers.     174   The  democratic  state  can  garner  consent  for  its  actions  only  on  the  condition   that  its  citizens  see  consent  as  legitimately  arising  from  the  people,  a   proposition  that  is  compromised  by  the  perception  that  the  state  is  organized   by,  and  responsive  to,  foreign  agents  and  institutions,  a  perception  that   seems  to  assume  an  almost  occult  form  when  the  external  power  boasts   nothing  but  an  electronic  address.  (178,  my  emphasis)     In  the  Global  South,  financial  crises  borne  of  structural  adjustment  threaten  the  working  of   democracy  and  therefore  the  legitimacy  of  the  nation-­‐state  as  the  arbiter  of  the  people’s   wellbeing.  In  such  cases  (e.g.,  Argentina,  Thailand,  Mexico),  the  state’s  legitimacy  is  lowered   because  of  its  inefficacy,  its  weakness  vis-­‐à-­‐vis  external  forces.     The  U.S.  crisis,  however,  is  one  not  of  anonymous  and  distant  financiers  but  other   members  of  the  nation-­‐state—predatory  lenders,  mainstream  financial  institutions,   investors  in  the  derivatives  market,  even  members  of  one’s  faith  community  or  own  family   (Strom  and  Greenbaum  n.d.).74  The  financial  and  housing  crises  since  2007,  then,  allow  for   an  analysis  of  what  happens  when  the  corruption  of  democratic  practice  by  finance  occurs   from  within  the  nation-­‐state  by  global  institutions  anchored  at  home.  Borders  are  not  what   alienates  the  public  from  the  interests  of  financiers.  Nor  is  geographic  distance  what   separates  Manhattan  from  foreclosure-­‐battered  places  like  Lansing,  or  even  Brooklyn.  The   questions  here  revolve  around  the  social  distance  between  finance  and  its  instruments.  By   instruments  I  do  not  mean  the  technical  tools  created  by  finance  but  those  places  and   people  instrumental  to  its  wealth  creation—the  fodder  for  financial  successes.       Issues  of  state  legitimacy  are  also  different  in  the  US  financial  crisis  (and  unfolding   euro-­‐zone  crises)  where  the  financial  institutions  are  anchored  at  home,  part  of  our                                                                                                                   74    The  parents  of  one  of  my  informants,  for  example,  were  defrauded  by  their   grandnephew  into  taking  out  a  fraudulent  mortgage  on  a  house  they  owned  debt-­‐free,   which  they  lost  to  foreclosure.  (Interview,  Beth,  June  25,  2010,  Lansing,  Michigan.)   175   imagined  political  economic  community.  While  the  state  sometimes  appears  effete  in   comparison  to  banks—in  no  small  part  because  of  the  defunding  and  disempowerment  of   its  regulatory  apparatus—the  state  also  emerges  as  complicit  with  banks  or  uninterested  in   the  public  welfare.  It  is  not  wholly,  then,  the  state’s  inefficacy  that  casts  its  legitimacy  into   question  but  its  very  will  to  claim  the  mantle  of  safeguarding  the  citizenry.  To  the  degree   the  impunity  of  financial  institutions  and  executives  were  hidden  before  by  secretive   working  of  derivatives  market,  the  bailout  and  subsequent  failure  to  prosecute  any   executives—indeed,  the  record  bonuses  of  executives  after  the  housing  market   implosion—lays  that  impunity  bare.     LiPuma  and  Lee  (2004)  continue  that  it  is  “anonymity,  the  cloak  of  distance  and   complexity,  [that]  suggests  that  there  is  no  way  for  local  forms  of  agency  to  influence  the   behavior  of  global  capital  markets”  (180).  People  I  interviewed—homeowners  facing   foreclosure  and  housing  counselors  who  deal  with  banks  all  day  long,  alike—seemed  to  feel   that  it  is  the  nakedness  of  the  state’s  allegiance  to  capital  that  makes  it  impossible  to   influence  the  workings  of  the  capital  markets.  It  was  not  the  hiddenness  but  the  bald-­‐faced   exposure  of  these  fealties  that  make  people  disillusioned  and  cynical  about  the  prospect  of   changing  the  state’s  relation  to  finance.  Too  Big  to  Fail  admits  the  state’s  complicity  with   big  capital—not  only  does  it  break  down  the  always-­‐amorphous  wall  between  states  and   markets  (c.f.  Mitchell  1991),  the  bailouts  are  the  ultimate  proof  of  the  political  problem   figured  as  moral  hazard.  Bailouts  give  financial  institutions  impunity  for  reckless  behavior   even  as  their  surface  relationship  may  be  conflicted  by  sporadic  state  prosecutions  or  calls   for  oversight—as  in  the  LIBOR  rate-­‐fixing  scandal  and  fines  to  HSBC  for  money  laundering,   to  name  but  two  post-­‐bailout  examples.  Homeowners  have  come  to  feel  that  when  their   176   interests  as  citizens  conflict  with  those  of  financiers,  that  the  government  would  “actively   aid  the  financial  practices  that  were  driving  them  from  their  homes  and  ruining  them   financially”  (Saegert,  Fields,  and  Libman  2009:310).  For  citizens  seeking  to  understand  the   state’s  “real”  allegiances,  the  bedrock  reality  of  Too  Big  to  Fail  is  difficult  to  reconcile  with   too  little,  too  late  penalties  for  malfeasance,  including  the  attorneys  general  settlement   with  mortgage  servicers  in  2011.     Among  the  distressed  homeowners  I  came  to  know,  Nate  and  Wendy  were   particularly  disturbed  by  what  they  considered  their  servicer  and  investors’  brazen,   corrupt  relation  to  the  Treasury  Department.  When  I  met  them  at  a  counseling  agency,  they   had  already  secured  a  loan  modification  from  their  original  servicer,  Saxon.  Since  August   2006,  Saxon  Capital  has  been  a  subsidiary  of  Morgan  Stanley.  The  investment  bank  bought   this  subprime  mortgage  servicer  to  "catch  up  with  rivals  that  have  bigger,  integrated   mortgage  businesses"  (Ho  2009:319,  citing  Reuters.com  2006).  From  Saxon,  Wendy  and   Nate  secured  a  modification  that  reduced  their  payment  from  $1100  to  $874.33.  This   modification  seems  to  have  offered  them  an  interest  rate  of  2%,  the  lowest  rate  possible   under  HAMP.  Theoretically,  that  would  have  begun  a  trial  modification  that  would  be   evaluated  for  conversion  to  a  permanent  one  after  three  months.  But  on  the  day  they  sent   in  their  paperwork  and  modified  payment,  they  got  a  letter  that  Saxon  had  sold  their  loan   to  another  servicer,  Ocwen.  "Oddly,”  Nate  intoned  in  mock  surprise,  “when  the  first  month's   modified  payment  was  due,  they  sold  it  to  Ocwen."  Ocwen,  too,  is  owned  by  Morgan   Stanley,  which  Nate  considered  a  conflict  of  interest.  The  company  accepted  their  May  and   June  payments  but  sent  back  their  July  and  August  ones.  When  they  came  to  meet  with   housing  counselor  Tami  in  September  2010,  Ocwen  listed  them  as  90  days  behind,  even   177   though  they  had  tried  to  send  in  their  payment  every  month.  The  servicer's  attorneys  gave   them  conflicting  information  about  paying—including  not  to  pay  anything  until  the   modification  acknowledgment  comes  through.  At  the  same  time,  they  had  three  statements   that  each  told  them  to  pay  a  different  amount.  As  Nate  and  Wendy  recounted  their   conspiracy  theory,  Tami  kept  her  head  bowed  over  their  statements,  trying  to  discern   which  partial  payments,  and  in  what  amounts,  had  been  diverted  to  the  escrow  account.   Her  mainstay  during  her  clients’  political  diatribes  was,  literally  and  figuratively,  to  keep   her  head  down.  When  Tami  had  parsed  the  statements,  she  raised  her  large  walled  eyes   from  the  statements  to  explain  that  the  couple  should  not  be  counted  behind  because   homeowners  receive  a  statutory  grace  period  when  their  loans  are  transferred  between   servicers.     Based  on  their  focus  groups  with  foreclosed  homeowners,  Fields,  Libman,  and   Saegert  (2010)  argue  that  "As  mortgages  are  bought  and  sold  communication  becomes   confusing  and  difficult  for  homeowners  because  'You  have  no  idea  who  you  end  up  with,'   suggesting  some  of  the  social  and  psychological  implications  bound  up  in  the  securitization   process  as  well  as  more  practical  concerns  about  navigating  loan  modifications"  (664).   Wendy  spent  a  lot  of  time  online  looking  into  the  companies—first  of  all,  finding  out  they're   both  owned  by  Morgan  Stanley.  "I  go  online  and  see  pages  of  complaints—all  the  same   thing,  [mortgages  transferring  from]  Saxon  to  Ocwen,"  she  recounted.  Nate  jumped  in,  "All   Saxon  to  Ocwen,  which  are  owned  by  the  same  company,  which  is  a  big  scam  if  you  ask   me."  Clearly  having  rehearsed  this  conversation  before,  Wendy  added  her  take  on  the   corruption  at  the  heart  of  this  sale—and  what  they  consider  the  illegitimate  accounting  of   178   them  as  delinquent.  "If  Saxon  got  payment  through  the  government  for  our  modification,   now  Ocwen's  going  to  get  paid  for  a  modification,  too."75     Wendy  and  Nate’s  immediate  problem  was  with  their  loan  servicer,  but  the  true   disturbance  for  them  was  the  presumed  actions  of  the  investment  bank  Morgan  Stanley,   owner  of  both  mortgage  servicers  and  one  of  the  highest-­‐volume  issuers  of  mortgage-­‐ backed  securities.  The  timing  of  their  mortgage’s  sale  struck  them  as  an  act  of  base   corruption.  Each  time  a  mortgage  servicer  processes  an  application  for  a  HAMP   modification,  it  is  paid  an  incentive  of  up  to  $800  by  the  Treasury  Department.  They   assumed,  therefore,  that  Morgan  Stanley  purposefully  sold  their  mortgage  to  another  one   of  its  subsidiaries  after  being  paid  for  one  HAMP  modification.  Returning  to  Das’s   framework  for  magic,  the  cloak-­‐and-­‐dagger  agency  Nate  and  Wendy  attribute  to  banks  in   this  episode  points  to  the  magical  “obscurity  and  power”  of  mortgage  debt   owners/securitizers.  The  real  consequences  of  this  transaction  were  to  put  in  question  the   couple’s  prior  loan  modification  (also  the  vulnerability  of  engaging  in  magic)  and  the   corruption  of  bank’s  dealings  with  homeowners  and  the  state—as  in,  defrauding  Treasury   for  a  second  HAMP  payment.       Nate  and  Wendy’s  suspicion  of  Morgan  Stanley  relies  on  a  vision  of  institutional   agency  that  may  not  be  warranted—there  may  not  be,  as  they  seemed  to  imply,  some   backroom  operation  at  Morgan  Stanley  so  finely  attuned  to  the  $800  earned  from  each   HAMP  application  as  to  time  the  transfer  of  mortgages  to  coincide  with  that  event.  Though   it  could  be  that  some  “quant”  programmed  the  system  to  identify  HAMP-­‐processed   mortgages  for  the  resale  pipeline:  revelations  about  computerized,  high-­‐volume  trading                                                                                                                   75  Fieldnotes,  September  20,  2010.   179   that  exploits  minute  volatilities  in  the  market  certainly  indicate  that  banks  have  this  kind  of   programming  capability  if  they  chose  to  do  so.  Frankly,  though,  I  do  not  know  whether   banks  were  purposefully  shifting  ownership  among  subsidiaries  to  extract  more  fees  and   neither  do  homeowners  speculating  about  these  trades.       Although  homeowners  understood  banks’  underlying  motive  as  pure  profit,  they   were  nevertheless  aghast  at  their  lack  of  morality  and  abuse  of  public  institutions.  John  and   Nicole,  whose  story  appeared  in  chapter  3,  disagreed  about  the  bank’s  reason  for  not  giving   them  a  definitive  answer  to  their  request.  Nicole  was  troubled  that,  “A  bank  would  rather   see  you  out  of  that  house—to  foreclose  on  you—than  work  with  you.  That's  so  frustrating.   I'm  like,  you'd  rather  have  this  house  sitting  here  and  getting  no  money  at  all  for  it—”  John   retorted  that  lenders,  especially  theirs  (Chase),  were  in  the  business  of  foreclosing  on   houses  rather  than  modifying  loans.  Based  on  a  news  article  he  had  recently  read,  he   summarized  bank’s  economic  incentives:  “They  get  the  insurance  money  on  the  loan,  then   they  resell  the  house.  That  way  when  they  sell  the  house  again,  it's  all  profit  again.”76  The   insurance  is  mortgage  insurance,  whether  offered  through  the  Federal  Housing   Administration  or  a  private  mortgage  insurer.77   In  one  sense  it  matters  profoundly  if,  in  fact,  Morgan  Stanley,  Citi,  and  other  banks   were  gaming  the  HAMP  system  this  way.  If  so,  the  only  way  to  restore  faith  is  to  prosecute                                                                                                                   76  Interview,  Nicole  and  John,  September  20,  2010,  Howell,  Michigan.   77    FHA  mortgage  insurance  is  credited  with  helping  millions  of  homeowners  obtain   mortgages  with  low  down  payments  since  1934.  FHA  insures  mortgages  to  low-­‐  and   moderate-­‐income  homeowners  who  make  as  little  as  a  3.5  percent  down  payment.  Private   mortgage  insurance  is  required  when  a  mortgage,  not  insured  by  FHA,  is  at  least  80  percent   of  the  purchase  price.  Many  mortgage  brokers  (including  mine)  helped  borrowers   circumvent  mortgage  insurance  by  having  them  obtain  a  home  equity  line  of  credit  as  a   second  mortgage.   180   this  malfeasance  or  change  the  incentive  structure  to,  for  example,  tie  it  to  the  loan  number   or  other  another  measure.  Another  insinuation  of  Nate  and  Wendy’s  experience  is  that  the   state  is  either  impotent  to  prevent  or  complicit  in  promoting  this  bilking  through  the  HAMP   program.  In  another  sense,  though,  the  truth-­‐value  of  either  claim  is  not  the  point;  instead,   the  point  is  the  radical  uncertainty  and  suspicion  that  characterized  homeowners’  every   interaction  with  these  institutions.     Distressed  homeowners  and  housing  counselors  interpreted  banks’  actions  as   evidence  of  a  profoundly  broken  social  contract.  The  professional  opinion  among  housing   counselors  was  that  credit  markets  are  deeply  important  for  their  clients  and  society  as  a   whole,  yet  creditors  were  undermining  everyone’s  best  interests.  During  her  intake   appointment  with  Mary,  who  was  in  danger  of  mortgage  default  and  in  deep  consumer   debt,  Tami  asked  if  Mary  had  tried  to  lower  the  interest  rate  on  her  credit  cards.  "Each   company  will  have  a  hardship  department,"  so  Mary  should  ask  for  a  lower  interest  rate.   "Unfortunately  because  of  the  economy,  credit  cards  are  changing  the  way  they  do   business.  It's  nuts  how  they  treat  people  and  it's  going  to  backfire  in  the  long  run."78  What   Tami  was  advocating  was  that  credit  card  companies  (and  other  creditors)  need  not  be  so   punitive  toward  people  but  to  be  more  flexible  and  have  more  of  a  social  contract  with   their  customers  so  they  will  remain  loyal.     What  homeowners  craved  was  to  be  able  to  trust  institutions  again  but  the  political   economy  of  the  bailout  made  that  seem  impossible.  Most  fervently  hoped  either  to  keep   their  current  house  or  buy  another  in  the  future.  They  understood  that  they  were  locked   into  relationships  with  finance  and  continued  to  consent  to  lopsided  bargains.  Like  many                                                                                                                   78  Fieldnotes,  August  9,  2010.   181   other  homeowners  I  talked  to  at  the  counseling  agencies,  Daniel  was  willing  to  lose  all  his   past  credibility  as  a  diligent  debtor  and  gamble  on  long  odds  that  neither  the  economy  nor   his  servicer  would  not  turn  against  him  again.  He  hoped  the  servicer  would   Put  whatever  you  say  I  am  in  default  to  you  on  the  backburner…we’d  be  starting   fresh.  I’ve  got  all  these  payments  I  ever  made  over  all  these  years,  never  count.   Start  fresh  today,  basically,  'cause  all  that  shit  rolls  over  to  interest  only.  You  still   owe  what  the  loan  is…But  I’m  willing  to  consent  to  that,  just  to  keep  it.79           Burawoy  (1979)  wrote  one  of  the  seminal  pieces  on  the  meanings  of  consent  in  the   deindustrializing  U.S.  He  argues  that  workers’  participation  in  the  life  of  the  shop  does  not   emerge  from  an  underlying  consensus;  consent  is  produced  as  people  engage  in  the  games   and  rules  of  the  shop  floor  (82)  and  that,  as  a  result  of  their  participation  in  the  game,  they   “then  proceed  to  defend  the  rules"  (93).       As  homeowners  performed  their  crisis  and  financial  citizenship,  they  were  compelled   to  play  the  game—they  do  not  overtly  resist  it—  but  did  not  defend  the  rules.  They   nevertheless  sought  coaches  and  trainers  (e.g.,  housing  counselors,  elected  officials)  to   improve  their  performance  in  this  high-­‐stakes  game,  strategies  to  which  I  turn  in  the  next   chapter.  In  extreme  cases,  when  homeowners  felt  that  lenders  have  broken  or  rigged  the   rules  of  the  social  contract  against  them,  they  sought  other  ways  out  of  their  entanglement   in  the  web  of  finance.     Narratives  of  Moral  Order  and  Visions  of  Escape     In  light  of  homeowners’  experiences  of  lenders  as  brick  walls—in  both  senses   discussed  here—it  is  easy  to  understand  their  feelings  of  despair  when  in  spite  of  their  best                                                                                                                   79  Interview,  Daniel,  October  8,  2010,  Lansing,  Michigan.   182   efforts  (including  in  some  cases  an  ability  to  afford  the  mortgage),  they  could  not  affect  the   outcome  of  their  mortgage  delinquency.  Borrowing  from  Crosthwaite  (2012),  their   personal  financial  crisis  had  shifted  outside  of  a  social  relation  and  into  a  weirdly  agentless   phenomenon.  Homeowners  felt  betrayed  and  angered  by  banks  and  other  financial   institutions  they  trusted  to  act  in  their  best  interest,  or  at  least  to  not  purposefully  harm   them  in  bald  pursuit  of  profit.  In  this  section,  I  examine  the  alternative  moral  stories   homeowners  and  housing  counselors  generated  when  lenders  have  abandoned  the  social   and  moral  obligations  inherent  in  debt  relations  (c.f.  Mauss  1990;  Peebles  2010).  Speakers   used  narratives  of  walking  away,  suicide,  and  redemption  to  imagine  (and  sometimes  act   on)  ways  out  when  lenders  were  not  cooperating  partners  during  a  difficult  time.  All   together,  they  are  moral  stories  that  relate  personal  experience  with  mortgage  default  to   critiques  of  corporations,  government  and  consumption.  Each  one  represents  a  way  of   giving  up  homeownership  through  homeowners’  agency,  albeit  of  a  constrained  type.       Walking  Away   In  2009  and  2010,  housing  counselors  working  on  behalf  of  a  homeowner  might   submit  the  application  and  supporting  documents  three,  four,  up  to  six  times  before  the   lender  acknowledged  it  (also  see  White  2010b).  Representatives  of  lenders,  such  as  an   attorney  I  met  at  a  mediation  meeting,  understood  this  to  be  encouraging—there  was  still   hope  for  a  resolution—even  if  the  administration  of  that  possibility  was  imperfect.  As   revealed  in  the  national  mortgage  servicer  settlement  with  attorneys  general,  these   practices  were  also  part  of  an  intentional  strategy  for  servicers  to  make  money  through  late   fees,  foreclosure,  or  by  pressuring  homeowners  into  less  affordable  in-­‐house  modifications   183   (Currier  2012).  At  one  point  in  my  research,  Tami  shared  a  rumor  with  me  that  the  fax   number  at  one  of  the  major  national  lenders  literally  went  to  one  central  fax  machine  and   from  there  the  print-­‐outs  were  sorted  and  distributed.  Whether  or  not  the  rumor  was  true,   it  was  a  useful  metaphor  for  describing  the  ineptitude  housing  counselors  encountered.   Counselors  were  used  to  the  delays  and  silences  they  find  with  some  of  cases  they   negotiate,  even  though  it  frustrated  them.  They  understood  that  banks  had  broad   discretion  in  interpreting  the  eligibility  guidelines  of  any  program  they  participated  in.  This   was  especially  true  for  those  housing  counselors  who  worked  at  lenders  before  coming  to   “the  other  end”  of  the  transaction.80     Carolyn  worked  in  wholesale  lending  for  18  years  before  losing  her  job  as  a  result  of  a   buy-­‐out  in  2007.  Her  experience  with  the  infrastructure  of  lending  made  her     more  tolerant  [than  other  housing  counselors]  of…what  servicers  and   lenders  are  going  through  to  try  to  retool.  This  is  a  major,  major  process  to  go   through  internally  as  far  as  reporting,  reorganizing.  No  wonder  lenders  are   taking  so  long  in  agreeing  to  participate:  the  manpower  alone,  the  monies  to   accomplish  this  process…Lenders  aren’t  built  this  way.81     Lender  departments  were  under-­‐staffed  and  over-­‐worked,  which  may  have  been  a  result  of   the  slow  process  of  change  Carolyn  described  or,  as  other  research  participants  and  recent   investigations  contend,  the  result  of  a  purposeful  strategy  to  stall  negotiating  with   homeowners—while  continuing  to  collect  payments  and  assign  late  fees.  The  result  of  this   stonewalling  may  be  that  owners  exhaust  all  their  resources  or  “walk  away”  from  the   house.  Distressed  homeowners  described  banks  and  loan  servicers  as  black  boxes  they                                                                                                                   80    Some  42%  of  housing  counselors  have  prior  experience  as  loan  officers,  mortgage   brokers,  realtors  or  financial  planners,  in  no  small  part  because  of  extensive  job  losses  in   those  sectors  in  the  bursting  of  the  housing  bubble  (Jefferson  et  al  2012).   81  Interview,  Carolyn,  July  29,  2010,  Wyandotte,  Michigan  (via  telephone).   184   could  not  penetrate  either  through  reason  or  endurance.  As  a  regular  presence  at  the   Franklin  Street  housing  counseling  agency,  I  learned  that  their  most  persistent  feelings   were  uncertainty  and  frustration.  Homeowners  in  distress  often  called  their  lenders   several  times  a  week  or  even  every  day  to  ask  for  reduced  payments,  a  repayment  plan,  or   to  check  on  the  status  of  their  request.  Homeowners  complained  that  they  could  talk  to  the   same  person  twice,  which  was  especially  likely  if  they  were  dealing  with  the  customer   service  department  rather  than  a  specialized  loss  mitigation  department  (Herbert  and   Turnham  2010;  Fields,  Libman,  and  Saegert  2010).  As  discussed  above,  for  homeowners,   these  interactions  seemed  exquisitely  attuned  to  avoiding  accountability.  Or,  as  Saegert,   Fields,  and  Libman  put  it,  they  felt  "anger  at  the  lack  of  oversight  and  accountability  for   financial  institutions  while  the  homeowner  [was]  constantly  harassed  to  be  accountable  in   multiple  ways"  (2009:310).  Indeed,  one  of  the  most  frequent  refrains  I  heard  answering   phone  calls  at  the  counseling  agency  and  in  interviews  was  that  banks  “don’t  want  to  work   with  people.”  Further  evidence  of  this  kind  of  stonewalling  can  be  found  in  the  $25  billion   settlement  of  the  five  largest  mortgage  servicers  with  state  attorneys  general  in  early  2012   for  lost  paperwork,  long  delays,  and  missed  deadlines  in  the  loan  modification  process.       Homeowners  facing  foreclosure  recounted  the  frustrations  of  dealing  with  their   lenders  as  evidence  of  deep  personal  affront,  and  a  combined  incompetence,  corruption,   and  moral  depravity  of  corporations,  all  adding  up  to  the  breakdown  of  the  social  order.   When  I  began  fieldwork,  Elaine,  a  white  woman  in  her  sixties,  had  already  been  working   with  a  housing  counselor  for  over  a  year.  Having  gotten  to  know  the  agency’s  staff  quite   well  during  this  time,  she  began  all  her  voicemails  with  a  bubbly,  “hello,  dearies!”  Once  she   called  to  tell  a  three-­‐minute  tale  about  her  mortgage  company  FedExing  her  documents   185   with  a  1-­‐900  number  that  was  not  the  mortgage  company  but  a  dating  hotline.  “Can  you   imagine?”  she  hooted.  “And  then  they  had  to  re-­‐FedEx  everyone  the  papers  with  the  real   number  and  an  apology  letter.  How  expensive  was  that?!  Just  thought  you’d  want  to  know   that!”  Months  later  I  answered  her  call  after  she  was  denied  a  loan  modification.  In  tears,   she  said,  “I  just  don’t  understand  how  they  can  do  this…now  I  understand  how  people  can   walk  away.  I  never  did  before.”82     In  this  kind  of  walking  away,  homeowners  feel  they  have  been  acting  in  good  faith   while  their  lender  has  not.  They  become  so  frustrated  by  the  uncertainty  that  they  give   up—or  at  least  consider  giving  up—negotiations  (also  see  White  2010a).  When   homeowners,  like  C.J.  and  Elaine,  feel  they  have  tried  every  resource  available  to  them,  they   feel  bitter  or  disillusioned,  no  longer  loyal  to  the  public  and  financial  institutions  that  made   them  model  homeowner-­‐citizens  (c.f.  Saegert,  Fields  and  Libman  2009;  White  2010b).  I   suggest  that  homeowners  who  walk  away  under  these  circumstances  do  so  because  they   feel  lenders  have  broken  the  social  terms  of  debt  relations.  According  to  a  recent  review   article  (Peebles  2010),  debts  are  relationships  that,  although  unequal,  are  supposed  to  be   mutually  beneficial.  Creditors  give  up  some  of  their  current  assets  in  exchange  for  future   returns;  debtors  have  the  long-­‐term  obligation  and  must  repay  more  than  they  borrowed,   but  they  get  access  to  resources  and  opportunities  they  would  not  otherwise  have.  It  may   be  hierarchical  but  is  not  entirely  one-­‐sided.  But  when—as  in  the  collections  process  or   denied  requests  for  assistance—creditors  are  felt  to  abuse  their  power,  both  the  creditors   and  the  debts  feel  illegitimate.  Homeowners  were  then  able  to  consider  breaking  their   promise  to  pay,  even  if  they  do  not  follow  through.  For  those  who  tried  to  salvage  their                                                                                                                   82  Fieldnotes,  May  17,  2010.   186   mortgage  but  failed,  this  is  different  than  strategic  default—where  homeowners  who  can   afford  their  payments  walk  away  because  it  is  in  their  best  financial  interest  (a  question  I   return  to  below).       Suicide  Stories     C.J.,  the  disabled  corrections  officer  whose  story  opened  this  dissertation,  confided  to   me  that  she  felt  so  depressed  by  her  circumstances  she  had  tried  to  overdose  on  her  pain   medications.  Even  though  she  had  attempted  suicide,  she  also  felt  that  “I  have  to  look  after   me  now.  So  wherever  that  takes  me,  if  it  takes  me  having  to  give  up  this  house—then  that’s   okay  now.”  Although  C.J.  was  the  only  person  to  discuss  suicide  directly  with  me,  distressed   homeowners  and  housing  counselors  recounted  stories  of  foreclosure-­‐motivated  suicides   to  demonstrate  how  distorted  banks’  morality  is—so  much  that  they  value  money  over   people’s  lives.  According  to  the  CDC,  there  is  some  indication  that  the  recession  has  caused   a  small  increase  in  suicides  but  only  one  study  so  far  has  pointed  to  home  loss  as  a  specific   motive  (Stack  and  Wasserman  2007).  However,  for  my  argument,  the  point  is  not  how   common  foreclosure-­‐motivated  suicides  are  but  the  broader  circulation  of  suicide  talk  and   its  use  for  framing  home  loss  and  retention  as  moral  issues.       Homeowners  mentioned  suicide  in  litanies  about  the  effects  of  the  foreclosure   crisis—along  with,  for  example,  reduced  municipal  tax  bases  and  rising  crime  in   neighborhoods  with  vacant  houses.  It  was  also  used  a  poignant  linkage  between  home  and   self—that  the  loss  of  the  home  becomes  tantamount  to  the  loss  of  life.  In  fieldnotes  after  an   early  conversation  with  Ruth,  an  elderly  white  widow,  I  recounted  a  story  she  told  me   about  a  friend’s  niece:   187   Four  days  before  trying  to  commit  suicide,  she  found  out  she  had  cancer.   That  same  week,  her  husband—who  like  her  had  lost  his  job  before  the   foreclosure  and  bankruptcy—filed  for  divorce  and  took  their  little  boy  with   him.  She’d  slashed  her  wrists  and  nearly  bled  to  death.83       For  this  woman,  like  C.J.,  foreclosure  would  have  come  after  a  protracted  series  of  losses   (c.f.  Stack  and  Wasserman  2007).  More  than  this  specific  case,  though,  Ruth  made  oblique   references  each  time  I  visited  or  called  her  to  news  stories  about  unnamed  senior  citizens   killing  themselves  because  of  the  fear  of  losing  their  house,  believing  they  had  no  other   resources  or  anywhere  else  to  turn.  She  and  her  son  considered  the  real  estate  bust  “a   sham  perpetuated  on  the  American  people  by  the  banks  and  the  mortgage  companies.”84   Under  these  circumstances,  talk  of  suicide  framed  banks  as  key  victimizers  of  already-­‐ vulnerable  people.       In  suicide  stories,  the  victims  were  implied  to  be  middle  class  or  of  the  stable  working   class,  those  who  are  “not  accustomed  to  asking  for  help.”  With  this  class  sensibility,   perhaps  it  was  actually  the  fear  of  becoming  homeless  that  motivated  some  to  take  their   lives,  as  suggested  by  Stack  and  Wasserman  (2007).  This  is  certainly  the  implication  in  a   California  news  article  about  a  man  who  torched  his  house,  murdered  his  wife,  then  killed   himself:     The  devastating  combination  of  unemployment  and  a  ballooning  adjustable-­‐ rate  mortgage  left  the  60-­‐year-­‐old  Cour  and  his  70-­‐year-­‐old  wife  in  a  very   dark  place.  The  five-­‐bedroom  house  was  in  foreclosure  and  the  couple  was   facing  eviction.  The  home  that  was  supposed  to  provide  shelter  and  security   could  provide  neither.  As  far  as  Cour  was  concerned,  he  was  out  in  the  cold   (Sign-­‐On  San  Diego,  January  7,  2011;  my  emphasis).85                                                                                                                     83  Fieldnotes,  April  10,  2010.   84  Ibid.   85    This  family  was  counseled  at  a  California  housing  agency  where  a  counselor  I   interviewed  worked  before  moving  to  Michigan.     188     The  recurring  theme  in  housing  counselors’  recollections  that  “they’ll  find  me  in  the  house”   asserts  one’s  identification  with  the  home  space.86    The  first  client  that  Juanita—the  loan   officer  turned  housing  counselor—discussed  with  me  was  a  woman  who  “threatens  to  just   hang  herself  in  the  house.”  When  I  asked  if  this  was  isolated  or  if  she  had  other  clients   threaten  to  kill  themselves,  she  responded,  “I’ve  had  three  or  four  like  that.”  She  was  far   from  alone  among  housing  counselors  I  met  in  this  project.  Most  counselors  I  interviewed   and  with  whom  I  attended  a  weeklong  training  had  clients  threaten  to  kill  themselves,   usually  specifically  mentioning  doing  it  in  the  house.  It  was  a  minority  of  clients,  but  a   memorable  one.  Counselors  tended  to  bring  up  suicidal  clients  in  high-­‐impact   conversations—such  as  early  discussions  with  me,  so  that  I  would  not  miss  this  fact  of  the   foreclosure  crisis,  or  in  public  forums  like  the  statewide  training.  But,  for  as  troubling  as  it   is,  Juanita  understood  suicide  talk  from  clients  as:     It’s  not  just  because  “oh,  my  house  is  in  foreclosure,  now  I’m  going  to  do   this”—it’s  because  of  the  lenders.  They  call  them  every  day  and  harass  them…   They  can  do  whatever  they  want,  say  whatever  they  want,  harass  as  much  as   they  want.  By  the  end,  [borrowers]  cry  a  river.  They  throw  up  their  hands.   “They  can  have  me  in  the  house  if  they  want.”  That’s  when  you  got  to  say,   look  there’s  better  things  out  there  besides  this  house.  By  the  time  you  talk  to   them…I  know  I’m  supposed  to  be  reporting  this  but  I  don’t  think  they’re   really  going  to  do  it.  By  the  time  you  finish  talking  to  them  they  just  feel  so   much  better.  You  can  tell  they’ve  got  a  big  smile  on  their  face.  These  lenders   just  play  so  many  games,  you  know.       Juanita  differentiated  this  kind  of  suicide  talk  from  talk  that  would  indicate  a  more  serious   threat,  the  kind  she  would  report.  This  talk  was  not  linked  to  any  potential  harm  but  is   understood  as  a  kind  of  habitual  speech  when  homeowners  have  no  other  tools  to  explain                                                                                                                   86  It  is  also  consonant  with  evidence  on  home  loss  and  suicide:  "Typically  suicidal  persons   committed  suicide  a  few  hours  before  they  would  have  been  forced  out  of  their  home"   (Stack  and  Wasserman  2007:108).   189   their  frustration.  It  imagines  a  final  act  of  dramatic  protest.  Like  homeowners’  assertions   that  they  understood  why  people  deface  or  gut  their  houses  before  eviction,  suicide  just   before  eviction  imagines  vengeance  on  the  conscience  of  the  bank’s  agents  and  the   reassertion  of  embittered,  desperate  agency.  It  is  agency  “in  negative  terms—as  the  power   to  withhold  consent,  for  example,  or  to  perform  their  resistance,  [or]  to  withdraw  some   part  of  their  productive  energy  from  what  they  see  as  ‘the  system’”  (Greenhouse  2010:9).   In  these  stories  of  despair,  suicide  is  imagined  as  the  ultimate  form  of  commentary,  a  final   protest.       There  were  two  strong  poles  in  the  ways  counselors  and  homeowners  talked  about   agents  of  mortgage  servicers.  On  one  hand,  the  delays  and  conflicting  information  they   encountered  led  them  to  talk  about  banks  as  disorganized,  as  having  no  idea  what  they  are   doing.  Another  way  of  talking  about  them  was  to  attribute  to  them  a  nefarious  agency— namely  to  decision-­‐makers  one  can  never  reach,  with  the  agents  they  actually  speak  to   usually  being  pawns  in  this  game-­‐playing.  In  suicide  stories,  lenders  are  ambiguously   positioned  between  these  poles.  Talk  about  foreclosure-­‐motivated  suicides  pointed  out  the   moral  gulf  around  lenders’  actions.  Further,  it  inverted  the  moral  hierarchy  that  portrays   homeowners  as  reckless  in  order  to  frame  them  more  thoroughly  as  victims  of  the  financial   system.       Strategic  Default  and  Other  Paths  to  Redemption   To  fail  to  maintain  the  mortgage  debt  is  to  fall  outside  normal  creditor-­‐debtor   relations  and  there  is  nothing  farther  from  that  norm  than  “strategic  default,”  one  of  the   most  widely  commented  and,  to  most  observers,  morally  unsettling  phenomena  of  this   190   housing  crisis.  Strategic  default  means  that  a  borrower  who  could  afford  the  monthly   mortgage  payments  chooses  to  stop  paying  because  the  house  is  undervalued  relative  to   what  she  or  he  owes  on  the  mortgage  note  (is  “underwater”).  Using  data  from  2009,  White   (2010c)  argues  that  even  though  one-­‐third  of  homeowners  were  underwater  on  their   mortgages,  the  strategic  default  rate  was  3%;  mortgage  default  was  much  more  closely  tied   to  the  unemployment  rate  than  the  rate  of  price  declines.  Much  cultural  work  has  been   geared  to  teaching  Americans  a  neoliberal  mindset,  which  is  to  evaluate  their  personal   decisions  with  a  degree  of  managerialism  and  using  cost-­‐benefit  analysis.  Yet  policymakers,   welfare  reformers,  and  others  have  long  mobilized  the  discourse  of  personal  responsibility   in  tandem  with  this  managerialism  (also  see  Immergluck  2009).  It  was  the  discourse  of   personal  responsibility  and  morality  that  most  often  held  homeowners  back  from  strategic   default,  even  when  it  might  be  in  their  best  financial  interest  (White  2010a,  2010c).     Corporations  use  strategic  default  and  bankruptcy  as  common  financial  tools  but   homeowners’  strategic  default  seems  shocking:  it  undermines  the  suite  of  moral  and   existential  sanctions  levied  on  foreclosed  homeowners,  especially  when  defaulters  publicly   claim  their  actions  do  not  induce  feelings  of  guilt  or  shame  but  that,  to  the  contrary,  the   feeling  is  one  of  liberation.  A  vocal  minority  does  just  that  in  media  outlets,  social  networks,   and  support  resources  (such  as  the  website  youwalkaway.com;  White  2010b).  Whereas   media  condemnations  have  framed  defaulters  as  immoral,  certain  defaulters  believed  it  to   be  the  moral  choice  to  continue  providing  well  for  one’s  family  (White  2010b).  One  family  I   interviewed  in  beleaguered  Flint  was  preparing  to  abandon  their  house  not  only  because  it   was  worth  one-­‐quarter  of  what  they  owed,  but  also  because  crime  had  risen  in  the   neighborhood.  Michael  grew  up  in  Flint  and  moved  back  to  the  area  as  an  adult,  bought  a   191   house  in  a  neighborhood  he  aspired  to  as  a  child,  and  opened  a  business  downtown  to   contribute  to  the  city’s  revitalization.  Because  of  his  and  his  wife’s  commitment  to  the  city,   they  were  plagued  with  guilt  over  walking  away  from  the  mortgage  and  from  the  city.   However,  with  an  18-­‐month  old  son,     Our  get  out  of  jail  free  card  is  we  heard  gunshots.  So  with  friends  when   they’re  like,  oh,  you  know,  you’re  leaving  your  house—we  can  say  we  heard   gunshots,  and  they’re  like,  ‘okay.’…[T]he  hardest  part  was  admitting  to   people  that  that’s  what  we  were  choosing  to  do.     Further,  Michael’s  wife,  Jackie,  like  other  strategic  defaulters,  believed  that  walking  away   corrects  the  moral  imbalance  where  corporations  can  “write  off  losses”  (that  is,  default  on   loans)  with  no  moral  baggage  whereas  consumers  were  punished  morally  and  financially   for  the  crisis  while  the  institutions  that  caused  it  are  not.  “There  is  that  point  of  the  banks   do  strategic  foreclosures  all  the  time.  Why  should  we  be  the  ones  who  get  the  moral  guilt   trip  to  stay  in  this  bad  investment  basically?  If  we’re  gonna  ruin  our  credit  and  have  to   rebuild  it,  let’s  start  it  now  instead  of  in  another  five  years  when  we’ve  sunk  that  much   more  money  into  it”87  (also  see  White  2010a,  2010c).       Often,  social  scientists  have  assumed  that  neoliberal  philosophy  necessarily  supports   global  capital  flows,  but  strategic  defaults  show  a  personal  neoliberal  ethic  that  does  not   have  to  coincide  with  the  larger  needs  of  capital.  Chiketa,  an  African  American  lawyer  who   contests  evictions  and  foreclosures,  explained  this  position  in  a  way  that  combined   neoliberal  and  humanistic  ethics.  She  argued  that  borrowers  need  to  understand  a   mortgage  as  a  business  transaction,  not  through  the  emotional  lens  consumers  have  been   trained  to  see  it  through.                                                                                                                     87  Interviews,  Michael  and  Jackie,  September  23,  2010,  Flint,  Michigan.   192   I  tell  people  to  just  treat  it  as  a  business  because…I  want  to  press  people  to   do  strategic  default.  Because  I  feel  like  we  should  all  take  the  emotion  out  of   it.  It’s  a  contract;  this  is  a  business  decision  that  you  made.  But  because   people  are  so  emotionally  tied  to  their  property  and  it’s  not  a  good  bargain.     She  argues  that  homeowners  should  unravel  the  central  link  of  the  twentieth-­‐century   American  dream—that  buying  a  house  is  the  material  representation  of  one’s  dreams:   [W]hen  they  sign  on  the  dotted  line,  it  almost  becomes  their  grave…  We  don’t   have  the  ability  to  just,  ‘you  know  what,  I’m  going  to  be  free  and  I’m  going  to   pack  up  and  I’m  gonna  go.’…So  then  you  start  accumulating  all  of  these   things,  trinkets,  stuff  you  don’t  need.  And  I  think  we  become  a  parasitic   consumer  versus,  say,  how  much  do  you  really  need?  (emphasis  added)     In  her  view,  this  liberated  people  to  pursue  passions  and  human  relationships.  Whereas  the   American  dream  in  large  part  links  fulfillment  to  consumption,  Chiketa  inverted  this   relationship;  for  her,  the  monthly  payments  and  inability  to  move  at  will  hindered  one’s   ability  to  dream  of  a  different  future.  Rather  than  being  about  fulfillment  of  desire,   consumption  mutates  into  a  parasitic  force.       In  transformation  stories,  narrators  link  their  material  loss  with  heightened  social   and  moral  commitment.  About  one-­‐quarter  of  homeowners  I  interviewed  expressed  some   kind  of  relief  about  giving  up  the  house,  whether  through  strategic  default,  foreclosure,   selling  it,  or  deeding  it  back  to  the  bank;  housing  counselors  echoed  these  sentiments  when   talking  about  their  clients.  These  expressions  ranged  from  C.J.’s  simple  acknowledgment   that  she  will  be  fine  if  she  has  to  leave  the  house  to  professions  that  the  economic  strain  is   good  for  the  family  because  it  reminds  them  to  “reprioritiz[e]  what’s  important.”88  The   narrators  contrasted  their  own  social  and  moral  commitments—to  their  families,  to   building  society,  to  pursuing  a  good  and  non-­‐materialistic  life—to  the  crass  drive  for  profit                                                                                                                   88  Interview,  Trisha,  September  30,  2010,  Adrian,  Michigan.   193   on  the  part  of  banks  and  contest  the  moral  double  standard  applied  to  consumers  and   businesses.  Home  loss-­‐as-­‐epiphany  also  gives  an  interesting  mirror  to  Margaret  Talbot’s   treatment  of  debt  porn  as  I  encountered  it  in  Brett  Williams’  work  (2004:51-­‐52).  Talbot   criticizes  the  narrative  arc  about  consumer  debt:  from  temptation  to  a  downward  spiral  of   addiction,  then  through  the  language  of  recovery.  This  narrative,  usually  applied  to  lower   income  and  people  of  color,  gives  middle-­‐  and  upper  class,  often  white,  observers  a  smug   sense  of  superiority  (ibid.).  It  implies  that  there  is  a  small  number  of  people,  a  “they,”  that  is   addicted  to  debt  and  consumption  while  there  is  a  “we”  reader  that  is  above  those   attachments.  Unlike  debt  porn,  the  transformed  homeowners  are  not  saying  that  there   were  a  few  people  who  are  addicted  to  debt  while  most  are  not;  instead,  they  argued  that   they  were  among  the  few  to  escape  from  the  cultural  addiction  to  debt  and  materialism.   While  they  ultimately  depended  on  finding  enough  resources  to  rebound,  home-­‐loss-­‐as-­‐ epiphany  allowed  middle-­‐  and  working-­‐class  people  talk  back  against  the  usual  hierarchies   of  debt  and  morality.     Walking  away,  suicide  stories,  and  the  emotional  freedom  found  in  giving  up  a  house   are  ways  to  search  for  the  meaning  and  reduce  the  pain  of  the  foreclosure  crisis  for   homeowners.  They  simultaneously  absorb  blame  and  challenge  dominant  narratives  that   moralize  against  homeowners,  by  depicting  the  crisis  as  one  manufactured  and  made   worse  by  the  actions  of  banks.  These  narratives  are  attempts  to  reclaim  homeowners’   agency,  a  sense  of  meaning  and  of  possibility;  ultimately,  though,  they  underscore   distressed  homeowners’  suffering  and  lenders’  intractability.  This  is  not  to  say  that  housing   professionals  and  homeowners  did  not  recognize  the  complexity  and  constraints  for  banks   to  handle  unprecedented  numbers  of  mortgage  delinquencies  and  foreclosures.  However,   194   revelations  such  as  those  in  the  2012  attorneys’  general  settlement  show  that  while  some   of  the  ineptitude  may  have  been  real,  some  was  feigned  in  the  service  of  minimizing  banks’   losses—that  is,  shifting  those  losses  onto  American  families,  neighborhoods  and   communities.  At  the  ground  level,  homeowners’  and  housing  professionals’  narratives   experimented  with  the  moral  order  in  ways  that  became  viable  when  banks  lost  credibility   as  social  actors.  Macro-­‐level  and  policy  responses  have  largely  failed  to  meet  the  anxieties   of  home  loss  discussed  in  this  chapter,  widening  a  gap  between  lived  experience  of  this   crisis  and  the  dominant  institutions  of  finance,  as  discussed  here,  and  the  state,  to  which  I   turn  in  the  next  chapter.   195   Chapter  5:  Foreclosure  Intervention:  State  Power  in  the  Great  Recession       Before  the  robo-­‐signing  scandal  broke,  mainstream  media  largely  characterized   defaulting  homeowners  as  either  greedy  individuals  speculating  on  their  homes  as   investments,  as  ignorant  people  who  deserve  to  be  foreclosed  for  agreeing  to  a  mortgage   they  did  not  understand,  or  as  freeloaders  looking  for  a  handout  in  the  form  of  a  loan   modification—none  of  which  is  a  particularly  appealing  position  to  identify  with   (Maskovsky  2010).  Media  outlets,  through  stories  and  comments  on  them,89  have  been   sites  for  writers  and  readers  to  debate  the  morality  of  both  borrowers  and  financial   institutions.  A  common  theme  reflected  moral  disgust  with  the  programs’  intended   beneficiaries:  “Where  do  these  people  get  this  sense  of  entitlement?”  (Lansing  State   Journal,  10  October  2010).  A  reader  posted  this  in  reference  to  Tyson,  a  white  man  in  his   late-­‐30s  who  had  been  unemployed  since  December  2008.  I  knew  Tyson  and  his  wife  Beth   fairly  well  by  the  time  this  article  was  published,  after  meeting  them  at  a  counseling  agency.   He  was  laid  off  from  his  job  as  a  programmer  at  General  Motors  after  he  completed  a   bachelor’s  degree  online.  Tyson  and  Beth  disagreed  about  what  kind  of  job  he  should  be   pursuing.  Should  he  look  for  relevant  jobs  in  his  field  in  order  to  stay  marketable?  Or   should  he,  as  Beth  argued,  accept  any  job  so  he  could  contribute  income  when  his  long-­‐ term  unemployment  benefits  ran  out?  He  was  one  of  the  more  than  5  million  Americans   classified  as  long-­‐term  unemployed  during  this  recession  (Ilg  2010).  The  tone  of  disgust                                                                                                                   89  Bird  (2010)  argues  that  anthropologists  have  been  reluctant  to  acknowledge  the  pivotal   role  of  journalism  in  framing  narratives  about  current  social  issues.  I  consider  the  comment   threads  on  news  articles  sites  for  producing  knowledge  and  public  discourse,  while   recognizing  their  idiosyncrasies  in  terms  of  access  and  the  motivations  of  those  who   participate.   196   deployed  against  homeowners  like  Tyson  seeking  loan  modifications  speaks  to  observers’   discomfort  with  the  evident  challenge  they  pose  to  the  American  moral  order  of   homeownership,  upward  mobility,  and  middle  class  sensibilities.  In  her  seminal  analysis  of   American  land  use,  Perin  writes  that  there  is  a  culturally  accepted  progression  of  tenure   from  renting  to  owning.  Using  Van  Gannep’s  stages  of  ritual,  she  argues  that  renters  are  a   transitional  category  and  therefore  dangerous  because  they  “have  the  power  to  redefine   those  now  safe  back  to  an  unsettled  status,  no  longer  one  that  can  be  taken  for  granted"   (1977:54-­‐55).  More  than  renters  in  a  majority  owner-­‐occupied  neighborhood,  owners   facing  foreclosure  threaten  the  stability  of  the  ownership  category  for  all.  They  present  a   visible  and  real  danger  of  slipping  back  against  the  culturally  sanctioned  progression  from   renting  to  owning.     Foreclosure  prevention  programs  aim  to  interrupt  this  “regression”  from  owning  to   renting  but  they  have  been  plagued  by  a  public  discourse  fixated  on  moral  hazard  (White   2010a:43-­‐50;  Fields,  Libman,  and  Saegert  2010:674).  In  economics,  moral  hazard  is  the   threat  that  people  will  take  more  risks  than  they  would  have  otherwise  if  they  have   insurance  or,  in  the  case  of  the  housing  bust,  a  government  bailout.  Homeowners  like  Tyson   were  the  target  of  comments  about  recklessness  and  entitlement  because  they  signified  the   moral  hazard  posed  by  loan  modification  programs.  Moral  hazard  then  became  a  way  to   enforce  moral  order.  The  effect  of  this  economic  commonsense  was  to  leave  intact  the   discourse  of  personal  responsibility  and  narrow  the  room  for  systemic  responsibility  and   solutions.  It  was  against  this  backdrop  that  homeowners,  housing  counselors,  and  activists   engaged  in  their  foreclosure  intervention  projects  I  discuss  in  this  chapter.  Whereas   chapter  4  discussed  the  muddying  of  boundaries  between  finance  and  the  state,  in  this   197   chapter  I  discuss  the  overlapping  missions  and  zones  of  authority  between  certain  state   agencies  and  non-­‐profit  housing  counseling  agencies,  and  in  different  state  functions.  This   chapter  is  divided  into  three  sections:  first,  a  discussion  of  homeowners’  total  help-­‐seeking   behaviors,  with  particular  emphasis  on  the  ways  they  sought  out  state  assistance.  Second,  I   examine  housing  counseling,  which  is,  in  conjunction  with  loan  modification  programs,  a   signature  strategy  for  governing  the  foreclosure  crisis.  Lastly,  I  present  a  case  study  of  one   family’s  foreclosure  to  highlight  the  limits  and  tensions  in  property  law,  and  the  state’s   allegiances  and  authority.       Betwixt  and  Between  State  Power   “Turning  Everywhere”   Every  homeowner  I  interviewed  was  relying  on,  or  had  sought  help  from,  multiple   public  and  private  resources,  conveying  the  sense  that  they  were  “turning  everywhere,   getting  nowhere”  (Fields,  Libman,  and  Saegert  2010).  For  those  homeowners  I  interviewed   and  got  to  know  through  their  housing  counseling  encounter,  I  have  reconstructed  the   timing  of  their  help-­‐seeking  activities;  the  range  of  supportive  resources  is  shown  in  Table   5.  In  coding  homeowners’  range  of  strategies,  I  included  not  only  direct  appeals  for  housing   assistance  (as  in,  to  mortgage  rescue  companies  or  counseling  agencies),  but  also  programs   that  would  ameliorate  the  root  economic  distress  that  caused  them  to  get  behind.  My   choice  parallels  Fields,  Libman,  and  Saegert’s  (2010)  finding  that  foreclosed  homeowners   had  two  foci  in  their  home-­‐saving  strategies:  First  was  to  address  the  financial  shortfall   directly  through  earning  more  money,  budgeting  more  tightly,  drawing  on  personal  and   social  resources  (e.g.,  welfare  office,  emergency  rescue  funds,  churches,  family).  Second,   198   distressed  homeowners  sought  to  manage  debt  and  prevent  foreclosure,  drawing  on   lenders,  nonprofit  housing  agencies,  and  social  welfare  agencies—however,  many  times   their  means  exceeded  the  eligibility  requirements.  And  as  Table  5  shows,  my  informants,   too,  had  to  navigate  a  "web  of  options"  that  included  the  eager—and  often  more   responsive—work  of  predators'  loan  rescue  scams  and  legitimate  help  from  nonprofits,  all   while  avoiding  help-­‐seeking  burnout.  It  is  also  clear  that  housing  counseling  is  only  one   myriad  resources  in  homeowners’  broader  help-­‐seeking  efforts.     Most  people  I  interviewed  first  sought  help  from  their  lenders  and  from  family  and   friends,  a  finding  echoed  in  other  research  (cf.  Freddie  Mac  and  Roper  Public  Affairs  2007;   Fields,  Libman,  and  Saegert  2010).  But,  failing  those,  government  resources  proved  to  be   the  bulwark  for  many  people  in  a  housing  crisis.  This  reliance  on  public  programs  held  true   across  political  affiliation,  race/ethnicity,  and  gender.  Nicole,  a  Republican-­‐leaning  political   independent,  worked  for  the  federal  Head  Start  program.  For  her  job,  she  helped  Head   Start-­‐eligible  families  apply  for  public  benefits.  Perhaps  because  of  her  professional   knowledge  of  public  assistance  programs,  her  family  drew  on  more  types  of  state  aid  than   any  other  homeowners  I  interviewed.  Aside  from  Nicole’s  two  part-­‐time  jobs  (for  Head   Start  and  as  a  hair  stylist)  and  John’s  two  part-­‐time  jobs,  their  largest  resources  were   unemployment  insurance  for  John,  state  health  insurance  and  free  lunches  at  school  for   their  two  sons,  and  Temporary  Assistance  for  Needy  Families  (TANF,  i.e.,  welfare).90     Over  and  over,  my  informants  bounced  back  and  forth  from  a  community  or  private   source  back  to  a  public  agency—as  in  approaching  the  lender  or  a  foreclosure  rescue                                                                                                                   90    John  had  also  been  on  leave  from  work  with  job  protection  under  the  Family  and   Medical  Leave  Act  (FMLA).  They  filed  chapter  7  bankruptcy  to  discharge  debts  and  sought   mortgage  relief  through  HAMP.     199   company  and  then  going  to  the  attorney  general  or  an  elected  official.  Yet,  it  is  crucial  to   note  that  in  the  early  year  of  the  housing  crisis,  the  steps  that  homeowners  took  and  the   order  in  which  they  took  them  had  little  bearing  on  their  ultimate  housing  outcome.  Among   their  88  foreclosed  focus  group  participants,  Fields,  Libman,  and  Saegert  (2010)  did  not   find  a  pattern  between  the  steps  homeowners  or  housing  professionals  took  and  the   outcomes  homeowners  received.  There  were,  moreover,  no  clear  steps  or  clear  procedure   when  they  collected  their  data  in  2006  that  homeowners  should  follow  to  resolve   delinquency.  As  I  discuss  in  more  detail  in  the  second  section  of  this  chapter,  several   interventions  by  2009  attempted,  but  largely  failed,  to  standardize  procedures  for   foreclosure  prevention.       200   Table 5. Help-Seeking by Homeowners Facing Foreclosure Government resource Non-governmental resource Unemployment insurance Mortgage lender or servicer Worker retraining program Housing counseling agency Attorney general For-profit mortgage rescue company Township government Courts: circuit, appellate, and bankruptcy Lawyers: privately retained and legal aid Newspaper (seeking publicity for their cases) Food stamps Food bank Mobile home park company (i.e., land owner) Social Security retirement Social Security disability Family Medical Leave Church Social service and community action programs Medicaid Realtor Medicare State children's health insurance program Websites Direct action activism School free lunch program HAMP Workers' compensation Family Independence Agency (e.g., welfare, TANF) County Treasurer Governor's office U.S. Congress representative FBI HUD     201   Homeowners  sought  guidance  and  intervention  from  elected  officials  and  law   enforcement,  particularly  in  cases  of  fraud  and  abuse.  Nikki,  a  Detroit  real  estate  agent,  had   tried  to  work  out  a  resolution  for  her  mother’s  mortgage  with  Countrywide,  the  largest   subprime  lender  in  the  country  before  Bank  of  America  bought  it.  Although  her  mother  fell   behind  on  her  rising  mortgage  payments  after  an  injury  requiring  several  surgeries,  the   family  had  the  resources  to  pay:  “we  could  come  up  with  money  and  they  didn’t  want  it.”   Besides  contacting  the  local  television  stations,  Nikki  “even  wrote  [U.S.  Speaker  of  the   House]  Nancy  Pelosi—just  whatever  would  work.  Contacting  senators,  congressmen— whoever  would  listen.  Unfortunately  the  one  that  was  over  our  district  [was]  not  willing  to   do  anything  to  help  us  at  that  time.”  Political  offices  told  her,  “It’s  not  a  matter  that  they   could  get  involved  in.  That  was  awful.  And  of  course  they  recanted  that  later,”  after  she   found  an  ally  in  Michigan  state  senator  Hansen  Clark  who  “did  what  he  could—made  a  few   phone  calls  and  things  of  that  nature.”91  The  most  important  connection  Clark  made  for   Nikki  was  to  the  Moratorium  NOW!  coalition  in  Detroit,  which  combines  legal  challenges   with  direct  action,  especially  demonstrations  at  banks  and  mortgagors’  homes.  Clark’s   referral  of  Nikki  to  community  resources  echoes  the  training  provided  by  the  Michigan   Foreclosure  Task  Force  to  state  legislators.  At  one  of  the  legislature’s  “lunch  and  learn”   events  in  February  2010,  the  Michigan  Foreclosure  Task  Force  and  counseling  agency  staff   from  western  Michigan  taught  approximately  100  legislative  staff  members  about  the  basic   trends  in  foreclosures,  its  causes,  and  about  the  promises  and  difficulties  of  the  90-­‐day  law   and  HAMP.  In  addition  to  equipping  staff  with  basic  tips  for  homeowners—“open  any  mail                                                                                                                   91  Interview,  Nikki,  October  20,  2010,  Detroit,  Michigan.   202   from  your  lender,  be  proactive”—the  task  force  was  compiling  a  list  of  housing  counseling   agencies  serving  each  Congressional  district,  to  give  staffers  a  quick  referral  source.       Phone  calls  to  elected  officials  and  law  enforcement  yielded  uneven  results,   however.  As  with  loan  modifications,  clear-­‐cut  cases  of  predatory  lending  and  abuse   enabled  more  direct  recourse  than  more  complex  instances  of  fraud.  Andre,  a  Hispanic   autoworker  who  was  laid  off  in  2006,  paid  $1500  to  U.S.  Mortgage  Funding  to  help  him   obtain  a  loan  modification.  He  believed  they  were  a  credible  operation.  “They  had  a  good   rating  on  the  Better  Business  Bureau.  They’ve  changed  their  ways,  apparently.”  To  his   dismay,  the  modification  the  company  promised  to  get  him  was  not  permanent  and  his   house  was  scheduled  for  a  sheriff  sale  by  the  time  I  met  him  at  Franklin  Street.  Andre   demanded  a  refund  and  complained  to  the  attorney  general’s  office  about  U.S.  Mortgage   Funding.  When  he  informed  the  company  of  his  pending  complaint,  U.S.  Mortgage  Funding   told  him  they  could  not  refund  his  money  and  stopped  taking  his  phone  calls.  Rather  than   creating  leverage  for  him,  Andre’s  recruitment  of  law  enforcement  thwarted  his  effort  for   restitution.92  Since  then,  U.S.  Mortgage  Funding  has  been  sued  by  the  Federal  Trade   Commission  as  part  of  its  “crackdown  on  scams  that  target  homeowners  who  are  behind  on   their  mortgages  or  facing  foreclosure.”93     Ruth,  too,  found  her  efforts  to  interest  state  officials  in  her  case  futile.  This  83-­‐year   old  white  woman  had  been  avidly  contacting  state  officials  for  two  years  before  I  met  her   and  her  son.  With  the  three  of  us  sitting  at  Ruth’s  dining  room  table  in  the  spring  of  2010,                                                                                                                   92  Interview,  Andre,  September  9,  2010,  East  Lansing,  Michigan.   93    Federal  Trade  Commission.  “FTC  Action  Leads  to  Ban  on  Alleged  Mortgage  Relief   Scammers  Who  Harmed  Thousands  of  Consumers.”   http://www.ftc.gov/opa/2012/02/usmortgage.shtm.  Accessed  March  30,  2013.   203   Sid  explained  hat,  “[M]om  and  myself  tried  to  reach  the  governor’s  office.  Well,  I  guess  they   give  you  a  lot  of  lip  service,  but…the  governor’s  office  was  saying,  well,  we’ll  get  back  to  you   and  months  go  by  and  they  wouldn’t  respond.”  They  were  distressed  by  politicians’   seeming  disinterest  or  ignorance  of  their  case  because  they  believed  it  to  symbolize  the   worst  kinds  of  predation  in  the  housing  bubble—mortgage  fraud  against  a  senior  citizen   who  had  invested  in  the  real  estate  market  to  earn  a  livelihood  after  being  widowed,  while   simultaneously  providing  decent  housing  to  other  members  of  her  community.  Ruth  had   bought  three  investment  properties  in  her  city  southeast  of  Lansing  and  took  out   mortgages  on  each,  plus  her  own  then  paid-­‐off  home,  through  a  mortgage  broker  who  was   subsequently  of  interest  to  the  FBI.  The  broker  qualified  her  for  the  mortgages  by   exaggerating  her  income.  Although  she  believed  she  was  getting  fixed-­‐rate  mortgages  at  8.5   percent  interest,  after  the  servicing  was  sold  for  the  second  time,  her  payment  increased   $72  per  month.  Several  of  her  payments  from  one  of  the  servicing  transitions  went  missing   or  were  misapplied  and,  with  the  payment  increasing  above  her  total  monthly  income,  she   fell  behind  and  had  lost  the  three  income  properties  to  foreclosure.  With  a  legal  aid   attorney,  she  was  working  to  maintain  her  primary  residence.  She  continued  to  contact  her   member  of  Congress  and  the  attorney  general’s  office  but  felt  their  engagement  with  her   was  superficial.  Almost  as  soon  as  I’d  sat  down  during  my  first  visit,  Ruth  was  sarcastically   intoning,     Oh  yeah,  they  [the  attorney  general’s  office]  were  gonna  get  a  class  action,   but  since  I  was  a  senior  citizen,  especially  he  wanted  to  get  a  senior  citizen   class  action  suit  going,  and  she  told  me  that  I  would  hear  back  from  them  in  a   couple  of  days,  so  I  waited  a  couple  of  days  and  I  called  back,  and  I  talked  to   her  again—the  same  girl,  supposedly—and  it  was  as  though  she  didn’t   remember  anything  about  our  conversation.  So  you  know,  I’ve  talked  to  a  lot   of  situations  where  when  I  would  call  back,  as  they  would  suggest,  you  know,   204   if  I  didn’t  hear  from  them  to  call  back  a  certain  time—and  it  was  almost  like   you  was  talking  to  a  stranger.94       Her  son,  Sid,  sympathized  with  the  demands  on  politicians’  and  their  staffers’  time,   yet  felt  intentionally  sidelined:     [W]hen  we  were  at  Congressman  [Mark]  Schauer’s  office,  they’ve  got  about  a   dozen  young  people  there  that  are  qualified  and  not  qualified  and  it’s  almost   like  you’ve  got  an  interference  group  trying  to  make  sure  that  you  really  can’t   get  to  the  person  you  need  to  talk  to…I  think  they’re  trying,  in  their  own  way,   but  like  with  the  foreclosure  thing,  I  think  it’s  too  big  an  issue  and  they’re  not   really  putting  enough  time  into  it.       Ultimately,  in  the  broader  picture—and  in  spite  of  a  “minority”  of  “good  people”  in  politics,   he  concluded  that  “our  politicians  are  in  their  [banks’]  pocket.”  Fields,  Libman,  and   Saegert’s  informants,  too,  lost  faith  in  the  government  because  of  its  patent  fealty  to  banks,   which  they  expressed  as  the  belief  that  "our  government  won't  let  us  get  out  of  debt"   (2010:664).     Sid  continued,  leaning  back  in  his  chair,  arms  crossed,  with  a  philosophical  air:     “[Y]ou  know,  on  a  political  season  when  our  politicians  come  and  they  say  we  want  your   vote—the  rest  of  the  time  they  could  care  less  to  talk  to  people  it  seems  like.  But  they  want   your  all  mighty  vote,  or  they  claim  that  it’s  important.”  His  feelings  echoed  a  common   cynicism  not  just  among  my  informants  but  in  the  broader  news  cycle,  especially  since   members  of  Congress  were  campaigning  for  the  midterm  elections  at  the  time.  “But  then   when  you  need  help  in  return,  I  think  they’re  bought—so  many  of  them  had  said  the   statement—but  I  think  they’re  bought  and  sold  by  banks.”95  Sid  echoed  the  disillusionment   of  other  homeowners  in  this  study,  such  as  C.J.,  whose  story  opened  chapter  1,  who  felt  that                                                                                                                   94  Interview,  Ruth  and  Sid,  April  15,  2010,  Jackson,  Michigan.   95  Ibid.   205   she  had  voted  for  Democrats  in  power  who  had  duped  her  into  believing  she  would  get  a   loan  modification.  This  belief  is  one  with  which  Senator  Dick  Durbin  of  Illinois  infamously   agreed  on  a  radio  show  in  2009.  The  Senate  had  been  on  the  verge  of  passing  a  bankruptcy   reform  provision  that  would  have  allowed  Chapter  13  bankruptcy  trustees  to  renegotiate   (“cramdown”)  mortgages,  but  that  was  narrowly  defeated  because  of  strident  bank   lobbying.96     Homeowners  sought  out  public  agencies  to  be  effective  and  protective  even  as  they   held  that  in  tension  with  beliefs  about  the  state  as  being  deeply  corrupt  or  complicit  with   banks,  as  discussed  here  and  in  chapter  4.  Distressed  homeowners  clearly  recognized  the   state  as  multitudinous,  flawed,  and  even  contradictory.  Recurrent  pleas  and  demands  for   intervention  show  a  faith  in  the  ideal  of  the  state,  if  not  one’s  actual  experience  with  it  (c.f.   Poole  2004).       Being  Seen  Like  a  State   Michigan’s  state  government  became  very  visible  in  the  response  to  the  housing   crash  when  politicians  set  up  the  “Save  the  Dream”  campaign  through  MSHDA,  a  campaign   that  presented  public  service  announcements  endorsing  non-­‐profit  counselors  and  urging   homeowners  to  take  advantage  of  the  90-­‐day  law  and  other  services.  Although  sympathetic   to  distressed  homeowners,  its  message  placed  heavy  burdens  on  owners  facing  foreclosure,   suggesting  their  actions  threatened  the  stability  not  only  of  their  families  but  also  the                                                                                                                   96  At  a  recent  panel,  the  director  of  the  Center  for  Responsible  Lending  argued  that  banks   had  been  on  the  verge  of  accepting  reform  until  a  Republican  senator  told  the  industry’s   lobbyists  “not  to  come  asking  them  for  favors”  in  the  future  if  they  rolled  over  on   bankruptcy  reform  (Calhoun  2013).     206   whole  political,  economic,  and  moral  order  of  the  American  dream.  “Overnight,  Granholm   made  us  all  foreclosure  experts,”  one  former  counselor  recalled  about  the  governor’s  public   service  announcements  in  2009.97  Without  any  further  training  in  foreclosure  intervention   counseling,  the  governor  made  a  performative  statement  that  endowed  counselors  with   state-­‐sanctioned  expertise.     Housing  counselors,  MSHDA  staff,  and  other  housing  professionals  (county   treasurer  staff,  the  Michigan  Foreclosure  Task  Force),  in  collaboration  with  political  allies,   sought  judicious  ways  to  insert  consumer  protections  into  the  foreclosure  crisis  without   fundamentally  disturbing  creditor-­‐debtor  relations.  Michigan’s  housing  professionals  have   achieved  some  remarkable  successes,  chiefly  securing  the  passage  of  the  90-­‐day  law,   preserving  the  state’s  6-­‐month  redemption  period  in  the  face  of  legislative  challenges  to  it,   and  creating,  with  the  state’s  federal  Hardest-­‐Hit  funds,  a  central  online  portal  for  loan   modification  applications  to  every  major  servicer  in  the  country   (https://www.stepforwardmichigan.org/).     The  press  release  about  the  governor’s  “Save  the  Dream”  campaign  that  was  run   through  MSHDA,  described  the  agency  as  “a  quasi-­‐state  agency  that  provides  financial  and   technical  assistance  through  public  and  private  partnerships  to  create  and  preserve  safe   and  decent  affordable  housing,  engage  in  community  economic  development  activities,  and   address  homeless  issues.”98  MSHDA’s  employees  firmly  identified  themselves  as  public   servants,  though  the  agency’s  public  presentation  is  productively  distant  from  the  state.                                                                                                                   97  Interview,  Adrian,  April  14,  2011,  Lansing,  Michigan.   98  “Governor  Granholm  Signs  Legislation  To  Help  Citizens  With  Mortgage  Foreclosure”:   http://www.michigan.gov/mshda/0,1607,7-­‐141-­‐7559_9637-­‐188859-­‐-­‐,00.html.     207   Like  other  states  and  state  agencies,  MSHDA’s  own  actions  try  to  render  it  legible  but   simultaneously  made  it  illegible  in  other  ways  (cf.  Das  2004;  Poole  2004).  Participants  in   this  industry  understood  their  legitimacy  to  be  twofold:  on  one  hand,  they  gained   legitimacy  through  their  background  relationship  with  the  state.  On  the  other  hand,  they   gained  legitimacy  by  distancing  themselves  from  what  has  been  politically  discredited  as   the  state’s  inherent  paternalism.     One  state  employee  explained  that  MSHDA,  “get[s]  recognition  from  politicians  and   financial  institutions  for  MSHDA  counselors.  It  has  a  positive  impact  on  clients…Being   certified  lends  credibility.”99  At  the  same  time  the  state  can  offer  credibility  to  community   organizations—specifically  to  differentiate  them  from  scammers—being  seen  as  the  state   can  be  a  liability.  Another  public  employee  who  asked  to  remain  confidential  summarized   the  problem  this  way:  “People  wouldn’t  go  to  a  government  agency  for  help.  Let’s  be  honest   here.  People  don’t  believe  government  is  here  to  help.”  As  she  told  me  this,  she  rolled  her   eyes  at  me  exasperatedly  to  reinforce  that  this  is  the  most  obvious  thing  she  could  possibly   say.  After  working  for  the  state  for  more  than  a  decade,  she  firmly  believed  that,  “If  people   knew  they  were  dealing  with  the  state  they  wouldn’t  provide  as  much  information:  ‘why  do   you  need  my  social  security  number?’  They’re  afraid  of  what  you’re  going  to  do  with  it.”100     The  state  is,  then,  simultaneously  comforting  and  menacing  to  citizens  (cf.  Poole  2004).  As   an  accreditor  scrutinizing  businesses  and  organizations,  the  state  appeared  legitimate  and   protective.  But  when  the  state  surveiled  citizens,  they  were  apt  to  feel  the  state  as                                                                                                                   99  Interview,  Laura,  April  11,  2011,  Lansing,  Michigan.   100  Interview,  Charlene,  April  11,  2011,  Lansing,  Michigan.   208   threatening.  Public  administrators  felt  this  contradiction  and,  in  the  face  of  citizens’   resistance  to  the  state,  opted  to  do  the  state’s  work  without  being  seen  as  the  state.   Whereas  the  modernist  state  project  was  in  many  ways  is  about  being  visible,   ordered,  rational  (Scott  1998),  before  the  financial  crisis,  the  US  government  was  trying  to   be  less  visible  and  to  disperse  rationality  throughout  market  and  community  actors.  Many   analysts  have  written  about  the  privatization  of  the  state  under  neoliberalism,  not  a   diminishing  of  state  power,  but  a  diffusion  into  more  places.  The  ideals  of  neoliberalism  are   to  devolve  more  control  to  the  private  sector,  business,  and  “community”  stakeholders   (even  the  word  ‘stakeholders’  makes  it  sound  more  transactional  than  civic).  Rose  (1996)   argues  that  in  what  he  calls  ‘advanced  liberal  democracies,’  regulation  is  not  through  the   state  or  traditional  means  of  welfare;  instead,  experts  act  in  communities  to  try  to  get   individuals  to  make  rational  choices  that  are  supposed  to  be  in  their  best  interests  (41).   That  is,  state  power  does  not  have  to  call  itself  state  power  so  there  are  agents  exercising   “state-­‐like  power”  of  governance,  regulation,  etc.  without  being  the  state  (Trouillot  2001).   With  this  neoliberal  kind  of  governing,  the  state  becomes  less  visible  as  the  state.  And  what   the  financial  and  housing  market  crises  did  was  make  the  state  more  visible  as  the  state.     In  the  introduction,  I  argued  that  crises  are  moments  of  vulnerability  forced  by   events  into  an  unwelcome  state  of  visibility.  Such  is  the  case  with  the  state  in  both  the   TARP  bailout  and  campaigns  like  Save  the  Dream.  These  exposures,  required  by  the   overwhelming  threat  of  collapse,  made  the  state  not  only  govern  but  do  so  in  highly  visible   ways.  Regulators  responding  to  the  financial  crisis  believed  that  the  Federal  Reserve  and   Treasury  Department’s  interventions  would  reassure  the  animal  spirits  of  panicked   investors,  however  the  bailout  produced  uneven  results  even  on  that  score,  as  many   209   institutions  continued  hemorrhaging  capital  and  stock  value  (FCIC  2011).  HAMP  and  Save   the  Dream,  too,  exposed  the  state  to  criticism  for  their  treatment  of  distressed   homeowners—from  the  right  (the  prominent  critiques  when  I  was  doing  this  research)  for   rewarding  homeowners’  recklessness  and  from  the  center  and  left  for  being  insipid.   Together,  such  actions  have  made  governments  particularly  vulnerable  to  attacks  from  the   Tea  Party  that  the  state  has  betrayed  the  nation,  summed  up  in  the  protest  sign  “The   American  Dream  is  Not  a  Handout.”101       The  community  organizations  that  offered  housing  counseling  were  an  “easier   gateway”  to  reach  distressed  homeowners,  according  to  program  administrator  Cindy.102   There  is  no  requirement  for  an  agency  to  become  certified  by  HUD  in  order  to  provide   housing  counseling;  certification  is  voluntary  but  it  is  a  pre-­‐condition  for  agencies  to   receive  HUD  funding  for  housing  counseling.  HUD  has  been  the  largest  single  source  of   funding  for  housing  counseling—until  its  funding  for  fiscal  years  2010  and  2011  were  cut   by  Congress—though  it  provided  less  than  fifteen  percent  of  the  industry’s  funding.  Smaller   agencies,  such  as  the  ones  where  I  did  my  fieldwork,  tend  to  draw  more  of  their  budgets   from  HUD  funding.  HUD  makes  grants  to  state-­‐level  intermediaries,  such  as  MSHDA  and  to   local  agencies.       To  be  certified  as  a  HUD-­‐approved  housing  counseling  agency,  an  organization  must   have  1)  non-­‐profit  status,  2)  a  presence  in  the  community  where  it  operates,  3)  already   successfully  run  a  housing  counseling  program  for  one  year,  and  4)  an  automated  system                                                                                                                   101  Since  2011,  Occupy  Wall  Street  has  popularized  strains  of  critique  formulated  by  other   activists,  such  as  “Banks  got  bailed  out.  We  got  sold  out.”—and  its  signature  “We  are  the   99%.”   102  Interview,  Cindy,  April  11,  2011,  Lansing,  Michigan.   210   for  collecting  data  on  the  people  they  serve  (Herbert,  Turnham  and  Rodger  2008).103  Yet,  it   is  not  only  the  promise  of  winning  funding  from  HUD  that  drives  agencies  to  seek  its   certification.  There  are  about  twice  as  many  HUD-­‐approved  counseling  agencies  than   agencies  actually  receiving  funding  from  HUD.  In  their  study  of  the  housing  counseling   industry,  Herbert,  Turnham,  and  Rodger  (2008)  argue  that  agencies  may  be  driven  to  apply   for  HUD  approval  specifically  to  “enhance  an  agency’s  legitimacy  in  the  eyes  of  the  general   public  and  funders”  (14).       Although  housing  counseling  is  in  most  senses  a  government  endeavor,  the  delivery   of  services  happens  through  the  non-­‐profit  sector  in  community  organizations.  In   attempting  to  make  sense  of  the  neoliberal  forms  of  state  power,  anthropologists  have   largely  drawn  on  Gramscian  and  Foucauldian  readings  on  the  state  and  forms  of  power.   Both  globalization  and  neoliberalism  have  implied  a  profusion  of  sites  of  authority  and,   accordingly,  anthropologists  since  the  1980s  have  worked  to  understand  state  power   beyond  the  bounds  of  specific  state-­‐identified  institutions.  Rather,  the  prevailing  theory  is   to  understand  state-­‐like  power  as  liable  to  crop  up  within  the  institutions  of  the  state  itself,   in  institutions  of  civil  society,  governmentalized  NGOs,  and  in  individuals’  own  disciplines   of  self-­‐care  and  visions  of  the  good  life.  Rose’s  (1996)  writing  on  this  hybrid  mixture  of   authority  seems  like  it  could  have  been  written  about  the  relationship  of  MSHDA  to  the                                                                                                                   103  In  2007,  24  CFR  Part  214  Housing  Counseling  Program;  Final  Rule  changed  the   provision  that  all  of  an  agency’s  facilities  have  to  be  located  in  the  community  where  it   provides  services.  Presumably,  HUD  changed  this  requirement  to  allow  national  call   centers  to  be  able  to  provide  counseling  for  the  increasing  number  of  people  needing   foreclosure  intervention  counseling.  Department  of  Housing  and  Urban  Development,   Housing  Counseling  Program;  Final  Rule.  Federal  Register  vol.  72,  no.  188.  September  28,   2007.  Pp.  55638-­‐55654.  Available  at  www.hud.gov/offices/hsg/sfh/hcc/final.pdf.   211   non-­‐profit  agencies  that  administer  its  counseling  programs.104  He  writes:   The  reconfiguration  of  political  power  involved  here  cannot  usefully  be  understood  in   terms  of  the  opposition  of  State  and  market:  shaped  and  programmed  by  political   authorities,  new  mechanisms  are  utilized  to  link  the  calculations  and  actions  of  a   heterogeneous  array  of  organizations  into  political  objectives,  governing  them  “at  a   distance”  through  the  instrumentalization  of  a  regulated  autonomy.  (57)       Housing  counseling  exhibits  all  these  elements  of  what  Rose  argues  is  the  trend  toward   governing  through  community,  where  morally  appropriate  choices  can  be  taken  based  on   the  choices  of  autonomous  individuals  in  communities  rather  than  at  the  behest  of  experts   concentrated  within  state  agencies.  Housing  counseling  does  retain  the  interest  of  the   state—in  producing  stable  communities  and  homeowners—but  disperses  the  daily  work  of   producing  these  results  to  organizations  operating  through  and  in  the  name  of   “community.”       In  my  experience  with  housing  counseling,  non-­‐profit  professionals  made  a  strong   distinction  between  themselves—whose  “programs  are  for  the  benefit  of  people”105—and   “scammers”—that  is,  for-­‐profit  organizations  like  the  one  Andre  used  that  make  promises   to  desperate  homeowners  and  take  money  from  them  without  necessarily  improving  (and   often  worsening)  their  housing  situation.  There  is  a  strong  ethic  in  the  housing  counseling   community  that  they  cannot  promise  a  certain  outcome  for  their  clients.  At  a  counselor   training  in  the  summer  of  2010,  the  lead  trainer,  Frank,  warned  counselors  of  a  scandalous   betrayal  at  an  agency  he  used  to  direct  in  the  Washington,  D.C.  area.  A  counselor  Frank                                                                                                                   104  It  would  be  wrong  to  lose  sight  of  the  fact  that  housing  counseling,  and  its  delivery   through  community  organizations,  came  about  in  the  late  1960s,  not  as  a  part  of  a   relentless  march  of  neoliberalism  since  the  1980s.     105  Interview,  Laura,  April  11,  2011,  Lansing,  Michigan.   212   hired  was  processing  homeowners’  foreclosure  prevention  applications  but,  when  they   were  denied,  told  the  clients  he  would  work  with  them  outside  the  non-­‐profit,  for  a  fee,  and   guarantee  them  a  better  outcome.  As  Frank  finished  his  cautionary  tale,  the  basement   conference  room  shook  its  collective  head  in  disbelief  and  filled  with  the  murmurs  of  35   housing  counselors.  This  intrusion  in  Frank’s  agency  starkly  troubled  the  bright  line   housing  counselors  work  to  maintain  between  legitimate  and  illegitimate  forms  of   intervention.   In  this  section,  I  examined  the  productive  location  of  housing  counseling  as   simultaneously  a  state  and  a  non-­‐state  activity.  Through  the  location  of  services  both  inside   and  outside  the  state,  the  state  is  both  a  source  of  credibility  and  distanced  from   responsibility.  In  the  next  two  sections,  I  examine,  first,  foreclosure  intervention  strategies   in  practice  and,  second,  ways  homeowners  make  demands  for  different  kinds  of   recognition  from  the  state  as  housing  counselees.  In  turn,  housing  counselors  work  to  limit   homeowners’  expectations  and  emotional  indulgences,  trying  to  shape  homeowners  into   self-­‐responsible  financial  subjects.       The  Housing  Counseling  Industry  and  The  Arts  of  Governance   Although  housing  counseling  takes  place  in  private  sector  settings  (non-­‐profits,  lending   institutions,  or  for-­‐profit  counseling  agencies),  housing  counseling  has  been  a  state   endeavor  supporting  the  goals  of  social  inclusion  and  financial  stability,  since  its  inception   half  a  century  ago.  The  1968  Housing  and  Urban  Development  Act  established  HUD  as  a   cabinet-­‐level  agency  with  responsibility  for,  among  other  activities,  housing  counseling   (Herbert,  Turnham,  and  Rodger  2008).  Along  with  other  Great  Society  initiatives  in  the  late   213   1960s,  HUD’s  goals  were  to  decrease  racial  and  wealth  disparities.  Housing  counseling  was   a  specific  strategy  to  support  low-­‐  and  moderate-­‐income,  largely  minority,  Americans  to   achieve  and  sustain  homeownership.  Although  housing  counseling  takes  place  in  private   sector  settings  (non-­‐profits,  lending  institutions,  or  for-­‐profit  counseling  agencies),  housing   counseling  is  a  practice  of  statecraft  and  governance.   Housing  counseling  was  intended  to  promote  homeownership  by  low-­‐  and  moderate-­‐ income  Americans;  however,  through  the  1980s,  housing  counseling  agencies  mainly   provided  rental  assistance  (Herbert,  Turnham,  and  Rodger  2008).  Today,  housing   counseling  covers  a  range  of  activities  from  credit  counseling,  usually  designed  to  help   renters  qualify  for  mortgages;  pre-­‐purchase  counseling  and  education;  help  finding   appropriate  rental  housing;  mortgage  delinquency  and  foreclosure  prevention  counseling;   other  homeowner  supportive  services,  such  as  home  repair  aid  or  loans  or  energy   efficiency  upgrades;  and  preparing  housing  discrimination  complaints.     Since  the  1990s,  when  the  federal  government  increased  its  emphasis  on  promoting   minority  homeownership,  counseling  agencies  have  seen  a  precipitous  growth  in  their   funding,  client  loads,  and  number  of  pre-­‐purchase  counseling  clients.  Although  federal   policies  have  explicitly  buoyed  homeownership  since  the  1920s,  it  was  embraced  with   fervor  as  an  asset-­‐building  strategy  beginning  in  the  1990s.  The  Clinton  administration  set   a  goal  for  a  national  homeownership  rate  of  67.5  percent  and  was  especially  concerned   with  extending  homeownership  to  poor  and  minority  borrowers  as  evidence  emerged  that,   in  spite  of  the  1977  Community  Reinvestment  Act  (CRA),  minority  applicants  and  all   women  were  more  likely  to  be  rejected  for  a  mortgage  or  receive  loans  with  predatory   terms  (Munnell,  et  al  1992;  Avery,  Beeson,  and  Sniderman  1993;  Immergluck  2009).   214   Clinton  shepherded  in  reforms  to  the  CRA  allowing  low-­‐income  and  minority  borrowers  to   get  loans  from  CRA  lenders  in  any  neighborhood,  not  only  impoverished  neighborhoods,   with  the  effect  of  allowing  more  African  American  and  Latino  homebuyers  to  purchase  in   predominantly  white  neighborhoods  (Saegert,  Libman,  and  Fields  2009).  Whether  in  intent   or  only  in  effect,  the  reform  is  philosophically  consistent  with  the  HOPE  VI  program  to   “deconcentrate  poverty”  by  moving  public  housing  residents  into  mixed-­‐income   neighborhoods  (cf.  Greenbaum  2008).  George  W.  Bush’s  “ownership  society”  advocated   personal  control  of  health  care,  parental  control  of  their  children’s  school  choice,  and  a   privatized  retirement  system,  because  of  an  inherent  skepticism  of  government  provision   and  drive  toward  privatization,  but  also  because  ownership  was  presumed  to  give   individuals  “more  dignity,  more  pride,  and  more  confidence”  (Boaz  n.d.).  Among  its   initiatives  to  promote  homeownership,  the  Bush  administration  set  a  target  for  5.5  million   new  minority  homeowners  and  supported  down  payment  assistance,  including  under  the   American  dream  Downpayment  Act.     Housing  counseling  agencies  were  key  interlocutors  in  the  low-­‐  and  moderate-­‐ income  homeownership  conversation.  With  vastly  increased  funding  available  from  HUD,   counseling  agencies  provided  homebuyer  education  and  administered  down  payment   assistance  programs  to  millions  of  aspiring  homeowners.  One  of  the  first  tests  of  such   initiatives  was  the  American  dream  Demonstration,  funded  by  the  Administration  for   Children  and  Families,  to  promote  the  model  of  matched  savings  accounts  for  low-­‐income   households  to  accumulate  money  toward  a  down  payment  on  a  house,  postsecondary   education,  or  capitalizing  a  business.  The  program  has  evolved  into  the  Assets  for   215   Independence  program,  which  funds  matched  savings  accounts  and  homeownership   promotion  activities  at  housing  counseling  agencies.       Michigan  housing  counselors  who  had  been  in  the  industry  before  the  foreclosure   crisis  hit  talked  with  reverie  about  the  ease  and  optimism  of  that  era.  One  administrator   who  used  to  do  homebuyer  education  at  MSDHA  and  the  Family  Self-­‐Sufficiency  (FSS)   program  to  move  welfare  recipients  off  welfare,  reflected  that  homebuyer  education,  “was   easy  as  pie!  It  was  the  American  dream,  you  get  clients  and  lenders  to  get  people  into  a   house.”  Then  a  couple  of  years  ago,  “it  was  like  the  faucet  turned  from  warm  to   freezing.”106  Since  the  mortgage  market  began  to  collapse  in  2005,  counseling  agencies   nationwide,  including  Michigan,  have  worked  mostly  with  homeowners  trying  to  prevent   foreclosure.  In  fact,  during  the  year  I  conducted  fieldwork,  housing  counseling  agencies   funded  with  MSHDA’s  HUD  money  served  almost  ten  times  as  many  people  trying  to   prevent  foreclosure  as  they  did  potential  new  buyers.107       Foreclosure  Interventions   Myriad  programs  have  proliferated  in  response  to  the  mortgage  crisis,  from  decades-­‐ old  strategies  of  door-­‐to-­‐door  outreach  by  community  organizers;108  to  lenders’  in-­‐house   modification  programs  that  have  long  existed  but  rarely  been  used;  to  federal  programs                                                                                                                   106  Fieldnotes,  February  26,  2010.   107  In  fiscal  year  2010  (October  1,  2009  to  September  30,  2010)  MSHDA  reported  that  its   30  subgrantees  served  21,507  clients  seeking  foreclosure  prevention  and  2,725  clients   seeking  pre-­‐purchase  counseling.   108  Although  this  kind  of  outreach  suffered  a  serious  blow  nationwide  when  Congress   defunded  ACORN,  the  Association  of  Community  Organizers  for  Reform  Now!,  that  had  one   of  the  largest  foreclosure  prevention  programs  in  the  county,  especially  for  low  income  and   minority  homeowners.     216   emerging  from  the  FDIC,  FHA,  and  Treasury  Department;  to  nationwide  partnerships   between  housing  advocates  and  lenders  in  the  Hope  Now  Alliance.  Each  program  entails   specific  eligibility  requirements  and  forbearance  or  loan  modification  options  (for  a  concise   overview  of  policy  responses,  see  HUD  2010).  In  my  field  sites,  two  programs  more  than  all   the  others  captured  homeowners’  attention  and  structured  their  possible  courses  of  action:   HAMP  and  Michigan’s  90-­‐day  pre-­‐foreclosure  negotiation  law.  The  HAMP  program,   described  in  chapter  4,  encouraged  lenders  to  offer  homeowners  mortgage  relief  with  the   liquidity  they  gained  through  the  TARP.  The  second  program  shaping  the  prospects  of   participants  in  this  research  was  a  Michigan  law  passed  in  2009  that  required  lenders  to   offer  homeowners  the  option  of  a  90-­‐day  mediation  period  before  foreclosure  proceedings.   Michigan  was  among  20  states  to  enact  some  kind  of  waiting  period  or  mediation  before   foreclosure  continues.109  If  a  homeowner  chose  to  activate  the  waiting  period,  the  auction   was  postponed  for  ninety  days  after  the  foreclosure  notice.  This  time  was  to  allow   homeowners  to  apply  for  a  mortgage  modification  from  their  lender.  It  was  enacted   because  local  legislators  perceived  that  the  Obama  administration’s  voluntary  mortgage   modification  program  excluded  too  many  homeowners.  Homeowners  were  to  work  with   any  state-­‐approved  non-­‐profit  foreclosure  prevention  counselor  to  negotiate  terms  of  a   modification  with  the  lender.  Foreclosing  lenders  were  required  to  notify  homeowners  via   a  registered  letter  that  included  contact  information  to  non-­‐profit  housing  counseling                                                                                                                   109  Overviews  of  legal  stays  on  foreclosure  may  be  found  at  the  National  Consumer  Law   Center  (http://www.nclc.org/images/pdf/foreclosure_mortgage/state_laws/survey-­‐ foreclosure-­‐card.pdf  and   http://www.nclc.org/images/pdf/foreclosure_mortgage/mediation/summary-­‐of-­‐ programs.pdf);  and  United  States  Foreclosure  Laws   (http://www.foreclosurelaw.org/index.htm).  Also  see  Jefferson  et  al  (2012:1-­‐7  and   Appendix  G).   217   agencies.  Their  workloads  have  increased  since  local  foreclosures  began  rising  in  2005  but   especially  since  the  passage  of  HAMP  and  Michigan’s  90-­‐day  law.   Time  and  timelines  are  vital  to  the  foreclosure  process.  In  the  foreclosure  mediation   process,  temporality  and  waiting  also  become  central  experiences.  Because  of  the  centrality   of  time  in  the  pre-­‐foreclosure  experience,  I  present  first  a  regular  foreclosure  timeline  (see   Figure  2),  without  the  optional  90-­‐day  mediation  period.  This  is  the  most  basic  foreclosure   timeline  in  Michigan;  even  so,  there  are  contingencies  and  caveats  that  make  it  hard  to  give   a  straightforward  answer  to  how  long  it  takes  for  someone  to  lose  their  home.  Following   that,  I  discuss  the  90-­‐day  law  introduced  in  Michigan  in  2009,  including  the  effects  it  has  on   the  overall  timeline,  the  intervention  it  proposes  to  make,  and  the  key  actors  involved.     For  a  regular  foreclosure  timeline,  assume  mortgage  payments  are  due  on  the  first   of  the  month.  If  a  homeowner  does  not  pay  on  the  due  date,  the  loan  is  considered   delinquent;  there  is,  however,  a  15-­‐day  grace  period  so  late  fees  are  not  assessed  until  day   16.  At  this  point,  servicers  begin  contacting  the  homeowner  to  make  a  payment.  These  calls   come  from  the  collections  department;  the  mandate  of  the  collections  department  is  to  get   the  homeowner  to  make  some  payment,  though  they  may  or  may  not  accept  partial   payments.  Already,  homeowners  begin  to  lose  faith  in  their  mortgage  servicers  because  of   these  early  rebuffs,  setting  them  up  to  distrust  the  institutions  once  or  if  they  finally   connect  to  the  loss  mitigation  department  (Fields,  Libman,  and  Saegert  2010).     Mortgage  delinquency  is  calculated—and  reported  to  the  credit  bureaus—in  30-­‐day   intervals.  Delinquencies  of  up  to  90  days  are  not  considered  seriously  delinquent.  At  90   days  past  due  (3  payments),  a  loan  is  considered  seriously  delinquent.  At  this  point,  the   lender  sends  a  “demand  letter,”  (alternately  called  a  breach  letter)—the  demand  is  for  all   218   the  past  due  payments  and  the  breach  is  of  the  terms  of  the  mortgage.  Demand  letters  most   often  give  homeowners  another  30  days  to  bring  the  loan  current,  paying  all  arrears  and   fees.  When  a  fourth  payment  is  missed,  the  loan  is  in  default  and  foreclosure  proceedings   begin.  Lenders  contact  their  attorneys  who  begin  preparing  paperwork  and  scheduling  a   sheriff  sale.  Legally,  foreclosures  in  Michigan  can  follow  proceedings  to  foreclose  judicially   or  by  advertisement  (non-­‐judicially);  the  vast  majority  of  foreclosures  occur  by   advertisement.  Meaning,  a  house  is  sold  by  sheriff  sale  (public  auction)  rather  than  the   borrower  and  lender  going  to  court.  At  this  point,  the  house  is  in  foreclosure.  Foreclosure  is   a  process  rather  than  a  single  moment  of  transition;  that  is,  a  house  can  go  in  and  out  of   foreclosure  status  many  times  before  ownership  transfers  back  to  the  lender,  if  at  all.  From   the  time  the  lender  refers  a  homeowner  to  the  attorneys,  it  takes  four  to  six  more  weeks  to   complete  the  sale.  The  lender  must  advertise  the  sheriff  sale  for  four  consecutive  weeks  in  a   newspaper  in  circulation  in  the  county  in  which  the  house  is  located.  Simultaneously,  the   lender  has  its  attorneys  begin  foreclosure  proceedings  and  its  agents  post  a  notice  of  sheriff   sale  on  the  house.  These  are  supposed  to  notify  homeowners  and  any  other  lien-­‐holders  of   the  immediacy  of  foreclosure;  in  effect,  they  also  alert  family  members,  neighbors,  and   speculators  to  a  distressed  owner’s  situation.  The  sheriff  also  marks  the  house  by  putting  a   pre-­‐sale  notice  on  the  house’s  window.  Again,  this  is  supposed  to  be  a  notice  a  homeowner   cannot  help  but  see—in  case  they  are  not  opening  mail  from  their  lender  and  have  missed   the  other  announcements  about  the  auction.  According  to  MSHDA’s  foreclosure  timeline,   this  notification  process  can  take  up  to  two  weeks,  meaning  that  the  first  notice  of  sheriff   sale  will  be  issued  by  105  days  after  the  first  missed  payment.  If  there  are  no  glitches  or   219   delays  in  the  process,  a  sheriff’s  sale  should  occur  five  to  six  weeks  after  the  first  notice  of   sale  is  printed—all  told,  about  150  days  from  the  first  missed  payment.     220   Figure  2.  Foreclosure  Timelines   For interpretation of the references to color in this and all other figures, the reader is referred to the electronic version of this dissertation. 221     Figure  2  (cont’d)       222   “They  can  see  it  and  they  know”   Participants  in  my  research  experienced  the  notice  taped  to  the  window  as  a   moment  of  deep  shame,  being  marked  as  though  with  a  scarlet  letter.  Kiersten  had  just   turned  19  and  was  living  with  her  mother  and  brother  when  their  house  was  foreclosed.   Although  Kiersten  had  realized  about  a  year  prior  that  her  parents  were  in  financial   trouble—noticing  unopened  bills  and  letters  amassing  in  the  kitchen  junk  drawer,  her   parents  telling  her  she  would  have  to  pay  her  own  way  in  college—they  did  not  have  much   communication  from  the  lender  about  the  mortgage  delinquency.  The  deed  was  in  her   mother’s  name  but  the  bank  communicated  about  the  delinquent  mortgage  with  Kiersten’s   father,  who  was  estranged  from  the  family  at  the  time.  Her  father,  Mike,  had  been  a   mortgage  broker  in  their  northwestern  Michigan  town.  Like  many  brokers  in  the  crash,   Mike  lost  much  of  his  livelihood,  putting  the  family  in  dire  financial  straits.  Unlike  most   people,  Mike  tried  to  evade  his  financial  problems  by  embezzling  money  that  members  of   their  church’s  investment  club  entrusted  to  him.  When  the  house  entered  foreclosure,  Mike   left  the  family.  He  was  arrested  and  served  a  short  jail  sentence  for  embezzling  the  church   members’  investment  money.  Kiersten  understood  her  father’s  irresponsible  behavior  as   partially  a  function  of  his  selfishness,  and  partly  due  to  his  recent  diagnosis  with  bipolar   disorder.  In  the  meantime,  Kiersten’s  mother’s  job  was  not  enough  to  help  them  catch  up   on  the  payments  and  the  house  was  foreclosed:  “[T]he  police  came  and  put  the  notice  up  on   the  door  that  we  were  under  foreclosure.  That  was  [a]  really  devastating  and  embarrassing   day.  And  also  all  the  neighbors  are  around—they  can  see  it  and  they  know...And  obviously   then  when  the  police  officer  put  the  notice  on  the  door,  we  knew  this  was  it.”       223   The  notice  on  Kiersten’s  house  was  the  sheriff  sale  or  auction  notice.  In  almost  all   sheriff  sales,  the  lender  or  investor  purchases  the  house  for  an  amount  equivalent  to  the   outstanding  mortgage.  Michigan  is  one  of  10  states  to  offer  a  redemption  period,  a  liminal   period  after  the  sale  but  before  a  property  transfer  takes  place.  At  this  point,  a  sheriff’s   deed  is  recorded,  which  shows  the  foreclosure  sale  date  and  the  last  date  a  homeowner  can   redeem  the  property.  Michigan  gives  homeowners  six  months  to  live  in  the  house  payment-­‐ free.110  The  purpose  of  the  redemption  period  is  to  allow  homeowners  a  chance  to  get   their  property  back  out  of  foreclosure  .  Homeowners  make  no  mortgage  payments  during   this  time  but  are  responsible  for  the  utilities,  insurance,  and  maintenance.  Consumer   advocates  argue  that  mortgage-­‐free  living  during  the  redemption  period  allows  foreclosed   homeowners  to  build  savings  that  help  them  afford  moving  costs,  first  and  last  month’s   rent,  and  security  deposits  on  subsequent  rental  housing.     During  this  time,  homeowners  can  also  get  the  house  out  of  foreclosure—can   “redeem”  it—by  repaying  the  full  remaining  balance  of  the  loan  plus  fines,  fees,  and   lawyers’  costs.  The  language  for  this  process  draws  heavily  from  religious  vocabulary  to   normalize  a  moral  universe  aligned  with  the  priorities  of  private  property,  contract  law,   and  financial  stability.  To  be  on  the  verge  of  this  loss  is  the  place  where  one  finds  literally   the  last  offer  of  redemption.  Is  the  implication,  by  extension,  that  homeowners  redeem   themselves  as  actors  in  the  social  world?  To  reenter  the  mortgage  contract  by  redemption,   borrowers  avert  the  moral  hazard  of  the  bailout  and  reenter  well-­‐worn  circuits  of   consumer  capital  flows.                                                                                                                   110  The  redemption  period  extends  to  12  months  if  the  property  is  larger  than  3  acres   (because  they  are  classified  as  agricultural)  or  if  there  is  more  than  50  percent  equity  in  the   property.   224   Michigan’s  90-­day  Law   The  provisions  of  the  90-­‐day  law  were  that  before  servicers  could  foreclose  by   advertisement,  they  must  send  a  defaulted  borrower  a  letter  by  certified  mail  informing   them  of  their  rights  to  negotiate  and  provide  them  with  contact  information  for  non-­‐profit   housing  counseling  agencies  and  legal  aid  offices.  It  was  important,  housing  counselors   pointed  out,  for  the  letter  to  be  sent  via  certified  mail  to  ensure  that  the  homeowner   actually  receives  the  letter.  It  was  a  widely  held  belief  that  defaulted  homeowners  stop   opening  their  mail  from  their  lenders  as,  for  example,  Kiersten’s  mother  did;  requiring  that   the  letter  be  signed  for  at  least  ensures  that  it  is  delivered.  In  this  incarnation,  the  laws   stipulated  that  homeowners  must  use  the  services  of  a  non-­‐profit  housing  counselor   certified  by  HUD  or  MSHDA,  a  provision  that  has  since  been  removed.  That  was  the  primary   reason  that  client  volumes  in  Lansing  had  increased  so  precipitously  by  the  time  I  started   fieldwork  in  late  2009  and  throughout  2010.  Frequently,  homeowners  called  Franklin   Street  at  the  end  of,  or  after,  their  14-­‐day  window;  in  practice,  the  lenders’  attorneys  gave   homeowners  a  ten-­‐day  grace  period.  Aside  from  answering  phones,  responding  to  14-­‐day   letters  was  one  of  the  primary  ways  I  contributed  as  a  volunteer  at  Franklin  Street.  After   clients  gave  preliminary  information  over  the  phone,  they  would  fax  or  bring  in  a  copy  of   their  14-­‐day  letter  so  that  someone  at  Franklin  Street  could  fill  out  and  fax  the  form  letter   stating  that  the  homeowner  was  exercising  her  option  for  the  90-­‐day  window  by  working   with  a  counselor.     While  I  was  doing  this  research,  lenders  had  discretion  about  when  to  send  the  14-­‐ day  letters  after  delinquency  began.  In  practice,  it  seemed  that  most  often  homeowners   received  their  90-­‐day  letters  around  the  time  of  the  demand  letters.  Although  clients  and   225   lenders  rarely  moved  through  the  process  this  quickly  for  reasons  I  detail  throughout  the   dissertation,  a  best  estimate  for  a  smooth  movement  through  this  process  is  that  the  90-­‐ day  window  would  be  open  from  about  days  105  to  195.  This  was  primarily  the  time  when   I  met  housing  counseling  clients.  This  was  the  time  during  which  clients  and  housing   counselors  tracked  hundreds  or  thousands  of  pages  of  documents  through  the  agency’s  fax   machine  and  overnight  mail  envelopes,  all  with  documents  supporting  an  application  for   loan  modification.  Sometimes  housing  counselors  got  their  clients  an  offer  of  a  loan   modification  or  other  work-­‐out  option  before  the  90-­‐day  window  was  closed.  If  the  parties   had  agreed  on  some  solution,  there  was  no  need  for  a  negotiation  meeting.  If  there  had  not   been  any  agreement,  however,  the  client,  housing  counselor,  and  lender’s  “designated   agent”  were  to  have  a  meeting  before  the  90  days  expired.  In  practice,  lenders  designated   their  attorneys  to  attend  these  meetings,  the  same  attorneys  to  whom  we  responded  about   the  14-­‐day  letters.  The  flaw  with  those  meetings  during  2010  was  that  the  attorneys  did   not  have  authority,  let  alone  expertise,  to  negotiate  new  loan  terms.  I  witnessed  negotiation   meetings  where  the  three  parties  sat  around  the  agency’s  conference  table  and  had  yet   another  phone  call  with  a  representative  at  the  lender’s  call  center,  who  reported  simply   that  there  had  been  no  decision  yet  on  the  application.  In  another  case,  the  lender’s   representative  asked  the  clients  to  resubmit  their  updated  financial  information  (again).   During  Angela  and  Felipe’s  mediation  meeting,  the  lender’s  attorney  explained  that  asking   them  to  resubmit  paperwork  “is  not  asking  you  to  give  up.  It  means  there’s  still  a   chance.”111  This  is  the  flip  side  of  the  Kafkaesque  experience  for  homeowners  explained  in   the  previous  chapter.  In  order  to  make  a  decision,  the  lender’s  underwriting  department                                                                                                                   111  Fieldnotes,  June  10,  2010.   226   required  them  to  look  at  the  borrower’s  most  recent  paycheck  and  savings  and  checking   balances.  Frequently,  clients  submitted  this  information  with  their  initial  request  but  by  the   time  a  loss  mitigation  staff  person  looked  at  it,  the  financials  were  two  to  four  months,   sometimes  more,  out  of  date.  Therefore,  the  application  went  back  into  the  queue  while   clients  re-­‐faxed  or  re-­‐FedExed  their  financial  information.  In  cases  like  these—negotiation   meetings  where  there  was  no  resolution,  the  lender  was  still  required  to  keep  foreclosure   proceedings  on  hold  until  they  had  definitively  given  homeowners  an  answer  about  their   request  for  a  modification.  (Though  even  in  cases  of  denials,  the  counselors  I  worked  with   most  closely  would  resubmit  a  new  application  if  the  homeowner’s  situation  changed,  such   as  getting  a  new  job,  in  between  the  time  of  denial  and  rescheduled  foreclosure   proceedings.)     The  timeline  presented  in  the  preceding  pages  is  a  greatly  simplified  version  of  the   workings  of  the  90-­‐day  law,  in  particular,  and  loan  modification  processes  in  general.  The   timeline  varied  widely  for  clients  based  on  a  range  of  factors,  which  could  include:  whether   a  loan  was  predatory,  which  usually  got  a  modification  much  more  quickly.  It  is  fairly   simple,  for  example,  to  see  that  person  has  an  adjustable  interest  rate  of  10.9  percent  and   payments  that  are  unsustainable.  If  a  loan  was  predatory  or  fraudulent,  clients  of  a   counseling  agency  tended  to  get  modifications  more  quickly;  their  information  was   sometimes  turned  directly  over  to  a  legal  aid  attorney  or  the  modification  request  was   submitted,  along  with  a  notice  that  the  case  was  referred  to  a  lawyer.  The  easy  adjustment   for  such  loans  is  to  convert  them  to  a  lower  fixed  rate.  Other  factors  that  affected  the   foreclosure  timeline  included:     227   • the  severity  and  complexity  of  a  homeowner’s  financial  situation,  including  if  the   homeowner  was  expecting  any  changes  in  their  income  and  if  there  was  a  second   mortgage,  and  with  what  institution;     • who  the  investor  was  on  the  loan;     • who  the  lender  and/or  servicer  was  on  the  loan;     • how  sluggish  or  saturated  the  hyper-­‐local  real  estate  market  was—that  is,  how   difficult  would  it  be  for  the  lender  to  resell  the  property  if  it  foreclosed.  Along  with   an  analysis  of  how  much  is  owed  on  the  mortgage,  the  condition  of  the  house,  and   additional  (proprietary)  factors,  this  goes  into  what  is  known  as  a  net  present  value   (NPV)  calculation,  which  helps  the  servicer  decide  if  they  will  lose  more  money  by   foreclosing  or  modifying  the  loan;     • which  representative  or  negotiator  the  homeowner  or  housing  counselor  got  on  the   phone;     • how  many  other  foreclosures  the  servicer  was  processing/what  their  organizational   capacity  was  to  deal  with  the  volume  of  requests—a  problem  so  severe  that  it   manifested  as  “robo-­‐signing;”   • a  homeowner’s  organizational  skills—for  example,  being  able  to  track  down  old   paystubs  and  tax  documents  as  well  as  being  willing  and  able  to  bring  them  to  the   counseling  agency  during  working  hours;     • a  housing  counseling  agency’s  capacity  to  take  on  new  clients  and  ability  to  handle   their  cases.     228   The  issues  above  undergird  every  foreclosure  intervention.  They  do  not  all  receive  equal   weight  in  each  one  but  they  all  pulsed  somewhere  in  the  organism  of  the  loan  modification   process.     I  realize  that  the  intricacies  of  this  foreclosure  timeline  may  be  dulling  to  an  outsider.   As  a  study  of  bureaucratic  intervention  and  uncertainty,  that  dulling  sensation  is,  in  fact,   part  of  the  point.  As  Hoag  (2011)  argues,  delays,  unnecessary  paperwork,  and  waiting   around  are  central  features  of  the  bureaucratic  encounter,  though  they  have  been  under-­‐ studied  in  anthropology.  In  spite  of  efforts  by  lawmakers,  consumer  advocates,  and   financial  institutions  to  establish  systems,  the  housing  counseling  milieu  was  radically   unsettled.  Counselors,  legislators,  banks,  and  homeowners  were  in  a  continual  process  of   waiting—on  themselves,  on  each  other,  on  the  crisis  to  unfold  in  a  way  that  would  point  to   a  straightforward  exit—and  of  reinvention.  In  this  way,  portended  foreclosure  and   bureaucratic  interventions  around  it  (counseling,  negotiation  periods)  were  like  other   bureaucratic  exercises  that  vacillate  between  order  and  chaos,  well-­‐intentioned  policies   and  the  “mangle  of  practice”  (Hoag  2011;  Das  2004).  Meanwhile,  all  the  actors  had  to   continue  acting,  not  able  to  unsnarl  the  mangle  in  which  they  found  themselves  but,  rather,   forging  any  circuitous  path  they  could  through  this  wilderness.       Housing  Counseling  in  Practice   Getting  In   Although  clients  can  begin  housing  counseling  at  any  point—and  the  Save  the   Dream  advertisements  encouraged  them  to  do  so  before  even  missing  a  payment,  most   clients  called  after  receiving  a  14-­‐day  letter.  Before  making  an  appointment,  the  person   229   answering  the  phone  does  an  intake  assessment.  I  often  served  in  this  role  at  Franklin   Street,  as  did  other  volunteers  or  a  dedicated  staff  person,  when  the  job  was  filled.     As  an  intake  volunteer,  I  asked  for  information  on  where  the  house  was,  how  many   months  behind  the  borrower  was  on  the  mortgage,  if  they  had  a  sheriff  sale  scheduled,  and   what  their  income  and  major  debts  were.  The  intake  specialist  who  trained  me  to  answer   these  calls  always  told  borrowers  the  counselor  “will  do  everything  she  can.  There  are  no   guarantees  but  she’ll  do  everything  she  can  to  help  you.”112  Frequently,  potential  clients   would  ask  about  the  prospects  for  getting  a  loan  modification.  Most  of  them  knew  about   loan  modifications  from  having  seen  and  heard  public  service  announcements  and  talking   with  friends,  coworkers,  neighbors,  and  family  who  had  also  fallen  behind  on  their   mortgages.  I  wanted  to  tell  them  that  I  felt  sure  Tami,  the  senior  counselor  at  Franklin   Street,  would  get  them  a  modification  because  she  fought  very  hard  for  her  clients  and  did   not  seem  to  accept  rejections.  But  I  quickly  adopted  the  intake  specialist’s  noncommittal   language  when  I  took  client  calls  because  making  promises  to  clients  is  a  sure  sign  of  being   a  scammer.   The  agency  was  in  an  old  Victorian  house  near  downtown  Lansing.  You  entered   through  the  back  door,  pass  through  a  couple  of  small,  non-­‐descript  rooms—antechambers,   really—before  entering  the  dining  room.  There,  a  large  conference  table  served  as  a   waiting  room,  a  place  for  the  agency  to  hold  homebuyer  education  classes  or  mediation   meetings  with  clients  and  lenders’  attorneys,  in  an  echo  of  political  speeches  about  the   “tough  conversations  families  across  America  are  having  around  the  kitchen  table.”  The   reception  room  was  off  to  one  side  of  the  dining  room.  Further  on  was  Marsha’s  office,  in                                                                                                                   112  Fieldnotes,  February  18,  2010.   230   what  in  past  years  would  have  been  a  parlor  or  a  front  bedroom  facing  Seymour  Street.   Marsha,  an  African  American  woman  in  her  50s,  had  been  at  the  agency  for  almost  a  year   when  I  started  volunteering  there  in  February  2010.  Marsha  was  an  AmeriCorps  member   whose  stipend  was  paid  through  a  grant  from  the  federal  sponsoring  agency  and  a   Michigan  non-­‐profit  that  had  secured  funds  for  20  “foreclosure  corps”  positions  throughout   the  state.  Traditionally,  AmeriCorps  members  have  been  young  adults  on  their  way  into  the   labor  force,  but  many  of  the  foreclosure  corps  members  I  met  were  middle-­‐aged  workers   (the  ones  I  knew  were  all  women)  dislocated  from  their  previous  careers,  often  in  real   estate  or  finance,  in  the  housing  bust.  AmeriCorps  pays  a  small  stipend  and  a  small  amount   toward  student  loan  debt,  however,  there  is  no  guarantee  that  one’s  full-­‐time  placement  at   a  particular  agency,  and  training  in  that  field,  will  turn  into  a  job  at  the  end  of  the  term.  (In   fact,  because  non-­‐profits  feel  they  are  operating  with  continually-­‐shrinking  budgets,  the   chance  the  agency  can  afford  to  keep  that  person  on  at  a  higher  wage  is  unlikely.)   In  the  most  common  counseling  encounter  at  Franklin  Street,  clients  progressed   through  the  house  back  to  front  and  vertically.  After  waiting  in  the  dining  room,  they  met   with  another  AmeriCorps  member,  an  intake  specialist  who  had  previously  been  a   mortgage  broker,  in  the  reception  area  and  fill  out  a  packet  of  intake  paperwork  for   Franklin  Street  and  MSHDA.  The  client  is  supposed  to  bring  a  large  set  of  documents  with   them  to  the  first  appointment.  These  include:  their  mortgage  loan  documents,  two  years  of   tax  returns  and  earnings  statements,  thirty  days  of  pay  stubs,  bank  statements,  proof  of   unemployment  checks,  proof  of  other  public  benefit  payments,  and  a  hardship  letter  where   they  explain  to  their  lender  why  they  need  modified  mortgage  terms.     231   They  then  proceeded  to  Marsha’s  office  in  the  front  of  the  house  where  they  went   over  their  budgets  and  bills.  Often,  Marsha  provided  them  with  an  overview  of  their   options  for  resolution,  such  as  a  loan  modification  or  forbearance  (brief  descriptions  of  loss   mitigation  options  are  shown  in  Table  6).  The  first  appointment  was  a  very  accounting-­‐ focused  event.  In  a  first  appointment,  mainly  they  went  over  the  client’s  bills  and  make  a   “crisis  budget,”  in  which  homeowners  cut  back  their  spending  as  much  as  possible.  My   writing  in  this  section  is  based  on  observation  of  seventeen  housing  counseling   appointments  at  the  agency  that  offered  in-­‐person  counseling.  I  augment  those   observations  with  observation  of  four  days  of  telephone  counseling  at  a  different  agency,  as   well  as  participant  observation  as  a  volunteer  and  interviews  with  housing  counselors  from   a  variety  of  counseling  agencies.  Homeowners  and  counselors  worked  on  the  budget  within   the  bounds  of  the  credit  report.  Monthly  bills  to  repay  loans  are  on  the  credit  report,  so  the   mortgage,  obviously,  and  car  payments.  Any  wage  deductions  or  garnishments  (such  as   alimony,  child  support,  repaying  a  401(k)  loan)  show  up  on  earnings  statements.  Then   there  were  the  less  firm  costs  of  utility  bills;  homeowners  had  a  billing  history  but  they   have  a  bit  of  room  to  adjust  the  costs  of  the  bills  by  turning  down/up  the  temperature   depending  on  the  season  and  working  on  weatherization.  What  was  not  reported   elsewhere  was  considered  discretionary.  According  to  counselors,  the  crisis  budget  should   only  be  one  the  clients  live  off  for  a  few  months.  However,  this  conflicted  with  the  fact  that   many  trial  loan  modifications  last  much  longer  and  that  some  homeowners  existed  in   housing  limbo  for  several  years.     All  told,  the  budgeting  exercise  was  about  coming  up  with  some  document  that   approximated  reality  that  homeowners  can  submit  to  their  lenders  for  consideration.   232   Disclosure  was  not  always  complete,  though.  There  can  be  "two  budgets—one  is  yours,  and   a  different  one  the  bank  has  seen.  Some  things  you  don't  have  to  present—but  basically   [the  budget]  is  what's  on  the  credit  report.  Food,  personal  items,  and  gas  are  usually  the   areas  to  cut,"  according  to  one  counselor  I  worked  with.113   The  effect  of  the  budgeting  exercise  was  to  lay  out  this  quantitative  information  in  a   way  that  compelled  the  homeowner-­‐client  to  account  and  calculate.  The  “new   prudentialism,”  as  O’Malley  (1996)  calls  it,  means  that  individuals  should  actively  engage  in   managing  their  own  risks.  The  role  of  government,  therefore,  is  not  to  manage  risks  for   people  but  to  provide  them  information  and  capacities  with  which  they  will  choose  to   appropriately  monitor  their  own  levels  of  risk,  which  are  no  longer  social  relations  but  a   quantifiable  and  calculable  quality  inherent  in  every  action.   After  about  an  hour  going  through  their  documentation  with  Marsha,  clients  went   upstairs  to  meet  with  Tami.  With  more  than  8  years  of  experience  in  housing  counseling,   Tami  was  a  real  veteran  compared  to  most  other  counselors  in  the  field,  and  one  of  my  key   informants.  She  studied  accounting  for  her  CPA  license  but  became  involved  with  providing   financial  literacy  and  credit  repair  courses  at  another  non-­‐profit,  which  changed  her  career   trajectory.  With  new  foreclosure  clients,  Tami  verified  information  about  their  mortgage,   talks  with  them  more  in  depth  about  the  various  options  they  had  with  (or  without)  their   lender  (Table  5),  and  began  negotiating  with  the  lender.  In  an  ideal  scenario,  clients  would   have  brought  in  all  the  documentation  they  need—bills,  mortgage,  income  information,  a   hardship  letter—and  filled  out  a  loss  mitigation  packet  that  Tami  faxed  from  the  copy  room                                                                                                                   113  Fieldnotes,  August  9,  2010.   233   across  the  hall,  which  in  prior  generations  would  have  been  the  house’s  smallest  and   darkest  bedroom.     Table 6. Loss Mitigation Options “Traditional modifications” take the amount that a borrower is behind on their mortgage (arrears) and add that amount to the end of the loan as new principal, which is recapitalized. Traditional modifications tend to increase loan payments. They are offered in-house by the mortgage servicer. This kind of modification has been used for people who temporarily got behind on their mortgage because of a short-term shock (like a job loss or health emergency) but can afford their payments overall. Refinance: pays off the original mortgage with a new loan. Refinances generally depend on a borrower having equity in the home, either because its value has risen or they’ve lived in the house long enough to have paid down the principal enough to have equity—or both. This option is not widely available in the current crisis because one of the main drivers of the crisis is that home values have dropped precipitously—about 30% in Lansing, for example. Homeowners cannot refinance a mortgage this severely underwater. A lender will not finance above the current market value, so they will not be able to pay off the original note with a refinance (even if they are able to credit-qualify for one). “Short refinance” overcomes the problem of refinancing an underwater mortgage because the original lender agrees to accept a loss when a borrower can refinance at present market value. Similar to a short sale, except the borrower retains ownership of the home. Very few lenders are willing to participate in a short refinance option; it is almost, if not exclusively, contained to refinances carried out by the Federal Housing Administration (FHA). Interest rate reduction: the most common type of loan modification in this crisis (Quercia and Ding 2009: 181, exhibit 3). These modifications may lower borrower monthly payments and the overall mortgage burden over the life of the loan. They may not lower monthly payments if borrowers are simultaneously repaying arrears or late fees. The level of interest rate reduction varies based on the program guidelines a lender is following, the homeowner’s credit score, finances, and the lender’s incentive structure. Principal reductions: a rarely-used option to reduce overall mortgage debt and monthly payments. By reducing the principal owed on the loan, these modifications address the problem of negative equity or being “underwater.” 234     During  sessions,  it  was  obvious  how  much  easier  the  whole  process  was  when   mortgages  were  held  in  portfolio  so  the  servicer  and  investor  are  the  same.  When  they   were  distinct  entities,  a  homeowner  must  first  apply  for  relief  through  the  servicer  of  their   main  mortgage,  who  then  (eventually)  analyzed  it  and  passed  it  on  to  the  investor  for   approval  or  denial.  Those  transactions  could  be  mediated  with  the  servicer’s  attorneys  over   the  course  of  months  or  possibly  years.  Then,  the  homeowner  made  a  separate  application   to  the  servicer  of  the  second  mortgage.  First  and  second  mortgage  companies  experience  a   prisoner’s  dilemma,  neither  wanting  to  be  the  first  company  to  agree  to  take  a  loss  on  the   loan.  Why  should  the  primary  mortgage  company  agree  to  lower  the  loan  balance  if  the   second  mortgage  will  go  into  default  and  trigger  foreclosure?  Why  should  the  second   mortgage  company  reduce  the  much  smaller  debt  the  homeowner  owes  it  when  the   primary  mortgage  is  clearly  what  is  breaking  the  homeowner’s  budget?  In  contrast,  I   observed  Phil’s  first  appointment  at  Franklin  Street  when  Tami  called  the  servicer  to   inquire  who  was  the  investor  on  Phil’s  only  mortgage.  The  customer  service  agent   informed  Tami  that  the  servicer  was  also  the  investor,  and  had  already  forgiven  Phil’s  two   missed  payments.114     Most  of  what  occurred  in  foreclosure  mediation  counseling  was  standardized  in   order  to  satisfy  two  distinct  but  related  mandates.  One  was  that  the  counseling  encounter   had  to  produce  the  information  needed  for  the  homeowner  to  submit  a  request  for  any   kind  of  loan  repayment  or  modification.  The  HAMP  program  had  become  a  benchmark  for   housing  counseling,  requiring  standard  elements.  Therefore,  counseling  agencies’  default   strategy  was  to  gather  information  required  by  HAMP.  Second,  agencies  also  needed  to                                                                                                                   114  Fieldnotes,  May  26,  2010.   235   complete  certain  counseling  components  to  get  reimbursed  by  their  funders.  One   curriculum,  outlined  in  the  National  Industry  Standards  for  Homeownership  Education  and   Counseling,  required:   • Intake  including  household  information,  mortgage  and  financial  information,   the  reason  for  mortgage  delinquency,  and  the  homeowner’s  goals  for   counseling;   • Mortgage  status;   • A  loss  mitigation  plan;   • Contact  with  the  foreclosing  lender  and  any  other  relevant  entities   (homeowners’  association,  tax  assessor,  etc.);   • Follow-­‐up  with  the  client;   • Referrals  to  other  community  resources.     Further,  for  any  agency  receiving  funding  from  the  National  Foreclosure  Mitigation   Counseling  (NFMC)  program  had  to  provide  certain  content  in  order  to  be  reimbursed  for   different  levels  of  service.  In  late  2007,  Congress  authorized  funding  for  NFMC  to  be   distributed  by  NeighborWorks©  America  to  local  counseling  agencies.  As  of  2012,  Congress   had  appropriated  $588  million  to  NFMC,  with  more  funding  pending  in  early  2013.  HUD’s   counseling  appropriations  from  fiscal  years  2007  through  2012,  most  of  which  went  to   foreclosure  prevention,  totaled  $323  million  (Jefferson  et  al  2012).       236   Counselor  Ethics  and  Practice     In  my  analysis,  there  were  four  salient  themes  in  housing  counselors’  ethics  and   practice  relative  to  how  they  worked  to  shape  their  own  and  clients’  dispositions,  and   related  directly  to  my  claim  that  housing  counseling  is  a  venue  for  reshaping  the  substance   of  citizenship  in  the  crisis.  These  are  (1)  setting  expectations  and  boundaries  to  place   responsibility  with  the  client;  (2)  dedication  to  clients,  which  manifested  as  both  accepting   every  client  even  if  they  did  not  have  realistic  expectations,  and  never  giving  up  on  a  client   who  was  proactive;  (3)  treating  counseling  as  consumer  education;  and  (4)  engaging  in   emotional  management  of  clients.  These  cut  across  the  counseling  sessions  I  observed,   participated  in  training  about,  and  discussed  with  representatives  of  nine  agencies.       1) Setting  expectations   To  clearly  differentiate  themselves  from  scammers,  certified  housing  counselors   devoted  themselves  to  limiting  their  clients’  expectations  for  saving  their  houses  from   foreclosure.  Jim  described  how  it  was  important  to  establish  trust  with  his  clients  through  a   forthright  appraisal  of  their  chances:  “[I]f  you  can  prove  that  you'll  do  what  you  say  you   do—I  try  not  to  overpromise—but  I  try  and  be  realistic  too,  because  I  don't  know  what  the   banks  will  do.  I  don't  know  what  their  lender  is  gonna  do.  There's  so  many  reasons  why   they  will  or  won't  get  a  mortgage  modification,  and  I  don't  know  that  up  front.”115       Note  that  he  said  they  will  or  won’t  get  a  mortgage  modification,  not  just  any   foreclosure  prevention.  There  was  broad  consensus  among  all  the  categories  of  people  I   met,  and  those  who  called  Franklin  Street  for  intake,  that  what  homeowners  want  is  a                                                                                                                   115  Interview,  Jim,  April  13,  2011,  Owosso,  Michigan.   237   modification.  In  a  broader  sense,  yes,  they  want  to  maintain  homeownership  but  far  and   away  their  preferred  tool  for  doing  so  was  a  permanent  loan  modification  into  a  30-­‐year,   fixed  rate  mortgage.  Donna,  the  Franklin  Street  client  whose  investor  would  not  grant  a   modification,  was  emphatic  that  “all  I  want  is  a  30-­year,  fixed-­rate  loan,”  punching  each   adjective  for  effect.  She  had  not  decreased  her  expectations  throughout  two  years  of   applications  and  denials.   Indeed,  most  homeowners  who  sought  housing  counseling  did  so  because  they   wanted  lower  mortgage  payments  (Jefferson  et  al  2012).  Housing  counselors  presented  a   full  range  of  loss  mitigation  options,  described  in  Table  6,  to  their  clients.  Jim  found  that  as   clients  became  embroiled  in  the  loss  mitigation  process,  they  experience  “the  realization  of   what  was  realistically  possible  for  them,  in  going  through  this  process,  drops  all  that  stuff   off  as  they're  moving  through  it.”116  Program  administrators  emphasized  the  importance   not  only  of  discussing  possible  home-­‐saving  strategies,  that  housing  counselors  also  “do   transition  talk  up  front.  It’s  not  a  loan  modification.  But  they  still  submit  the  request.”117   These  discussions  show  the  contours  of  the  shrinking  content  of  citizenship  rights  for   distressed  homeowners.  According  to  Cindy,  “we  try  to  avoid”  the  unitary  focus  on  loan   modifications.  This  is  at  odds  with  homeowners’  desires,  several  housing  counselors’  sense   of  the  best  option  for  their  clients,  and  economic  rationality  (who  would  not  want  a  lower   monthly  payment?).118                                                                                                                     116  Ibid.   117  Interview,  Cindy,  April  11,  2011,  Lansing,  Michigan.   118  In  practice,  early  loan  modifications  tended  raise  a  homeowner’s  mortgage  payment   (HUD  2010:45).  Loan  modifications  may  raise  the  overall  amount  homeowners  repay  and   their  monthly  payments.  This  happens  if  a  lender  or  servicer  adds  the  past  due  payments   238   Homeowners  were  likely  most  familiar  with  loan  modifications  as  foreclosure   resolution  because  of  their  high  public  profile—yet  I  suggest  this  misses  the  point.   Homeowners  facing  foreclosure  confront  the  very  real  possibility  of  losing  their  status  as   privileged  citizens.  As  the  federal  government’s  signature  intervention  in  the  crisis,  loan   modification,  then,  became  a  marker  of  citizenship  in  a  time—both  personal  and  national— when  the  substance  of  citizenship  rights  was  being  evacuated  through  austerity  politics  (c.f.   Maskovsky  2012;  Clarke  2012).     Evelyn  Dagnino  (2003)  has  suggested  that,  fundamentally,  citizenship  is  the  right  to   have  rights.  I  suggest  that  demands  for  loan  modifications  even,  or  especially,  when  one   could  otherwise  afford  the  monthly  payment  is  a  subtle  way  that  distressed  homeowners   attempted  to  re-­‐identify  as  recognized,  highly  valued  members  of  the  nation.  Yet,  the   structure  of  their  encounter—mediated  by  non-­‐profit  counselors  and  private  lenders— perennially  distanced  them  from  that  possibility.  One  housing  counseling  program  director   summarized  the  tension  between  clients’  citizenship  demands  and  her  agency’s  position   betwixt  and  between  the  state  and  private  sector:     If  they  thought  that  we  work  for  their  lender,  they  would  be  unhappy  with  us.   They  would  be  resistant  maybe  to  provide  information.  They’d  be  combative   sometimes,  which  even  though  we’re  not  related  to  them,  sometimes  they   are.  Because  they’re  under  a  lot  of  stress.  If  we’re  the  government,  we  get  a   lot  of  calls  asking  for  rescue  funds—‘I  need  money  to  pay  my  mortgage,  or   I’m  applying  for  the  HAMP,  the  making  home  affordable  through  you’—which   is  not  the  case.  So  we  have  to  remind  them  that  we’re  not  the  government.119                                                                                                                     (arrears)  and  late  fees  onto  the  principal  owed  on  the  loan  and  re-­‐capitalizes  it.  In  this  case,   back  principal,  interest  and  fees  become  part  of  a  larger  loan  principal,  on  which  of  course   the  borrower  pays  interest.  If  this  adjustment  does  not  also  extend  the  term  of  the  loan— for  example  from  30  to  40  years—it  raises  monthly  payments.     119  Interview,  Denise,  April  14,  2011,  Lansing,  Michigan.   239   By  demanding  loan  mods  under  the  federal  program,  homeowners  demanded  the  state's   allegiance  and  support,  while  eschewing  a  citizenship  of  dependency.  Housing  counselors’   expectation  setting,  in  turn,  diminished  the  possible  demands  on  state  resources,  keeping   the  state  distant  from  homeowners,  protecting  it  from  citizens  clamoring  for  the  right  to  a   loan  modification.  Although  clients  may  have  fused  (confused)  the  state’s  room  to   maneuver  with  that  of  banks,  housing  counselors  reinforced  the  division  of  authority   between  the  state  and  market.  As  Denise  continued,     Not  only  are  we  not  the  government,  but  to  apply  for  that,  you’re  gonna  go   through  your  lender.  You’re  not  gonna  go  through  the  government  for  that   program.  So  I  think  when  they  think  that  we’re  a  government  entity,  they   demand  more.  They  feel  that  they  have  the  right  to  receive  whatever  it  is  that   they’re  looking  for  (my  emphasis).120     In  effect,  housing  counseling  not  only  mediated  the  pre-­‐foreclosure  process  for  clients,  it   created  a  mediated  citizenship,  where  the  state  was  both  present  and  inaccessible.       2)  “More  informed  decisions  as  consumers”     Housing  counselors  did  not  often  directly  tell  clients  what  to  do,  especially  regarding   a  final  decision  on  keeping  or  giving  up  their  homes.  Bluntly,  counselors  did  not  want  their   agencies  to  be  sued  if  they  suggested  a  course  of  action  that  goes  sour.  Their  legalistic   rationale  was  embedded  in  a  wider  field  of  expert  knowledge  based  on  eschewing  final   authority.  It  is  an  effect  of  the  way  freedom  of  choice  is  the  preferred  method  for  making   people  into  responsible  subjects.  Positively  framed,  counselors  equate  respect  for  choice  to   respect  for  personhood.  Denise,  a  housing  counseling  agency  director  explained  to  me  that   We  have  to  be  careful  with  the  advice  that  we  give  because  as  a  counselor  we   help  people  find  solutions  to  their  problems  or  to  the  situations,  but  we  have                                                                                                                   120  Ibid.   240   to  help  them  find  the  answer.  We  can’t  tell  them  the  answer.  Because  after  all,   who  are  we  to  tell  them  whether  or  not  they’re  ready  for  something  or   whether  or  not  in  a  foreclosure  prevention  case,  you  absolutely  need  to  sell   your  house,  that’s  your  only  option—we  can’t  make  that  decision  for  them...If   you  look  at  the  various  different  counseling  roles,  let’s  say  a  marriage   counselor  or  a  family  counselor—in  that  counseling  capacity,  those   counselors  are  not  telling  their  clients  what  to  do  either.  They’re  helping   them  gather  information,  talk  through  the  situation,  and  in  the  end,  at  the   end  of  the  day,  helping  that  person  make  better  decisions.  And  that’s  what  we   do.  We  help  them  make  more  informed  decisions  as  consumers.  But  we  can’t   tell  them  what  to  do.121     Counselors  located  themselves  simultaneously  as  experts  and  as  nobodies,  for  as  Denise   said,  “who  are  we  to  tell  them  whether  or  not  they’re  ready  for  something.”  Most   counselors  had  cautionary  tales  about  how  breaking  this  professional  taboo  went  poorly,   examples  then  marshaled  as  evidence  of  the  importance  that  they  not  claim  to  know  better   than  the  client.  When  Jim  first  started  counseling  in  a  rural  community  east  of  Lansing,  he   “got  excited  for”  a  family  who  was  offered  a  loan  modification  that  he  encouraged  them  to   take.     But  I  didn't  realize  that  was  the  family  that  had  all  the  repair  issues  in  the   home.  And  they  were  seeing  it  as  unaffordable  moving  forward.  And  they  had   already  turned  the  corner  in  their  whole  process  of  dealing  with  it  for   whatever  decade  that  they  had  dealt  with  the  instability  of  their  finances  or   whatever  they  were  dealing  with.  I  didn't  have  all  that  back-­‐story.  I  was  just   seeing  the  great  structure  that  they  were  gonna  get  to  help  them,  and  so  that   made  me  realize  that  they're  the  ones  that  have  to  take  that  information  and   really  choose  what's  best  for  them.122     Professional  wisdom  returned  to  the  issue  of  choice-­‐as-­‐empowerment  and  information  as   the  panacea.  When  counselors  did  make  suggestions,  they  hedged:  “This  is  not  the  best                                                                                                                   121  Ibid.   122  Interview,  Jim,  April  13,  2011,  Owosso,  Michigan.   241   mod  I’ve  seen  but  it’s  the  best  we’re  going  to  get.  I’d  take  it.  It’s  up  to  you  but  I  think  this  is  a   decent  offer.”123  The  way  they  try  to  help  people  see  their  options  is  to  do  the  budgeting   exercise  to  look  at  the  money  coming  in  and  money  going  out  and  let  that  be  the  method  of   convincing  the  person  of  their  best  choice.  Jim  continued  that  if  homeowners  are  “making   an  informed  choice,  and  they've  explored  all  of  their  options,  then  their  direction  is  gonna   already  almost  be  pre-­‐determined.”124     These  strategies  represent  an  important  leitmotif  in  American  governance  based  on   rational  choice  economic  theory.  Information  economics  was  a  monumental  breakthrough   in  economic  theory  in  the  1970s.  The  field  is  based  on  the  recognition  that  when  people   have  different  amounts  and  qualities  of  information  (information  asymmetries),  the  people   involved  in  the  exchange  are  not  on  an  equal  playing  field  and,  therefore,  the  person  with   less  information  cannot  make  a  rational  choice.  The  proposition  then  is  that  if  people  can   get  full  information,  they  will  make  rational  economic  choices.     As  the  federal  government  began  to  adopt  a  more  free  market  orientation  beginning   in  the  1980s,  information  economics  was  implicit  in  the  worldview  policymakers  brought   to  their  strategies.  In  mortgage  lending,  one  can  point  to  the  expansion  of  mortgage   disclosure  requirements  as  the  primary  means  of  consumer  protection  (HUD  2010).  The   assumption  is  that  as  consumers  have  access  to  this  fuller  range  of  information,  they  will  be   able  to  rationally  choose  a  loan  that  is  non-­‐predatory  and  best  suited  to  their  financial   health.  However,  the  opacity  of  the  most  predatory  mortgages  that  were  issued  in  the  early                                                                                                                   123  Fieldnotes,  April  12,  2010.   124  Interview,  Jim,  April  13,  2011,  Owosso,  Michigan.   242   2000s  often  means  that  even  housing  counselors,  some  of  them  former  loan  officers,  have   trouble  parsing  the  terms  of  a  loan.       3)  Dedication     Ensuring  clients’  trust  was  a  priority  for  housing  counselors  and  one  of  the  main   ways  they  did  so  was  through  an  ethic  of  selfless  dedication.  Jim  felt  that  he  was     pretty  fortunate  that…I  have  a  good  clientele  base…Here,  there’s  a  lot  more   interaction  because  it’s  much  more  involved.  I  think—we  set  the  expectation   up  front.  You  know?  You  talk  to  them  for  a  while,  they  feel  comfortable  with   who  you  are.  They're  kind  of  entrusting  you  with  their  whole  life,  basically,   or  at  least  a  snapshot  of  what  they're  willing  to  show  you.  But  when  you're   looking  at  someone's  financials,  you're  seeing  their  spine  basically.  So  you   develop  that  relationship  right  up  front.125     Likewise,  Juanita  was  fond  of  telling  me  how  negotiating  with  servicers  was  like  “going  to   bat  with  your  hands  tied  behind  your  back.”126  That  predicament  was  sometimes  made   worse  for  her,  and  other  counselors,  by  clients  who  were  non-­‐compliant,  such  as  by  not   supplying  all  their  financial  paperwork  or  worse,  by  hiding  some  of  their  assets  from  the   counselor’s  budgetary  scrutiny.     On  her  30-­‐minute  commute  into  and  home  from  work  nearly  every  day,  Tami,  for   example,  was  taking  phone  calls  from  her  clients—both  to  reinforce  mutual  trust  and   simply  to  get  through  her  perpetual  backlog  of  voicemail.  Unnecessary  foreclosure  was  the   most  troubling  possible  outcome  as  far  as  Tami  was  concerned.  In  my  last  interview  with   her,  she  made  clear  how  much  the  prospect  of  unnecessary  foreclosures  troubled  her.   “Everybody  that  comes  here  I  wanna  help,  and  I  probably  shouldn’t,  and  if  somebody  gets                                                                                                                   125  Interview,  Jim,  April  13,  2011,  Owosso,  Michigan.   126  Fieldnotes,  April  14,  2010.   243   denied,  I  don’t  just  take  no  for  an  answer—I  see  if  there’s  any  possible  way,  because  I  don’t   feel  like  I’ve  done  my  job  to  the  best  if  I  don’t.  So  then  it  makes  it  even  more  busier,  that  I   don’t  really  have  time  for,  but  I  would  hate  to  see  somebody  lose  their  house  that  really   could  have  kept  it.  That’s  disturbing  to  me.”127     Yet  the  very  ethics  and  practices  that  I  saw  counselors  most  fervently  practicing   were  those  that  program  directors  and  industry  leaders  dismissed  as  excessive.   “Counselors  throw  a  hail  Mary  pass,”  one  former  counselor  turned  program  manager  said,   when  they  submit  loan  modification  applications  for  clients  without  the  numbers  to  sustain   it.  There’s  “no  math,  no  analysis,”  her  colleague,  another  former  counselor,  concurred.  This   duo  expounded  on  the  affective  weaknesses  that  lead  counselors  into  unnecessary  work:   “They  sit  face-­‐to-­‐face  with  someone  and  feel  they  have  an  obligation  to  submit  and  prepare   all  alternatives.  It’s  possible  counselors  clog  up  the  system  to  appease  clients.”  Instead,   counselors’  process  should  be  “paperwork  to  servicer,  turn  over”  responsibility  to  the   client.128  When  counselors  fail  to  do  that,  they  not  only  increase  their  workload  and   emotional  burden,  they  lose  money  for  their  agencies  because  resubmissions  are  not   eligible  under  the  major  funding  guidelines.     Although  counselors  prided  themselves  on  knowing  lender  and  program  guidelines   better  than  any  other  professionals—a  point  program  administrators  also  emphasized— counselors’  emotional  involvement  with  clients  may  lead  them  to  “justify  asking  for  a  loan   modification  even  if  the  client’s  not  qualified  to  buy  the  client  time.  [But]  this  is                                                                                                                   127  Interview,  Tami,  October  22,  2010,  Lansing,  Michigan.   128  Interviews,  Cindy,  Laura  and  Charlene,  April  11,  2011,  Lansing,  Michigan.   244   business.”129  This  tension  between  “emotion”  and  “math”  undergirds  a  broader  push  for   professionalization  in  the  field  that  is  carried  out  through  the  discourse  of  emotional   detachment.       4)  Confining  Distress:  Housing  Counselors  as  Emotional  Managers       Housing  counselors,  while  advocates  for  homeowners’  best  interests,  also  engaged   in  managing  and  constraining  their  emotions.  Facing  foreclosure  is  an  intensely  emotional   and  volatile  state;  counselors  knew  this  and  were  divided  about  how  to  address  their   clients’  feelings.  There  was  agreement,  though,  that  letting  too  much  emotion  surface  in  the   counseling  encounter  could  be  problematic.  The  best  practices  taught  by  industry  leaders   are  to  not  emotionally  engage  with  clients  because  to  do  so  would  derail  the  focus  of  the   session  and  detracts  from  its  quality  as  a  business  encounter.  In  June  of  2010,  I  attended  a   weeklong  training  provided  by  NeighborWorks  America,  a  Congressionally-­‐chartered  non-­‐ profit  and  one  of  the  largest  organizations  in  the  housing  counseling  industry.  About  35   counselors  from  across  Michigan  gathered  in  a  basement  conference  room  at  MSHDA.  We   sat  at  small  conference  tables  scattered  throughout  the  room,  about  seven  of  us  around   each  table.  The  setup  facilitated  small  group  work  for  certain  exercises  and  made  the  room   feel  less  formal,  less  oriented  to  lecture.  The  lead  trainer,  Frank,  had  flown  in  from   Washington,  D.C.,  and  the  assistant  trainer,  Daryl,  had  come  from  Philadelphia.  A  major   theme  for  Frank  over  the  course  of  the  five  days  was  that  counselors  need  to  set   expectations  with  their  clients.  He  and  the  organization  as  a  whole  are  advocates  for   standardizing  and  professionalizing  the  industry.  In  2007,  NeighborWorks  promulgated                                                                                                                   129  Interview,  Adrian,  April  11,  2011,  Lansing,  Michigan.   245   the  first  National  Industry  Standards  for  Homeownership  Education  and  Counseling;   organizations  that  have  adopted  the  national  standards  and  corresponding  code  of  conduct   “can  be  trusted  to  provide  consistent,  high  quality  advice”  (NeighborWorks  America  n.d.).   In  the  training,  Frank  exhorted  counselors  to  be  less  emotionally  invested  with  their   clients.  He  said  that  counselors  tend  to  see  their  roles  as  big  brothers  or  big  sisters—but   they  are  not.  Counselors  should  have  “empathy  not  sympathy.  Don’t  make  it  personal   because  then  it’s  hard  to  tell  them  they’re  going  to  lost  their  house.”  Testing  the  room  on   the  proposition  of  emotion  management,  he  asked,  “What  do  you  do  if  someone  cries  in   your  office?”  A  woman  on  the  other  side  of  the  room  from  me  replied,  “Cry  with  them,”  to   which  there  were  some  murmurs  of  agreement.  Frank,  who  used  to  be  the  director  of  a   counseling  agency,  had  a  counselor  there  who  would  cry  with  her  clients.  If  the  counselor   herself  cried,  “I  know  I’ve  lost  her.”  Once  a  client  began  to  cry,  it  was  hard  to  get  the   meeting  back.     As  part  of  the  professionalization  push,  Michigan  agencies  had  become  more   interested  in  hiring  counselors  who  had  backgrounds  in  loan  underwriting,  real  estate,  or   finance  than  in  social  work  or  human  services.  Before  the  foreclosure  crisis,  program   directors  had  the  opposite  belief—“we  can  teach  you  math.”130  Yet,  emotional   management  remained  one  of  the  primary  functions  counselors  must  perform.  They  were   actively  involved  in  shaping  their  clients  toward  a  personhood  that  could  embrace  change,   but  was  also  unfailingly  committed  and  organized,  enterprising,  and  resilient—precisely   the  kind  of  self-­‐responsible  individual  conjured  up  in  the  American  dream  ideology   (McGinnis  2009).                                                                                                                   130  Interview,  Laura,  April  11,  2011,  Lansing,  Michigan.   246   There  was  tension,  though,  among  the  ethics  and  practices  I  have  described  here.   Housing  counselors  understood  their  commitments  to  serve  any  client,  even  if  their  case   was  not  “a  slam  dunk,”  and  willingness  to  resubmit  innumerable  modification  requests   evinced  compassion  and  an  ethic  of  service  that  was  indispensable  to  high-­‐quality   counseling.  Yet,  industry  leaders  exhorted  them  to  erect  emotional  barriers  between   themselves  and  their  clients—and,  indeed,  around  clients’  own  emotions—and  criticized   instances  where  there  was  “no  math,  no  analysis.”  Even  as  counselors  felt  burdened  by  all   their  unbillable  work  and  had  misgivings  about  their  minority  of  undeserving  clients,  they   continued  to  engage  with  homeowners’  quest  for  a  state-­‐sanctioned  modification,  the  goal   seal  of  a  salvaged  claim  to  be  a  prized  political-­‐economic  subject.     It’s  After  Hours:  The  Limits  of  the  Law     When  I  met  Timm  and  Maria  Smith  in  late  summer  of  2010,  they  were  living  with   their  two  children,  ages  eleven  and  eight,  in  a  twelve-­‐by-­‐fourteen  foot  tent  designed  for   hunters’  use  at  seasonal  camps.  The  tent  was  pitched  in  a  patch  of  woods  on  the  twenty-­‐ acre  farm  they  owned  until  it  was  foreclosed.  They  were  evicted  from  the  house  and  all  the   outbuildings  were  locked  in  May  of  2009.131  Through  a  series  of  legal  and  illegal  actions,   only  a  portion  of  the  property  was  foreclosed.  The  Smiths  had  an  informal  truce  with  the   local  law  enforcement  that  let  them  access  the  back  five  acres  of  the  farm;  at  the  same  time,   they  were  in  a  legal  fight  with  the  municipality  over  the  property’s  ownership.     At  the  road,  the  property  was  shielded  by  a  dense  cluster  of  trees  and  there  were                                                                                                                   131  The  foreclosure  sale  was  in  May  2008.  In  Michigan,  residential  homes  have  a   redemption  period  of  six  months;  properties  over  two  acres  have  a  twelve  month   redemption  period  because  they  are  classified  as  farms.     247   “Posted:  No  Trespassing”  signs  on  the  trees  and  open  gate.  The  township  police  hung  the   signs  after  the  eviction.  Slightly  wary—both  to  be  trespassing  and  to  be  following  a  family  I   had  only  just  met  into  the  woods  alone—I  followed  their  green  Camry  a  half  mile  up  the   drive  before  the  homestead  came  into  view.  As  we  toured  the  property,  the  couple  told  me   not  to  worry  about  the  No  Trespassing  signs.  “It's  after  hours…After  five  o'clock  we  can  use   the  rest  of  the  property  so  we  let  the  horses  go  and  graze  over  here  and  everything.”132   The  notion  of  the  property  not  being  foreclosed  “after  hours”  is  an  apt  metaphor  for  how   homeowners  in  this  crisis  experienced  the  state  as  a  bifurcated  entity—alternately   occupying  and  vacating  the  bounds  of  legitimacy.       Legitimacy  emerges  in  conjunction  with  a  pair  of  related  concepts,  efficacy  and  an   absence  of  corruption.  Governing  powers  achieve  legitimacy  when  all  these  qualities  are   present—when  there  is,  according  to  Weber  (1990),  “rules  that  are  rationally  established   by  enactment,  by  agreement,  or  by  imposition…[resting]  upon  a  rationally  enacted  or   interpreted  ‘constitution’…[or]  impersonal  norm”  (294).  Weber’s  insistence  on  impersonal   norms  is  a  contrast  to  corruption  in  the  sense  of  using  public  office  for  personal  gain.   Following  Drexler  (2008),  I  think  of  corruption  more  broadly,  not  just  as  public  officials’   personal  greed,  but  as  distortions  that  make  institutions  incapable  of  carrying  out  their   mandates.  This  brings  me  to  efficacy.  A  state  is  not  a  legitimate  if  its  agents  cannot  produce   their  intended  results.  A  great  topic  of  contention  for  distressed  homeowners  and  the   broader  American  public  continues  to  be  the  slippage  between  the  state’s  failures  owing  to   (1)  corruption  (both  graft  and  distortion)  and  (2)  those  due  to  inefficacy—especially  where   financial  institutions  and  economically  battered  citizens  are  concerned.                                                                                                                   132  Interview,  Timm  and  Maria,  September  22,  2010,  Fenton,  Michigan.   248   The  state  is  not,  of  course,  a  unified  entity  but  an  overarching  concept  and  mode  of   exercising  power  that  appears  more  or  less  coherent  at  different  times  (Abrams  1988;   Trouillot  2001;  Aretxaga  2003).  Homeowners  were  aware  of  the  state  as  multi-­‐layered  and   multi-­‐faceted:  from  the  distinction  between  politicians  and  functionaries  to  different  layers   of  government  that  affected  them  when  they  faced  foreclosure—township  and  city,  county,   courts,  the  state  of  Michigan,  and  federal  government.  Frequently,  when  one  of  these  levels   or  types  of  government  acted  illegitimately,  people  turned  to  other  levels  or  arms  of   government,  retaining  the  ideal  that  “the  state”  in  the  abstract  is  rational  and  legitimate  but   looking  for  the  person  or  office  that  most  closely  aligns  with  their  sense  of  justice.  Nor  is   legitimacy  a  yes  or  no  proposition  but  rather  a  quality  on  a  spectrum  that  people   experience  in  different  arenas.  For  example,  homeowners  struggling  to  pay  their  mortgages   sometimes  felt  that  the  government  (usually  federal)  is  illegitimate  as  a  protector  of   homeowners’  interests  against  those  of  financial  institutions.  Many  of  these  same  people   simultaneously  drew  on  government  benefits  such  as  unemployment  insurance,  food   stamps,  or  Social  Security  and  did  not  feel  the  state’s  actions  to  be  inept  or  illegitimate  in   those  endeavors.  For  homeowners  I  interviewed,  the  state  failed  in  key  ways  to  act   legitimately—that  is,  effectively  and  without  corruption.  In  the  rest  of  this  section,  I  present   a  case  study  of  the  Smiths’  farm  as  a  way  to  talk  about  the  challenges  and  limits  of  the   state’s  legitimacy,  the  law,  and  experiences  of  the  state’s  power  in  the  foreclosure  crisis.     Evicted   Timm  and  Maria  bought  the  twenty-­‐acre  property  in  1989  through  a  $30,000  land   contract.  Land  contracts  are  a  type  of  seller-­‐financed  real  estate  transaction  that  function   249   like  a  rent-­‐to-­‐own  agreement.  An  owner  agrees  to  sell  a  property  to  the  buyer  but  retains   the  title  to  the  property  until  the  buyer  pays  it  off  in  full.  Instead  of  using  a  mortgage  to  pay   the  full  amount  right  away,  the  buyer  makes  installment  payments  directly  to  the  seller.   Usually  land  contract  buyers  make  a  down  payment,  contracts  are  shorter  than  traditional   mortgages,  and  there  is  almost  always  a  balloon  payment  at  the  end  of  land  contract.  In   Timm  and  Maria’s  case,  Maria’s  parents  paid  off  the  land  contract  four  years  after  they   entered  it.  Maria’s  parents  kept  usufruct  on  five  of  the  acres  near  the  road.  That  means  that   in  1993,  the  extended  family  owned  the  property  free  and  clear.       Maria  and  Timm  ended  up  with  a  mortgage  after  they  invited  Timm’s  sister  Michelle   and  her  husband  Frank  to  live  on  the  farm  after  a  medical  emergency.  Timm  and  Maria   were  living  in  a  cabin  he  built  on  the  property,  paying  $300  a  month  on  the  loan  for  it.   Michelle  bought  a  large  modular  home  for  herself  and  Frank  to  live  in,  which  they  financed   with  a  mortgage  on  the  full  twenty  acres  of  property.  When  Michelle  and  Frank  left  the   farm  after  two  years,  they  transferred  the  property  title  back  to  Timm  and  Maria,  who   moved  into  the  house  left  by  Michelle  and  Frank.  Michelle  demanded  to  get  paid,  forcing   Timm’s  hand  to  get  “a  mortgage  that  was  more  than  I  could  afford.”       The  mortgage  they  assumed  was  more  than  they  could  afford  even  though  Timm  and   Maria  were  making  upwards  of  $90,000  a  year  on  his  earnings  as  a  journeyman   homebuilder.  To  address  the  affordability  problem,  they  refinanced  with  the  now-­‐defunct   Republic  Bank,  mortgaging  only  the  ten  central  acres  of  land  around  the  house.  The  sketch   below,  which  Maria  drew  for  me  on  a  sheet  of  notebook  paper,  shows  how  the  L-­‐shaped   piece  of  land  was  divided  up  in  the  mortgage.  Maria's  parents  owned  five  acres  at  one  edge   of  the  property  and  live  there;  Timm  and  Maria  have  another  five  acres  at  the  rear  of  the   250   property.  The  mortgage  was  taken  out  on  the  ten  acres  in  the  middle  of  the  property.  Timm   understood  this  as  a  safety  mechanism  for  his  family:  “So  at  least  five  was  paid  off  in  case   anything  happened…the  [mortgage  company]  did  the  ten  acres  and  the  two  fives.”  Instead,   this  safety  net  proved  to  be  an  illegal  mortgage  that  had  not  been  sorted  out  nine  years   later.   Figure 3. Sketch of Farm Layout Sketch by Maria Smith. Note: Text reads, from top to bottom, left to right: River; ours; undeveloped; mortgaged 10 acres; 5 acres my dad’s.   The  core  problem  with  mortgaging  “the  ten  and  two  fives”  is  that  all  twenty  acres   were  recorded  as  one  land  parcel  in  the  county  records  office.  Each  land  parcel  is  assigned   a  unique  parcel  identification  number  for  tax  purposes.  Property  transfers,  mortgages,  tax   collection,  and  other  actions  on  land  can  only  legally  occur  on  an  entire  parcel.  Only  county   officials  can  legally  split  parcels—that  is,  mortgage  officers  cannot.  When  parcels  are  split,   251   each  new  one  is  assigned  a  new  property  identification  number  and  legal  description.   When  Sarah  and  I  bought  the  house  between  us,  we  submitted  a  lot  split  application  and   had  the  new  half-­‐lot  added  to  the  legal  description  of  our  original  lot.       The  Smiths  could  have  legally  mortgaged  “the  ten  and  two  fives”  separately  if  they   had  applied  for  a  parcel  split  before  they  refinanced  the  mortgage.  Splitting  the  twenty-­‐acre   farm  would  have  entailed  filling  out  an  application  to  the  county  board  for  the  splits,   writing  a  justification  for  how  and  why  they  wanted  to  split  the  parcels,  and  waiting  for   simple  bureaucratic  approval.  Had  they  gotten  legal  approval,  the  Smiths  may  have  drawn   the  boundaries  differently  than  they  were  de  facto  drawn,  since  only  the  contested  ten   acres  had  road  access  (hence  their  daily  trespass).  They  would  have  still  legally  owed  the   amount  of  the  original  mortgage  and  needed  to  arrange  with  that  company  to  either  take   out  loans  or  come  up  with  cash  to  cover  the  outstanding  balance  on  the  original  mortgage.   They  could  have  then  paid  off  some  of  the  acres  in  full  or  held  separate  mortgages  on  the   pieces  of  the  farm.     Instead,  on  the  advice  of  the  mortgage  officer,  the  couple  mortgaged  ten  acres,   choosing  ten  acres  because  that  was  the  maximum  size  parcel  for  which  Fannie  Mae  will   buy  mortgages  on  the  secondary  market.  The  loan  officer  used  the  parcel  identification   number  on  record  for  the  full  twenty  acres  but  wrote  the  loan  corresponding  to  the  central   ten-­‐acres.  Writing  a  mortgage  on  half  the  property  was  technically  illegal  and,  with  the   foreclosure  of  the  farm,  has  led  to  a  protracted  legal  battle.   Since  the  land  was  not  legally  split,  the  mortgage  should  not  have  been  allowed  to  go   through  because  it  did  not  correspond  to  the  whole  parcel.  The  bank’s  officer   misrepresented  the  mortgage  to  the  Smiths,  to  Fannie  Mae,  and  to  the  title  insurance   252   company.  Title  insurance  is  a  kind  of  insurance  that  mortgage  companies  require   borrowers  take  out  when  they  purchase  property  and  protects  the  lender  from  any  losses   they  incur  if  there  are  competing  legal  claims  on  a  piece  of  property.  Title  insurance  agents   conduct  a  search  of  county  records  of  transfers  of  the  mortgaged  property  to  ensure  there   are  no  other  liens  or  competing  claims  on  the  land.  In  industry  parlance,  they  do  due   diligence  to  ensure  that  there  is  “clean  title,”  meaning  the  parties  to  the  mortgage  have  the   legal  right—and  the  sole  legal  right—to  enter  into  contracts  on  the  property.  If  not,  the  title   is  “clouded,”  meaning  that  multiple  agents  have  legitimate  claims  on  the  land.133     No  one  involved  in  the  Smiths’  transaction—mortgage  officer,  bank’s  underwriting   department,  title  insurance  company,  appraiser,  county  register,  Fannie  Mae,  and  the   Smiths—caught  the  fraud  at  the  root  of  this  contract.  If  the  title  insurance  company  had   examined  the  mortgage  in-­‐depth,  the  agent  might  have  realized  that  the  mortgage  did  not   correspond  to  the  whole  property—and  that  therefore  the  Smiths  had  a  stake  on  the  back   five  acres  and  her  parents  had  a  stake  on  the  front  five  acres.  Maria  went  along  with  the   mortgage  officer’s  suggestions  because  “we  didn’t  know  anything  and  had  total  trust   because  they’re  an  institution,  a  bank.”  Discovering  fraud  in  her  mortgage  contract  eroded   Maria’s  confidence  in  the  legitimacy  of  financial  institutions  and  state  agencies  that  should   enforce  laws  to  prevent  fraud.  In  a  qualitative,  interview-­‐based  study,  Ross  (2009)  found   that  homeowners  who  have  faced  foreclosure  almost  all  lost  trust  in  mortgage  and  financial   institutions.  While  that  was  also  clearly  the  case  for  families  I  interviewed  in  Michigan— and  of  concern  to  housing  professionals—disillusion  did  not  end  with  financial  institutions,                                                                                                                   133  A  title  can  also  be  clouded  if  the  owners  are  delinquent  on  their  property  taxes.  If  back-­‐ taxes  are  owed,  the  county  has  a  legal  claim  to  foreclose  to  recoup  the  taxes.   253   but  extended  to  state  institutions  that  are  supposed  to  act  in  the  best  interests  of  citizens.   Disillusion  with  the  state  has  worsened  through  their  post-­‐foreclosure  legal  battle.   In  2004,  Timm  broke  his  back.  The  next  year,  he  had  a  stroke  at  age  48.  Although  the   couple  had  been  able  to  afford  the  smaller  mortgage,  Timm’s  medical  bills  and  inability  to   work  caused  the  family  to  get  behind  on  the  mortgage  in  2007.  In  2008  they  stopped   paying  entirely  and  the  county  sheriff  foreclosed.  The  Smiths  continued  to  live  in  the  house   for  the  entire  one-­‐year  redemption  period  that  is  offered  to  farm  properties,  until  eviction   in  May  2009.  Before  the  eviction,  Maria  and  Timm,  “basically  just  had  to  drag  everything   like  500  feet”  to  the  back  five  areas  of  the  property.  “It's  ridiculous  but  we  had  to  do  it,"   Maria  told  me  as  we  toured  the  property.  Behind  the  now-­‐locked  barn  that  Timm  built  just   before  he  broke  his  back  were  strewn  household  goods,  family  heirlooms,  and  equipment   for  working  the  land.  Aside  from  taking  their  personal  belongings,  the  Smiths  left  the  house   as  intact  as  possible,  including  the  relatively  new  kitchen  appliances.  When  the  sheriff’s   deputies  and  eviction  crew  arrived,  they  roughly  tossed  any  remaining  items,  including  the   new  refrigerator,  into  a  construction  dumpster,  effectively  ruining  them.  Maria  did  not   realize  she  might  be  entitled  to  keep  the  appliances,  even  if  she  had  some  place  to  store   them.   Waste  and  household  destruction  have  a  strong  moral  undercurrent  in  foreclosures.   There  is  a  lot  of  discourse  about  foreclosed  homeowners  vandalizing  their  houses  before   eviction  to  vent  their  anger  and  exact  a  small  amount  of  revenge  on  the  banks.  Several   homeowners  I  interviewed  mentioned  leaving  their  homes  in  good  condition  as  a  matter  of   dignity.  That  Maria  and  Timm  left  the  home  in  good  condition  with  quality  appliances  for   254   the  next  owner—only  to  have  them  trashed  and  wasted  by  the  county’s  clean-­‐up  crew— was  a  small  but  lingering  insult.     Of  all  the  losses  that  investors  incur  as  a  result  of  foreclosure,  preservation  and   maintenance—which  includes  repairing  damage  as  well  as  code  compliance  upkeep  like   mowing  the  lawn—account  for  only  9  percent  of  financial  losses  (Cutts  and  Merrill  2008).   Damaged  real  estate-­‐owned  (REO)  properties  accounted  for  14  percent  of  home  sales  in   March  2010,  according  to  a  survey  of  real  estate  market  conditions,  meaning  that  86   percent  of  foreclosed  properties  are  not  damaged.134  A  significant  portion  of  property   damage  occurs  after  homeowners  are  evicted—most  often  when  people  strip  out  the   copper  piping  to  sell  as  scrap  metal.  When  we  bought  the  house  next  door,  one  of  the   teenaged  boys  who  hung  out  in  the  neighborhood  knocked  our  door  to  ask  what  we  were   planning  to  do  with  the  house.  When  I  told  him  we  planned  to  tear  it  down,  he  asked  if  we   would  mind  if  he  took  the  pipes  for  scrap,  if  we  were  not  planning  on  selling  them   ourselves.  To  save  him  the  trouble  of  kicking  in  the  back  door  or  a  window,  I  lent  him  the   keys.  During  their  ordeal,  Timm,  too,  learned  what  a  substantial  contribution  scrap  metal   can  make  to  people’s  livelihoods.  “We  needed  the  money  so  bad,”  Timm  scavenged  the   copper  from  a  piece  of  his  own  equipment,  netting  one  hundred  and  forty-­‐eight  pounds  of   copper,  for  which  he  got  $468  at  the  scrap  yard.     I  thought  I  was  going  to  be  the  only  person  there  with  a  hundred  and  fifty   pounds  of  copper  but  four  people  came  at  the  same  time  I  did—all  three  of   ‘em  had  as  much  or  more  copper  as  I  did.  It  was  the  copper  piping  from  the   houses  and  everything  else  they  could  get  from  Flint  and  the  surrounding                                                                                                                   134  National  Mortgage  Professional.  2010.  “Survey  finds  nearly  50  percent  of  home   purchases  are  distressed  properties.”  March,  22,  2010.  Electronic  document  available  at:   http://nationalmortgageprofessional.com/news16738/survey-­‐finds-­‐nearly-­‐50-­‐percent-­‐ home-­‐purchases-­‐are-­‐distressed-­‐properties.  Accessed  December  30,  2011.   255   area.  The  people,  in  order  to  survive,  are  going  into  the  abandoned   buildings—vacated  buildings—and  stripping  them  and  then  turning  them  to   make  cash  flow.135     Given  the  small  portion  of  losses  caused  by  homeowners’  vandalism,  in  particular,   the  industry  and  cultural  emphasis  on  homeowners’  vengeful  behavior  is  outsized   compared  to  its  actual  cost.  The  largest  losses  are  on  unpaid  interest  (24  percent),  resale   transaction  costs  such  as  realtor  commissions  and  incentives  offered  to  new  buyers  (21   percent),  and  loss  of  unpaid  principal  that  is  not  recouped  at  resale  (20  percent)  (Cutts  and   Merrill  2008).  Mortgage  servicers  and  investors  have  developed  a  range  of  strategies  to   help  minimize  their  institutions’  losses  on  foreclosures  but  some  are  inevitable.  One   strategy  offered  by  servicers  to  prevent  homeowners  from  vandalizing  their  properties  is   “cash  for  keys”  programs  that  help  pay  foreclosed  owners’  moving  costs—provided  they   have  not  vandalized  the  home  before  leaving.  Willful  promotion  of  this  caricature  may  be  a   further  arm  of  lenders’  and  policymakers’  shaming  of  homeowners  as  a  loss  mitigation   strategy.  Instead,  allowing  distressed  homeowners  to  remain  in  their  properties—either   through  foreclosure  mitigation,  the  redemption  period,  or  converting  them  into  renters—is   a  potential  strategy  to  benefit  resident  families,  the  neighborhood,  and  lenders.  In  fact,   because  of  the  extent  of  abandoned  and  derelict  properties  in  Detroit,  the  city  created  a   pilot  program  (Retaining  Occupancy  on  Foreclosure,  ROOF)  to  help  foreclosed   homeowners  and  preserve  the  quality  of  their  housing  stock.       Once  Timm  and  Maria  were  out  of  the  house,  they  pitched  their  tent  in  a  cluster  of   trees  just  beyond  the  field  with  most  of  their  remaining  belongings.  Nearby  was  parked  a   recreational  vehicle  (RV)  where  they  had  slept  in  beds  until  the  RV’s  roof  sprang  a  leak.                                                                                                                   135  Interview,  Timm  and  Maria,  September  22,  2010,  Fenton,  Michigan.   256   Timm  was  working  to  fix  it  but  when  I  first  went  to  the  farm,  the  family  was  using  the  RV  in   the  daytime  and  for  storage  but  sleeping  in  their  secondhand  tent.  They  also  use  the  RV’s   kitchen—"hook  up  a  generator  and  cook  off  a  hot  plate  when  the  weather's  not  good."   Otherwise,  they  had  set  up  an  outdoor  kitchen  with  a  grill,  camp  stove,  and  bins  for   washing.  Timm  built  shelving  to  hold  some  of  the  kitchen  wares  and  others  were  nailed  to   tree  trunks  and  hanging  on  a  line  run  between  trees.  The  RV’s  awning  was  propped  up  and   underneath  it  was  arranged  full-­‐sized  living  room  furniture—a  couch,  two  loveseats,  and   an  ornate  octagonal  coffee  table  with  a  metal  inset.  This  Mexican  table  was  an  inheritance   from  Timm’s  mother.  "Bottom  line,  it  does  look  really  scraggly  and  I  feel  really  vulnerable   because  all  my  stuff's  out  here,  getting  ruined  in  the  weather  but  it  was  either  that  or  pay   huge  bucks  for  a  storage  unit  and  I  just  couldn't  do  it,  so  we  just  simply..."  Maria’s  voice   trailed  off  and  she  scanned  the  field  with  trailers  and  tarps  trying  to  protect  their   belongings  from  the  sun  and  the  upcoming  winter.       The  Legal  Battle   The  foreclosing  sheriff  plays  a  key  role  in  understanding  the  political  economy  of   foreclosures.  In  this  moment,  his  chief  role  is  to  enforce  contract  law  and,  specifically,   private  property  rights.  More  than  any  other  functions,  these  are  the  most  central   mandates  of  a  capitalist  state  (e.g.,  Friedman  2002;  Jessop  1990).  In  the  case  of  foreclosure   sales  and  evictions,  the  sheriff  is  the  state’s  enforcer  of  the  legal  contract  that  requires  the   forfeiture  of  property  back  to  the  lender.     The  Smiths  contracted  their  mortgage  with  Republic  Bank  in  2002  but  the  loan  had   been  sold  several  times  by  the  time  of  foreclosure,  and  it  has  continued  to  be  transferred   257   since  then.  According  to  the  county  register  of  deeds,  after  the  sheriff  sale,  the  property  has   been  registered  to  a  number  of  entities,  according  to  a  county  employee:  “Federal  National   Mortgage,  then  to  PHH  Mortgage—whoever  they  are,”  she  laughed,  apparently  amused  by   the  sheer  number  and  non-­‐identity  of  mortgage  companies.  “Then  the  township  to...this   computer  doesn't  show  the  township  as  the  grantor  [back  to  Timm  and  Maria].  There's   nothing  from  the  township.  But  what's  most  accurate  and  up  to  date  says  it's  deeded  to   Timm  Smith  and  Maria  C.  Howard  Smith."136  The  county’s  records  reflected  the  Smiths’s   lived  experience  of  both  owning  and  not-­‐owning  their  property  because  of  some   amorphous  involvement  of  the  township.     When  the  county  foreclosed  on  the  property,  the  Smiths  and  the  title  insurance   company  learned  that  Timm  and  Maria’s  claim  on  the  back  five  acres  of  the  property   created  a  clouded  title  problem.  At  a  settlement  meeting,  the  title  insurance  agent—who   then  realized  the  company  would  be  on  the  hook  to  pay  Citizens  Bank  a  claim  on  this  large   tract  of  land—offered  to  buy  the  other  acres  from  them  on  the  spot.  In  an  effort  to  avoid  a   large  insurance  payout,  the  agent  continued  to  call  the  Smiths  and  Maria’s  parents  offering   them  a  number  of  deals  that  would  cost  him  less  than  lender’s  insurance  claim.  “I’ll  give  you   $5,000  and  an  easement  to  the  back  five  acres  if  you  give  me  the  front  five,”  Maria   recounted.  Maria  and  Timm  were  resolute  about  not  ceding  those  five  acres,  as  ere  her   parents  with  the  other  five  acres.     Although  under  normal  circumstances  the  property  would  have  gone  back  to  the   bank  after  foreclosure,  the  bank  could  not  accept  it  because  it  cannot  resell  a  piece  of  land   without  clear  ownership  rights.  The  farm  is  therefore  useless  to  the  bank  as  a  foreclosure                                                                                                                   136  Fieldnotes,  October  15,  2011.   258   so  it  deeded  the  property  over  to  the  local  government,  the  township  board.  The  township   then  held  the  clouded  title  to  the  land  but  also  could  not  resell  or  develop  it.  It  was  at  this   point  the  township  posted  the  No  Trespassing  signs  around  the  farm’s  entrance  and  on  the   locked  house  and  outbuildings.     The  Smiths  were  arguing  with  the  help  of  a  lawyer  that  because  there  was  clouded   title,  and  the  mortgage  was  fraudulent  in  the  first  place,  the  township  should  give  the  land   with  the  house  back  to  them.  Further,  they  contended  that  subsequent  to  the  foreclosure,   the  township  took  a  number  of  actions  that  are  illegal  because  the  basic  contract  on  which   they  are  acting  (the  mortgage)  should  be  declared  null  and  void.  Their  petition,  to  which   the  board  did  not  respond,  read,  in  part:     Figure 4. Letter to Township Board To  Holly  Township  Board:     This  property  was  deeded  to  the  township  because  it  has  no  clear  title.  The  banks,   mortgage  co.  &  title  insurance  co’s  lawyers  decided  it  has  no  value  and  gave  it  to  the   township.  Maria  &  Timm  Smith  would  like  to  propose  that  the  township  gift  the  property   to  us  who  have  the  other  part  of  the  parcel.     Currently  there  is  a  house,  two  out  buildings  &  a  barn.  The  house  &  2  out  buildings   have  been  condemned  by  the  building  department.  This  creates  a  financial  &  liability   problem  for  the  township  as  they  will  have  to  tear  it  down  at  their  expense.   Basically  we  feel  that  we  have  a  legitimate  position  to  pursue  total  ownership.  And   our  personal  goal  with  the  property  was  to  develop  it  into  an  organic  mini  farm  C.S.A.  with   canoe  livery  off  the  river.                     Sincerely,                   Maria  &  Timm  Smith         A  separate  group  of  legal  activists  in  Wayne  County  made  a  similar  point  as  the   Smiths  regarding  invalid  legal  instruments.  Yvonne  was  a  housing  activist  who  had  been   active  in  fighting  evictions  in  Detroit  and,  in  partnership  with  attorney  Chiketa,  filed  a   class-­‐action  lawsuit  against  the  sheriff  of  Wayne  County  for  improper  foreclosures  and   259   evictions  carried  out  by  former  sheriff  Warren  Evans.  Having  traced  back  the  names  of   evicting  officers,  they  have  discovered  that  the  sheriff  did  not  properly  deputize  agents  sent   to  evict  Detroit  residents.  Michigan  law  stipulates  that  only  the  sheriff  can  deputize  people   to  act  as  the  sheriff’s  representative  in  foreclosures  and  that  transfer  of  authority  has  to  be   direct  and  in  writing:  either  the  sheriff  has  to  give  authority  to  deputies  directly,  or   delegate  that  authority  to  someone  else  in  writing.  Instead,  Evans  apparently  verbally   authorized  someone  else  in  his  office  to  deputize  more  under-­‐sheriffs  to  help  handle  the   tremendous  volume  of  foreclosures  in  Wayne  County.  It  was  this  breakage  from  the  letter   of  the  law—the  sheriff’s  verbal  authorization  of  a  surrogate  instead  of  written   authorization—that  activists  claimed  invalidated  every  action  going  forward  in  cases   carried  out  by  the  improperly  deputized  agents—sheriff  sales,  foreclosures,  evictions.  “[I]f   you  have  an  invalid  instrument,”  in  this  case  the  improper  deputization,  “then  you  can’t   proceed  forward.”137     Chiketa  acknowledged  that  the  basis  of  the  case  was  a  “hyper-­‐technicality”  but  was   rooted  in  two  convictions  about  legal  rigor:  First,  if  homeowners  were  held  to  the  exact   letter  of  the  law  regarding  foreclosures,  then  the  state  must  be  as  well.  Homeowners  have   been  found  liable  for  a  strict  interpretation  of  foreclosure  law,  for  example,  no  extensions   of  the  six-­‐month  redemption  period  for  extenuating  circumstances.  Second,  if  there  was  no   record  of  transferring  the  sheriff’s  authority  from  himself  to  a  deputy,  then  the  public  has   no  proof  that  the  law  has  been  followed.  If  deputization  rules  are  not  followed,  for  example,   any  actor  can  usurp  the  power  to  act  in  the  state’s  name.  In  the  extreme,  then,  this  could   mean  that  anyone  is  able  to  usurp  the  state’s  authority  by  declaring  themselves  to  have  it.                                                                                                                   137  Interview,  Chiketa,  October  20,  2010,  Detroit,  Michigan.   260   When  the  state  fails  to  follow  the  letter  of  its  laws,  the  state’s  power  is  vulnerable  to   imitation  by  anyone.  Even  though,  as  many  scholars  argue,  the  state’s  ultimate  claim  to   power  is  to  be  able  to  claim  an  exception  to  the  law  (Agamben  1998),  the  legal  cases  I  have   discussed  rejected  foreclosure  proceedings  as  a  legitimate  exception.  These  petitioners   expressed  a  faith  in  the  legal  system  by  using  the  courts  to  challenge  the  state’s  claim  to  act   as  the  embodiment  of  the  law.     In  the  case  of  the  Smiths’  farm,  they  argued  that  the  invalid  instrument  was  the   original  mortgage,  so  any  actions  founded  on  the  authority  of  that  mortgage  are,  therefore,   invalid.  With  the  help  of  a  lawyer,  the  Smiths  filed  a  quiet  title  action,  which  is  a  lawsuit  to   remove  the  cloud  on  the  title  and  the  township’s  claim  to  the  land.  The  township’s  lawyer   has  stated  that  the  township  did  not  have  a  claim  on  the  ten  acres  that  Timm  and  Maria   own  outright  and  only  wanted  to  lay  claim  to  the  ten  acres  given  to  the  township  by  the   lender.138  Seemingly,  then,  the  township  could  propose  a  legal  parcel  split  that  preserves   the  township’s  ownership  in  the  central  ten  acres  and  the  Smith  family’s  ownership  of  ten   disconnected  acres  but  the  Smiths  are  resolutely  not  interested  in  settling  for  less  than   total  ownership  plus  damages  from  the  township.     On  one  hand,  it  would  be  easy  to  say  that  they  are  simply  grabbing  at  a  loophole  that   would  them  get  back  their  property  when  they  did  not,  in  fact,  keep  up  their  end  of  the   mortgage  contract.  This  was  how  the  judge  first  viewed  their  petition.  According  to  Maria,   the  county  judge  who  they  appeared  in  front  of  has  little  patience  with  homeowner’s   petitions  for  exceptions  to  their  foreclosures.  Her  approach  to  foreclosure  is  generally,  “Did                                                                                                                   138  http://www.tctimes.com/news/local_news/holly-­‐township-­‐man-­‐fights-­‐red-­‐tape-­‐to-­‐ keep-­‐property/article_d1166580-­‐f1c7-­‐11e0-­‐b0cd-­‐001cc4c002e0.html   261   you  borrow  money?  Did  you  pay  it  back?  Was  it  foreclosed?  You're  done.'”  Although  Maria   and  Timm  would  undeniably  love  to  regain  ownership  of  their  property  without  repaying   the  outstanding  mortgage  balance,  they—and  a  large  number  of  other  homeowners  and   lawyers—were  making  a  broader  legal  and  ethical  argument  with  their  lawsuits.  The   argument  is  not  about  whether  or  not  homeowners  got  behind  on  their  payments  but   whether  the  state  has  abided  by  its  own  laws.       Recognizing  that  the  state’s  agents  are  representatives  of  the  law  does  not,  however,   mean  accepting  them  as  experts  on  it.  Two  families  I  interviewed,  including  the  Smiths,   argued  that  Michigan  judges  are  not  educated  about  foreclosure  fraud.  Maria  considered   her  attorney  much  more  knowledgeable  than  the  judge,  “but  it  was  [the  judge’s]  first  pass   at  this;  she  doesn’t  really  know  what  to  do  with  the  case…Hopefully  as  she  gets  educated   about  [our  case],  it’ll  go  our  way.”  In  her  initial  ruling,  the  Smiths’  judge  did  not  decide  in   their  favor.  The  judge  dismissed  the  case  with  prejudice  (meaning  the  case  could  not  be  re-­‐ filed),  granting  the  township  quiet  title  to  the  ten  foreclosed  acres.  The  ruling  repeated  the   original  flaw  in  the  mortgage—the  judge  effectively  usurping  the  township’s  authority  to   divide  land  parcels.  Therefore,  with  the  help  of  an  appellate  attorney,  the  Smiths  returned   to  court  a  few  weeks  after  the  judgment  against  them.  As  Maria  described  it:   Suddenly  law  clerk  put  paper  on  judge's  desk  to  clarify  a  point  of  law.  The  judge   looked  at  it  and  said,  “All  lawyers  to  the  hallway  immediately.”  We  heard  a  lot  of   yelling,  the  attorney  for  the  township  arguing  with  law  clerk.  They  came  back  after   we  waited  45  minutes  waiting  for  judge  to  come  back.  The  township’s  attorney  was   visibly  upset  and  red  in  the  face.  She's  big-­‐time,  from  Detroit,  very  scholarly  and   everything.     The  judge  says,  “this  doesn't  happen  very  often  but  I  have  to  reverse  my  ruling.  I   have  made  an  error  in  my  ruling.  I  formally  withdraw  having  issued  quiet  title  to  the   262   township.  The  motion  was  not  before  me  and  I  rescind  my  ruling.”139       Maria’s  understanding  of  the  arguments  was  that  the  law  clerk  finally  went  through  her   attorney’s  filing  and  the  objection  to  the  land  having  never  been  split.  The  clerk  realized   that  the  judge  did  not  have  the  authority  to  split  parcels  from  the  bench.  Maria  and  Timm   have  taken  their  case  to  appellate  court  and  expected  their  case  to  be  ruled  on  sometime   between  October  2012  and  April  2013.140     Aside  from  the  legal  arguments  the  Smiths  made,  their  experience  with  the   township  was  also  one  of  moral  and  political  disillusion.  Timm  contended  that,  headed  by   the  township  clerk,  the  governing  board  was  making  a  land  grab  of  all  twenty  acres  in   order  to  install  a  public  canoe  portage  on  the  Shiawassee  River.  He  argued  that  the  state   and  its  officials  had  lost  even  the  most  basic  moral  compass:       Do  unto  others  as  you'd  have  'em  do  unto  you.  It's  almost  thou  shall  not  kill,   thou  shall  not  covet  your  neighbor's  wife  or  their  goods  or  anything  else!   That's  exactly  what  I'm  up  against  with  Holly  Township.  They're  coveting  my   land  and  they  try  everything  they  do,  short  of  being  caught  by  a  prosecutor,   to  try  and  drive  me  off.  And  as  long  as  that  kind  of  corruption  exists  even  on   the  local  scale,  all  the  way  up  through,  that's  why  I  say  I  have  no  hope.   Because  as  much  as  I  fight  'em,  the  police  back  them.  And  because  they  are   here  to  uphold  the  law,  even  though  the  law  was  created  by  lawyers  simply   to  cost  the  rest  of  us  a  lot  of  money.   Timm  recognized  the  inherent  coercive  power  of  the  state  to  have  the  police  curtail  his   protests.  Yet,  as  he  and  Maria  trespassed  up  their  driveway  every  evening,  they  attested  to   the  limits  and  contradictions  in  the  state’s  power.  In  spite  of  his  cynicism  about  local                                                                                                                   139  Fieldnotes,  October  15,  2011.     140  As  of  April  2013,  no  hearing  had  been  scheduled.   263   elected  officials,  Timm  evinced  a  conflicted  confidence  in  the  possibility  of  justice,  that   these  politicians  may  get  caught  in  malfeasance  by  a  prosecutor.     The  Smiths’  farm  is  an  extreme  case  but  shows,  in  higher  relief  than  normal,  the   confusion  over  the  law  being  played  out  in  the  mortgage  crisis  more  generally.  I  take  their   case,  pressing  up  against  the  limits  of  law  and  citizenship,  to  be  illustrative  of  the  kind  of   contested,  negotiated  reduction  in  the  substance  of  citizenship  rights  in  crisis.       264   Chapter  6:  Conclusion:  Governing  Uncertainty     This  dissertation  is  a  study  of  crisis,  citizenship,  and  state  power  as  refracted   through  foreclosures  and  interventions  against  them  in  Michigan.  I  have  argued  that  the   widespread  loss  of  homeownership  demonstrates  ways  that  the  form  and  locations  of  state   power  and,  consequently,  citizenship  are  changing.  In  this  conclusion,  I  identify  cross-­‐ cutting  themes  in  the  chapters,  and  summarize  the  dissertation’s  contribution  to  the  field.     As  a  result  of  Wall  Street  investment  banks’  subprime  lending,  and  its   reverberations  throughout  all  sectors  of  the  economy,  more  than  4  million  Americans  lost   homes  to  foreclosure  from  2007—2012  and  an  estimated  12  million  were  in  mortgage   distress  of  some  kind.  More  than  500,000  of  the  nation’s  foreclosed  homes—nearly  one  in   eight—were  in  Michigan.  The  bursting  of  the  housing  bubble  inverted  the  conventional   wisdom  about  American  real  estate:  that  prices  would  always  rise,  that  it  would  always   build  wealth  for  homeowners,  that  there  would  never  be  a  nationwide  collapse.  Through   foreclosures  and  falling  housing  values,  Americans  have  lost  an  estimated  total  of  $19.4   trillion  of  household  wealth.  While  white  households  lost  an  average  of  6.7  percent  of  their   wealth,  African  American  and  Latino  households  have  lost  a  staggering  27.1  and  41.3   percent,  respectively  (Sullivan  et  al.  2013).       Traditionally,  in  times  of  economic  and  social  crisis,  Americans  have  sought  refuge  in   the  home  as  a  moral  space  insulated  from  the  threats  to  historically-­‐grounded  visions  of   the  good  life  (May  2008;  Coontz  1992;  Low  2003).  In  some  ways  the  Great  Recession   repeats  this  pattern—as  in  my  informants’  nostalgia  for  the  pre-­‐1970s,  and  wider  renewed   interest  in  homesteading,  women’s  traditional  domestic  crafts  (fueled  in  no  small  part  by   265   social  media  such  as  Pinterest),  and  renewed  debate  about  the  feminist  merits  of  women’s   labor  market  participation  or  stay-­‐at-­‐home  mothering,  even  as  women  for  the  first  time   became  the  majority  in  America’s  workforce.  Fundamentally,  the  Great  Recession   confounds  and  doubles  down  on  the  homeward  turn:  the  crisis  is  not  “out  there”  separate   from  a  domestic  “in  here.”  The  crisis  is  of  and  in  the  American  home.  In  some  ways  this   makes  the  tenacious,  nostalgic  turn  toward  the  good  old  days  of  self-­‐provisioning— symbolized  today  by  the  return  of  backyard  chicken  coops—all  the  more  culturally   relevant  for  those  who  can  access  it.  The  larger  point  is  that  the  housing  and  economic   crises  of  the  last  six  years  have  upended  not  only  economic  safety  in  new  and  starker  ways,   but  that  they  have  done  so  in  ways  that  inherently  trouble  society’s  coping  mechanisms.   Each  of  the  dissertation’s  ethnographic  chapters  examined  ways  the  housing  crisis  inverts   (or  perverts)  cultural  and  institutional  expectations.  This  jarring  breakage  at  the  individual,   institutional,  and  cultural  levels—but  the  mandate  to  do  something  anyway—is  what  I   termed  governing  uncertainty.     What  I  suggest  with  this  term  is  that,  on  one  hand,  uncertainty  is  a  prevailing   conundrum  for  homeowners  facing  home  loss,  as  well  as  for  program  administrators,   housing  market  analysts,  and  other  folks  living  in  Michigan  communities  hit  by   foreclosures  and  the  recession.  At  the  personal  level,  governing  uncertainty  builds  on  a   body  of  research  about  ontological  security—that  is,  a  sense  of  safety,  predictability,  and   stability  about  the  world  and  one’s  place  in  it.  Homeowners  have  been  found  to  have   particularly  high  ontological  security  because  their  living  arrangements  are  more  stable   than  renters’  (Ross  2009;  Fields,  Libman,  and  Saegert  2010).  Home  loss,  therefore,  is  highly   likely  to  disrupt  ontological  security,  especially  for  those  who  have  formed  an  identity— 266   purposefully  or  not,  for  they  are  profound  social  metaphors—around  American  tropes  of   upward  mobility  and  the  American  Dream.     Additionally,  governing  uncertainty  indexes  state  and  private  interventions   attempting  to  manage  the  chaotic  foreclosure  milieu.  To  make  this  argument,  I  drew  on   theories  of  crisis  and  of  the  state.  In  broad  strokes,  crisis  interrupts  the  normal  course  of   social  life,  defying  both  received  wisdom  and  models  that  purported  to  predict  the  future.   According  to  Koselleck,  crises  occur  when  long-­‐standing  but  hidden  contradictions  can  no   longer  cover  over  one  another.  LiPuma  and  Lee  (2004)  note  that  catastrophic  economic   events  are  ones  that  were  not  predicted  by  any  model.  By  definition,  when  an  event  has  not   been  predicted,  there  is  no  pre-­‐existing  repertoire  of  responses  equipped  to  handle  the   situation.  Their  case  is  concerned  solely  with  financial  crises  but  I  argue  that  the  point   generalizes  well.  For  these  reasons,  uncertainty,  vulnerability,  and  indeterminacy  prevail  in   crisis  situations.  Their  unfixity  create  conditions  of  both  possibility  and  generalized   confusion  and  dismay.  In  particular  I  explored  in  the  ethnographic  chapters  how   Michiganders  responding  to  the  crisis,  especially  homeowners,  encountered  banks  and  the   state  alike  as  shifting  unpredictably—between  nefarious,  incompetent,  protective,  or   collaborative;  between  magical  and  rational;  between  legitimate  and  corrupt;  legible  and   illegible.       One  of  my  key  claims  is  that  the  foreclosure  crisis  is  eroding  the  lived  experience  of   American  citizenship,  both  because  it  costs  (or  at  least  threatens)  citizens’  most  valorized,   moralized  purchase  and  because  it  undermines  their  sense  of  the  state’s  loyalties.  I   anchored  this  claim  in  an  analysis  of  homeownership  as  central  to  American  cultural   citizenship.  Following  scholars  including  Marshall  (1950),  Dagnino  (2003),  and  Cruikshank   267   (1999),  I  consider  citizenship  as  everyday  social  practices  rather  than  only  formal   relationships  and  state-­‐based  recognition  of  rights.  Marshall  (1950)  argues  that  a  legal   relation  of  citizenship  bestows  the  same  rights  and  duties  on  all  members  of  society  to   create  equality  among  them.  He  concludes  that  citizenship  will  always  be  at  odds  with   capitalism,  because  it  reproduces  material  inequalities.  Yet,  American  ideology  has  equated   full  Americanness  with  middle  classness,  so  much  that  citizens  have  historically  believed  it   encompassed  almost  everyone  (Ortner  2003).  Within  this  political  economy,  consumption   is  a  right  that  citizens  hold  dear.  Berdahl  (2005)  argues  that  studying  consumption  as  a   citizenship  unites  practices  across  state  institutions,  the  public  sphere,  the  market,  and   experiences  of  the  self  as  a  moral  subject.  No  purchase  has  been  more  dear,  more  sacred,  or   more  “American”  than  a  single-­‐family  home.  Indeed,  Perin  concluded  in  one  of  the  first   ethnographies  of  American  homeownership  that  owning  a  house  was  “citizenship   perfected.”     As  the  housing  and  economic  crises  carried  on  in  Michigan’s  hardest-­‐hit  cities,  they   reconfigured  the  options  for  how  citizens  understood  their  state’s  relationship  to  banks,   their  own  relationships  to  finance,  and  the  meanings  of  local,  state,  and  national  histories.   There  remain  opportunities  for  homeowners,  housing  professionals,  and  local  economy   activists  to  transform  the  political  economies  of  the  nation’s  former  industrial   powerhouses.  Equally  there  remain  possibilities  for  Too  Big  to  Fail  institutions  to  remain   systemically  risky,  for  government  officials  to  remain  confused  and  stymied  about  how  to   reinforce  distance  between  state,  the  public,  and  markets.  For  anthropologists,  I  suggest   that  these  culturally  uncertain  spaces  are  opportunities  to  build  analytic  bridges—crossing,   in  this  case,  from  anthropology  of  the  state  to  finance  through  the  medium  of  citizen-­‐ 268   subjectivity.         The  American  Dream:  Configurations  of  State  and  Self     Michigan  homeowners  and  housing  professionals  confront  and  try  to  avoid   foreclosure  under  complex  circumstances.  Their  responses  are  conditioned  as  much  by  the   moral  and  cultural  work  of  the  American  dream  as  by  specific  foreclosure  prevention   programs.  Chapter3  examines  Michigan  history  and  the  ways  politicians,  Michiganders,  and   others  use  it  to  make  claims  about  the  essential  qualities  of  the  nation,  the  economy,  and   the  substance  of  citizenship.  These  claims,  which  I  revisit  in  the  following  section,  condition   (this  is  not  to  say  determine)  citizens’  demands  on  the  state  described  in  chapter  5.     The  American  dream  is  a  template  for  citizenship  as  pursuit  of  the  good  life—not   only  in  relation  to  the  state,  but  also  in  moral  relationships  with  others,  especially  the   family,  and  defined  by  a  particular  kind  of  consumption.  This  dream  is  premised  on  the   belief  that  a  hardworking  individual’s  efforts  pay  off  in  the  form  of  upwardly  mobility,   usually  as  homeownership,  higher  education,  or  success  in  business.  Master  narratives,  like   the  American  dream,  structure  the  terms  of  national  belonging,  providing  moral  order  to   the  world  and  offering  subjects  the  means  to  understand  themselves  as  coherent   individuals  acting  in  that  world  through  time.  Social  scientists  have  focused  on  the   individuating  effects  of  the  American  dream—in  positive  cases,  enabling  subjects  to  feel   ownership  and  effective  agency  when  they  can  achieve  upward  mobility.  Its  negative,  of   course,  is  to  individuate  blame  so  that  American  subjects  blame  themselves  when  their   ambitions  fail  or  they  do  not  improve  their  class  position.     For  most  of  the  twentieth  century,  this  dream  manifested  in  an  ideology  equating   269   homeownership  to  full  social  citizenship.  This  model  was  premised  on  strong  government   policies  supporting  and  shaping  the  housing  market.  Beginning  in  1934,  the  Federal   Housing  Authority  subsidized  single  family  homeownership  as  a  way  to  promote  citizens’   stability,  the  values  of  the  nuclear  family,  and  positive  identification  as  capitalist  subjects.     Michigan  had  seemed,  for  a  time  before  both  the  foreclosure  crisis  and  deindustrialization,   the  best  proof  of  the  triumphalist  narrative  that  anyone—regardless  of  background,   education,  or  race—could  work  hard  and  attain  a  comfortable  middle  class  lifestyle.  Even   though,  as  described  in  chapter  1,  the  truth  of  this  Michigan  myth  was  complicated  by  racial   inequalities,  limited  options  for  advancement,  outsourcing,  and  myriad  other  factors,  my   informants  embraced  a  nostalgia  for  the  era  before  the  1970s.  Michiganders,  homeowners   and  housing  professionals  alike,  identified  with  the  mid-­‐century  moment  of  industrial   grandeur,  a  time  that  Ortner  (2003)  calls  the  middle  classing  of  white  America.       Michiganders  themselves,  politicians,  and  other  observers  have  used  Michigan’s   history  (and  mythologized  versions  thereof)  to  validate  claims  about  the  values  of  hard   work  and  meritocracy.  To  return  to  one  example  in  this  dissertation,  U.S.  Secretary  of   Housing  and  Urban  Development  Shaun  Donovan  In  that  register,  the  widespread  threat  of   foreclosure  for  mid-­‐  and  eastern  Michiganders  threatens  meta  narratives  about  the  United   States  as  a  fundamentally  middle  class  society.  Donovan’s  speech  to  Michigan  housing   counselors  in  2010  emphasized  that  Michigan  “symbolized  what  made  America  great  in  the   20th  century”  (Donovan  2010).  He  omitted  entirely  the  devastating  job  losses  in  the  1970s,   1980s,  and  early  2000s,  focusing  instead  on  how  it  epitomized  the  pain  of  foreclosure  since   2008.  That  no  state  had  a  more  valid  claim  on  the  nation’s  collective  “pain”  since  2008   continued  to  reinforce  the  use  of  Michigan  as  a  crucible  for  the  nation.  Yet,  skimming  over   270   deindustrialization,  even  sympathetic  observers  miss  the  ways  that  Michiganders   understood  foreclosures  as  another  manifestation  of  the  same  problem:  the  rise  of  finance.   With  that,  homeowners  and  housing  counselors  felt  that  the  political  economy  that  made   their,  and  the  nation’s,  past  a  beacon  of  capitalist  democracy  slip  away,  to  be  replaced  by  a   not-­‐quite-­‐emergent  alternative.     Michiganders  continued  to  understand  their  experiences  as  emblematic  of  the  larger   polity  (both  the  state  and  the  nation-­‐state)  even  as  and  precisely  because  they  struggled  to   achieve  a  stable  economic  life.  It  is  a  cultural  logic  drawing  an  equivalence  between  self  and   nation:  “I  am  struggling…the  country  is  struggling.”  There  is  an  increasing  perception,   validated  by  record-­‐low  public  approval  ratings  for  Congress  circulated  in  news  media  and   gray  literature,  that  politicians  are  out  of  touch  with  regular  Americans’  lives  and   concerns—that  the  state  no  longer  represents  the  nation.  What  I  suggest  is  that,  even   though  my  informants  used  their  stories  to  point  out  the  disjuncture  between  themselves   and  “politics,”  they  reinforced  their  claims  to  the  nation  and  hailed  the  representatives  of   the  state  to  come  to  their  aid.       In  both  cases,  deindustrialization  and  foreclosure,  aspects  of  the  American  dream   become  cruelly  remote.  Deindustrialization  stripped  away  the  possibility  of  a  decent,   dignified  work  life  as  it  was  understood  in  the  post-­‐war  period.  Foreclosure  threatens  to   disrupt  another  pillar  of  the  American  dream—decent  family  life—through  the  loss  of  a   house,  the  symbol  of  both  family  and  full  citizenship.  When  analyzing  deindustrialization   and  the  foreclosure  crisis,  my  informants  perceived  the  American  Dream  as  a  “sham,”  a   “lie,”  or,  at  best,  part  of  an  irretrievable  past.     271     The  ideology  of  the  American  Dream  would  predict  that  Michiganders,  believing  they   are  individually  responsible  for  their  fates,  would  wholly  blame  themselves  for  their   failures.  This  has  been  the  historical  pattern,  but  chapter  3  argued  that  my  informants’   sense  of  dislocation  from  the  American  Dream  is  not  the  same  as  historical  cases  of  self-­‐ blame  for  failures  that  manage  to  keep  the  system  intact.  In  chapter  3,  I  argued  that   Michiganders  understood  downward  mobility  in  the  Great  Recession  not  as  individual   failures  but  as  systemic  ones.  This  signals  a  breakage  from  Ely  Chinoy’s  (1992)  finding  that   early  twentieth  century  workers  in  Lansing  blamed  themselves  for  their  failures  to  get   ahead,  thereby  preserving  the  social  order  of  American  meritocracy.     While  cultural  traditions  did  not  offer  much  explanation  for  the  housing  crisis  and   Great  Recession,  memories  of  deindustrialization  did.  In  chapter  3,  I  examined  my   participants’  sense  that  the  material  and  moral  loss  of  the  foreclosure  crisis  echoed  similar   losses  to  deindustrialization  of  the  1970s  and  80s.  The  eras  are  similar  in  that  both  ushered   in  tremendous  financial  innovations—quantifiable  risk  and  over-­‐the-­‐counter  derivatives   trades,  respectively—that  wrought  unemployment,  deprivation,  and  dislocation  to   Michigan’s  eastern  and  central  cities.  Anchored  in  memories  of  their  own  comings-­‐of-­‐age,   my  informants  recalled  “glory  days”  from  the  late  1940s  until  the  early  1970s,  contrasted   with  painful  periods  of  deindustrialization,  rising  crime,  and  generalized  decline  since  the   1970s.  Many  participants  experienced  the  housing  crisis  as  a  continuation  of  the  crisis  of   deindustrialization,  understood  as  the  global  move  away  from  a  production  economy  to   one  based  on  knowledge  and  finance.  Yet,  this  is  not  to  say  that  anyone  wanted  a  simplistic   return  to  the  political  economy  of  the  1960s.  Several  of  my  informants  derided  the  state’s   and  workers’  dependency  on  the  auto  companies,  citing  them  as  myopic  and  non-­‐self-­‐ 272   starting,  respectively.  In  projecting  forward,  few  offered  positive  visions  for  what  might  be   coming  to  replace  the  epoch  in  which  Michigan  “embodied  the  great  American  middle   class”  (Donovan  2010).  A  minority  of  folks  offered  partial  strategies  for  the  future  premised   on  a  local-­‐first  and  small  business  ethic,  signaling  to  me  a  loss  of  faith  in  the  grand  promises   of  a  global  market.       In  2009-­‐2010,  homeowners  faulted  banks,  federal  politicians  and  agencies  (e.g.,   Treasury),  and  “the  economy”  for  their  struggles.  With  foreclosures  and  unemployment  as   high  as  they  have  been  since  2006,  Michigan  homeowners  and  housing  professionals  by   and  large  understood  that  people  “got  in  a  situation”  for  which  they  were  not  to  blame  (job   loss,  hours  loss,  illness,  injury,  predatory  mortgage,  death  in  the  family,  divorce)  and  which   was  made  worse  by  the  larger  events  of  the  recession.  The  system  was  the  source  of  the   problem—greedy  banks,  the  economy,  contradictory  government  actions—and  individuals   were  caught  up  in  it.  What  this  symbolized  for  my  informants  was  Michigan  and  the  United   States’  betrayal  of  its  traditions,  abandoning  its  moral  authority  premised  on  a  broad,   democratic  middle  class,  in  service  of  a  short-­‐sighted,  exclusionary  financial  economy.       Changing  State  Forms     Much  of  this  dissertation  has  concerned  the  changing  boundaries  between  the  state   and  financial  institutions.  As  exemplified  at  a  macro  level  in  Too  Big  to  Fail,  the  federal   government  depends  on  and  understands  its  legitimacy  to  come  from  the  way  it  ensures   the  vitality  of  financial  markets.  In  a  meso  level,  I  argued  in  chapter  5  that  housing   counseling  programs  benefit  from  their  productive  distance  from  the  state.  Having   endorsement  from  the  state  lends  community-­‐based  non-­‐profits  an  aura  of  legitimacy  that   273   differentiates  them  from  profit-­‐motivated  “scammers.”  Drawing  the  state  too  close  into  the   housing  counseling  encounter,  though,  can  arouse  citizens’  suspicions  that  they  are  under   surveillance.  At  the  micro  level,  distressed  homeowners’  recourse  (or  not)  to  loan   modifications  has  the  power  to  define  a  citizen  into  a  dependent,  parasitic,  or  favored   category,  depending  on  the  observer’s  interpretation.  Following  Timothy  Mitchell’s  (1991)   work  on  the  state,  I  argue  that  these  policies  reconfigure  legitimate  spheres  of  intervention   for  both  financial  markets  and  the  state.  Although  household  economics  have  long  been   implicit  in  cultural  understandings  of  the  good  citizen,  the  question  of  mortgage   modification  brings  financialization  into  the  heart  of  state  and  subjective  practices.  In  other   words,  finance  has  become  more  integral  to  both  the  operations  of  state  and  sense  of  self.       Nationally,  foreclosures  began  to  be  perceived  as  a  “crisis”  not  when  hundreds  of   thousands  of  people  with  high-­‐cost  loans  were  losing  their  homes,  but  when  their  defaults   began  affecting  investment  banks.  This  is  the  kind  of  institutional  betrayal,  both  state  and   financial,  that  stokes  suspicion,  cynicism  and  defeatism  about  the  contemporary  substance   of  citizenship,  and  to  which  I  turn  in  this  section.       As  evidenced  in  chapter  4’s  discussion  of  Too  Big  to  Fail,  it  was  politically  essential   that  legislators  and  the  American  public  understood  their  interests  to  be  consonant  with   those  of  the  banks,  to  legitimate  the  intervention.  Interventions  including  TARP  and  the   TARP-­‐funded  HAMP  program  have  always  been  tenuously,  and  tensely,  held  in  relation  to   mortgagors’  distress.  Regulators  such  as  Federal  Reserve  chair  Ben  Bernanke  exhorted  the   public  to  understand  that  their  daily  lives  were  on  the  line  as  much  as  banks’  next-­‐quarter   profits,  should  banks  not  receive  a  tremendous  loan  of  taxpayer  money.  Others,  such  as   Treasury  Secretary  Paulson  expressed  an  enduring  faith  in  the  goodwill  of  financial   274   institutions  to  share  the  benefits  of  the  bailout  not  only  with  their  institutional  counter-­‐ parties  (those  holding  the  MBS  contract),  but  to  provide  relief  to  debtors.  Frankly,  the  belief   was  that  by  making  the  financial  system  whole,  the  benefits  of  the  bailout  trickle  down   throughout  society—misperceiving  that  individuals  in  communities,  rather  than   depersonalized,  asocial  investors,  are  the  targets  of  finance.  As  a  former  director  of   Goldman  Sachs,  Paulson  may  have  internalized  the  belief  system  Karen  Ho  (2009)  found   among  Wall  Street  bankers  that,  at  least  “hopefully”  (the  word  is  rife  in  their   commentaries)  there  is  ultimately  no  conflict  between  shareholders’  interests  and  those  of   regular  folks.     Homeowners  were  held  in  abeyance  anywhere  from  about  9  months  to  4  years  once   their  financial  troubles  began.  Institutional  legitimacy  and  institutional  practices—namely   the  waiting  and  bureaucratic  affects  in  loan  modification  programs—were  central  means   for  exploring  changing  state  forms  ethnographically.  Chapters  4  and  5  examine   homeowners’  help-­‐seeking  in  the  context  of  complex  financial  webs.  Distressed   homeowners  described  to  their  housing  counselors  and  to  me  their  lenders’  obstinance,   delay  tactics,  and  superficiality  when  dealing  in  response  to  requests  for  loan   modifications.  Like  other  foreclosed  homeowners  in  this  crisis,  my  informants  tried  to   resolve  the  mortgage  delinquency  both  by  addressing  its  root  causes  (bringing  in  more   income)  and  by  qualifying  for  reduced  mortgage  payments.     Chapters  4  and  5  also  examined  the  TARP  bailout  and  limp  implementation  of   HAMP.  Analysis  of  the  bailout  and  of  housing  counseling  practices  showed  that,  contrary  to   prevailing  political  wisdom,  or  bankers’  dubious  optimism,  the  interests  of  the  public  and   the  interests  of  financiers  are  not  fundamentally  the  same,  especially  not  in  the  ways   275   imagined  by  foreclosure  response  programs.  Indeed,  participants  in  this  project  expressed   rampant  doubts  about  institutions’  (financial  and  state)  interest  or  ability  to  work  with   homeowners.  Much  of  their  activity  occurred  in  spite  of  those  reservations,  giving  their   actions  a  quality  of  cynical  optimism.  Nuijten’s  (2003)  analysis  of  the  state  as  a  “hope-­‐ generating  machine”  proved  a  useful  point  of  departure  for  understanding  homeowners’   serial  application  for  loan  modifications  and  willingness  to  submit  paperwork  over  and   over  again—because  as  long  as  they  were  waiting,  they  had  not  been  denied  yet;  and  as   long  as  they  had  not  been  denied,  there  was  a  chance  to  save  their  house.     In  chapter  5,  I  discussed  the  ways  homeowners  successfully  and  unsuccessfully   sought  to  recruit  state  officials  in  their  service.  Most  often,  public  offices  as  such  (attorney   general,  state  representatives)  did  not  provide  the  direct  intervention  or  leverage  their   constituents  sought.  Instead,  effective  assistance  was  mediated  through  community-­‐based   housing  counseling  organizations  that  are  state-­‐sanctioned  and  state-­‐funded.  In  chapters  4   and  5,  I  examined  the  changing  locations  of  government  and  shifting  boundaries  between   state  and  market.  Few  homeowners  were  successful  in  having  politicians  intervene  directly   on  their  behalf.  More  often,  homeowners  accessed  the  state  obliquely,  turning  to  housing   counseling  services  to  help  them  apply  to  their  mortgage  servicers  for  a  government  loan   modification.     In  my  analysis,  distressed  homeowners’  increasing  use  of  food  stamps  and   conflicted  desires  and  demands  for  state  aid  through  loan  modifications  is  about  marking   not  only  class  but  also  citizenship  rights  and  relationships.  Although  it  may  be  more   difficult  to  see,  being  as  it  is  mediated  through  the  market  and  non-­‐profits,  making  it  visible   as  citizenship  removes  some  of  the  privilege  and  hiddenness  of  this  position.  What  people   276   want  from  the  state,  when  they  ask  for  a  loan  modification,  is  for  the  government  to  exert   more  influence  over  their  relationships  to  finance.  The  government  is  seen  as  a  potentially   powerful  interlocutor  here,  and  it  is  a  legitimate  demand  of  citizenship  for  the  state  to   create  certain  kinds  of  relationships  to  finance.  In  a  way,  distressed  homeowners  who  did   articulate  a  critique  of  the  bailout  related  to  the  state  not  as  civic  persons  demanding  rights   but  as  consumers  who  had,  in  effect,  bought  the  right  to  a  loan  modification  through  the  use   of  their  tax  dollars  for  the  Troubled  Assets  Relief  Program  (TARP).  The  purchase  of  the   right  to  a  loan  modification  through  taxes  hints  at  the  neoliberal  discourse  of  rights  as   primarily  the  right  to  deeper  integration  into  the  market.  Critics  of  neoliberalism  argue  that   neoliberalism  reduces  citizens  to  consumers  and  citizenship  rights  to  the  right  to  consume   (Pereira  Júnior  2005;  Reis  1996;  Alvarez,  Dagnino,  and  Escobar  1998).   While  Too  Big  to  Fail  illustrated  the  profusion  of  sites  of  authority,  the  actual   implementation  of  loan  modification  programs  illustrated  a  pervasive  refusal  or  evasion  of   authority,  using  Arendt’s  (1970)  “rule  by  Nobody”  as  an  analytic  lens.  As  discussed  in   chapter  5,  housing  counselors,  too  simultaneously  embodied  expertise  about  program  rules   but  refused  to  claim  any  expert  perspective  on  their  clients’  lives.  The  latter  showed  up   through  counselors’  ethical  commitment  to  provide  their  clients  with  information  to  make   appropriate  choices  but  a  refusal  to  dictate  choices.  Bringing  together  analysis  of   institutional  complicity—where  everyone  is  interrelated  and  simultaneously  to  blame— with  rule  by  Nobody  presents  a  form  of  governance  that  is  alternately  by  everyone  and  no   one.  Where  this  leaves  the  subjects  of  rule  (homeowners  and,  to  a  lesser  degree,  housing   professionals)  is  forging  ahead  uncertain  of  both  the  terrain  and  rules  by  which  they  will  be   held  accountable.     277   Yet,  the  shortcomings  of  finance,  the  political  system,  and  foreclosure  prevention   programs—the  failures  of  citizenship—have  not  been  able,  despite  certain  attempts,  to   dislodge  conventional  political  wisdom  and  financiers’  political  clout.  The  widespread   recognition  of  the  failings  and  disjunctures  described  above  are  a  classic  crisis  scenario.  In   Koselleck’s  analysis,  crises  are  the  recognized  inflection  points  when  a  set  of  contradictions   that  have  developed  over  a  longer  time  span  can  no  longer  cover  over  each  other  (Goddard   2006).     For  Michiganders,  crisis  was  a  multi-­‐layered  category.  I  explored  a  wide-­‐ranging,   interconnected  set  of  wrongs  experienced  by  subjects  of  the  foreclosure  crisis:  from  the   impersonal  failures  of  the  market,  as  in  losing  a  job  or  wages;  to  betrayal  by  lenders,  either   through  predatory  mortgages  or  an  obstinate  refusal  to  compromise  on  a  loan   modification;  to  a  sense  of  abandonment  by  the  state,  in  the  failure  to  intercede  more   forcefully  for  distressed  homeowners.  Given  the  cultural  importance  of  middle  class   consumption,  in  general,  and  homeownership,  specifically,  to  models  of  ideal  American   citizenship,  homeowners  facing  foreclosure  and,  to  a  lesser  degree,  housing  counselors   experience  these  failures  of  both  the  state  and  market  as  failures  of  citizenship  and   nationhood.  In  foreclosure  prevention  programs,  whether  housing  counseling  or  self-­‐ directed,  mortgage  servicers  made  the  housing  crisis  worse  through  their  program  failures.   In  chapter  4,  I  described  the  financial  and  institutional  structures—from  securitization   through  loss  mitigation  staffing—that  inhibited  homeowners’  help-­‐seeking.  I  argued  that  in   their  implementation  of  HAMP,  banks  obliquely  positioned  themselves  as  somewhere   between  malicious  and  incompetent,  bedeviling  homeowners’  attempts  to  transact  with   them  as  rational  institutions.     278   In  the  face  of  banks’  intractability  for  many  clients,  homeowners  and  housing   professionals  alike  produced  alternative  narratives  about  how  homeowners  might  give  up   the  house  on  their  own  terms.  Walking  away,  suicide  stories,  and  the  emotional  freedom   found  in  giving  up  a  house  are  ways  to  search  for  the  meaning  and  reduce  the  pain  of  the   foreclosure  crisis  for  homeowners.  They  simultaneously  absorb  blame  and  challenge   dominant  narratives  that  moralize  against  homeowners,  by  depicting  the  crisis  as  one   manufactured  and  made  worse  by  the  actions  of  banks.  In  light  of  the  evidence  in  this   dissertation  and  the  recent  nationwide  judgments  against  banks  for  subverting  loan   modification  programs,  it  is  easy  to  understand  homeowners’  feelings  of  despair  when  in   spite  of  their  best  efforts  (including  in  some  cases  an  ability  to  afford  the  mortgage),  they   cannot  affect  the  outcome.  They  feel  betrayed  and  angered  by  banks  and  other  financial   institutions  they  trusted  to  act  in  their  best  interest—or  at  least  to  not  purposefully  harm   them  in  bald  pursuit  of  profit.     Given  lenders’  unpredictability,  housing  counselors  worked  to  manage—and   lower—their  clients’  expectations  of  receiving  loan  modifications,  as  demonstrated  in   chapter  5.  Along  with  this  emotional  management,  however,  a  growing  body  of  evidence   indicates  that  housing  counseling  is  an  effective  way  for  homeowners  to  increase  their   chances  of  curing  mortgage  delinquency.  Recent  studies  of  HUD-­‐funded  housing  counseling   and  the  NFMC  program  find  that  counseled  borrowers  are  up  to  70  percent  more  likely  to   get  loan  modifications  than  similar  homeowners  who  get  no  non-­‐profit  counseling   (Jefferson  et  al  2012;  Mayer  et  al  2011;  Collins  and  Schmeiser  2013).   I  found,  too,  that  as  maddening  as  the  loan  modification  process  was,  most  Michigan   homeowners  I  interviewed  remained  keen  on  the  idea  of  homeownership:  should  they  lose   279   the  current  house,  they  planned  to  buy  another  and  to  encourage  their  children  to  do  so,   too.  A  minority  of  homeowners  had  negative  enough  experiences  that  they  claimed  they   were  committed  to  never  buying  another  house  again—though  I  believe  that,  as  the   experience  recedes,  it  will  actually  be  a  very  small  minority  who  are  permanently  soured   on  buying  with  a  mortgage.  And  although  housing  counselors  talked  with  reservation  about   how  homeownership  is  not  financially  appropriate  for  everyone,  many  also  imagined  that   after  foreclosures  subsided,  they  would  have  a  lot  of  former  homeowners  in  need  of  credit   repair  to  become  “re-­‐mortgagable.”  The  cultural  and  ideological  appeal  of  homeownership   appears  to  remain  as  almost  as  strong  as  ever.     The  persistent  cultural,  emotional,  and  financial  appeal  of  buying  a  home—in  spite  of   such  negative  mortgage  experiences  as  described  here—portends  two  seemingly  distinct,   but  related,  things.  First,  losing  a  home  to  foreclosure  is  disruptive  and  painful  in  a  large   number  of  ways,  but  (often)  not  existentially  shattering.  Evidence  from  earlier  foreclosures,   though,  suggests  that  it  takes  former  homeowners  up  to  a  decade  to  recover  from  the   financial  loss  (Culhane  2012:129).  Second,  the  impregnable  appeal  of  buying  a  house   means  that  borrowers  will  continue  demanding  mortgages  in  large  numbers.  These  two   observations  leave  lenders  again  with  all  the  bargaining  power,  opening  the  way  for   lenders  to,  on  one  hand,  restrict  access  to  credit  and,  on  the  other,  resume  predatory  or   deceitful  practices.       Meanwhile,  financial  institutions  have  largely  resumed  dangerous  speculative   practices  with  impunity  (e.g.,  the  collapse  of  MF  Global,  JP  Morgan  Chase’s  credit  card   derivatives  loss,  LIBOR  rate-­‐fixing  scandal,  and  more).  Ways  forward  must  address  this   legitimacy  gulf  for  financial  and  state  institutions,  though  the  failure  to  create  meaningful   280   reform  in  light  of  the  financial  crisis  and  more  recent  scandals  does  not  signal  great  hope.   These  conditions  call  out  for  strong  reforms  to  mortgage  lending—as  begun  with  the  Dodd-­‐ Frank  financial  reform  act  and  new  servicing  standards  designed  by  the  Consumer  Finance   Protection  Bureau,  to  take  effect  in  2014.  In  order  to  have  meaningful  effects,  of  course,  the   regulatory  agencies  must  be  equipped  with  the  financial  and  staff  resources  to  enforce   rules.  And,  recalling  the  theme  of  blurred  boundaries,  regulators  must  have  enough   distance  between  themselves  and  their  subject  agencies  to  differentiate  the  state’s  interests   from  those  of  finance.  More  systemically,  Karen  Ho  (2012)  has  called  for  people  to  hold   Wall  Street  to  count  for  its  “moral  attachment  to  production.”     A  distance  of  three  years  between  the  primary  fieldwork  for  this  dissertation  and  its   completion  has  not  resolved  the  uncertainties  about  the  still  continuing  foreclosure  crisis   (now  six  years  old)  and  aftershocks  of  the  Great  Recession.  That  time  lag  has,  however,   strengthened  the  case  for  the  analysis  presented  here  about  the  shifting  forms  of  state   power  and  the  allegiances  of  state  institutions  to  their  various  constituencies  (such  as   citizens,  corporations,  and  non-­‐profit  and  civil  society  organizations).  To  take  but  two   examples,  in  December  2012,  Michigan  approved  right-­‐to-­‐work  legislation,  banning  the   right  of  employees  to  form  closed  shops.  And  after  years  of  near-­‐misses,  the  city  of  Detroit   was  placed  under  an  emergency  manager.  These  changes  have  been  extremely  contentious:   the  right-­‐to-­‐work  bills  drew  a  historic  number  of  protesters  to  the  capitol.  Politically-­‐active   Detroiters  have  long  been  mobilizing  opposition  to  an  emergency  manager  through   testimonies  at  city  council,  editorials,  and  direct  action.     For  some  Michiganders—but  clearly  not  all—these  recent  political  changes  further   uncouple  the  organs  of  the  state  from  the  concerns  of  regular  people.  In  chapter  3,  I   281   discussed  ways  that  dedicated  consumer  activists  and  citizens  work  to  create  a  local  and   affirmative  economy,  insulated  from  what  they  consider  the  more  pernicious  aspects  of  the   Market  and  the  State.  These  initiatives,  too,  have  grown  in  the  past  two  years  through   grassroots  efforts  including  Ignite  Lansing,  periodic  gatherings  where  speakers  present  on   topics  meant  to  spur  critical  thought  and  action  for  community  benefit;  and  local  business   boosters  using  the  Twitter  hashtag  #lovelansing.       As  of  March  2013,  Michigan  still  had  the  third-­‐highest  foreclosure  rate  in  the  nation,   logging  73,000  foreclosures  from  February  2012—February  2013  (CoreLogic  2013).  An   increasing  number  of  foreclosures  are  not  mortgage  foreclosures  but  tax  foreclosures,  a   problem  that  shares  many  of  the  same  concerns  discussed  here,  though  with  notable   differences  beyond  the  scope  of  this  work.  On  balance,  however,  little  has  changed  in  the   cultural  politics  of  the  foreclosure  crisis.  In  light  of  the  evidence  in  this  dissertation  and  the   recent  nationwide  judgments  against  banks  for  subverting  loan  modification  programs,  it  is   easy  to  understand  homeowners’  feelings  of  despair  when  in  spite  of  their  best  efforts   (including  in  some  cases  an  ability  to  afford  the  mortgage),  they  cannot  affect  the  outcome.   The  thwarted  agency  of  homeowners,  counselors,  and  some  state  agents  who  have  not   been  able  to  alter  the  fundamental  problems  recall  to  me  Carol  Greenhouse’s  (2010)   evocative  notion  of  negative  agency,  where  agency  is  defined  by  refusal  and  withdrawal.   What  it  means  is  that  although  this  crisis,  like  previous  ones,  has  brought  on  “heightened   reflexivity”  about  “the  spectrum  of  social  (and  business)  rules  and  norms,”  (May  and   Morrison  2003:269),  it  has  so  far  failed  to  reconfigure  the  practices,  policies,  and  beliefs  at   the  root  of  this  crisis  of  economy  and  meaning.     282   APPENDIX 283   Appendix.  Research  Instruments  and  Summary  of  Primary  Data   1. 2. 3. 4.   Semi-­‐structured  interview  guide  for  homeowners   Semi-­‐structured  interview  guide  for  housing  professionals   Survey  for  housing  professionals   Overview  of  primary  data  collected       1.  Questions  for  Homeowners     Note:  Interviews  will  consist  of  a  series  of  open-­‐ended  ethnographic  questions  and  a   demographic  profile.  The  questions  below  represent  a  range  of  questions  and  a  possible   sequence.  The  interviewer  may  skip,  modify,  or  reorder  questions  and  add  follow-­‐up   questions  depending  on  the  specific  interview  (how  forthcoming  the  interview  subject  is,   other  need  for  clarification,  etc.).  Questions  on  political  context  will  ask  about  current   events  so  the  section  will  evolve  as  events  change.     I.  Family  and  Neighborhood  Background     There  are  four  main  topics  I  want  to  discuss  today  plus  some  basic  information  about   you.  I  want  to  start  just  by  asking  you  about  your  background  and  about  messages  and   beliefs  about  buying  a  house.  Remember  that  everything  we  talk  about  is  confidential  and   that  I  won’t  share  anything  that  identifies  you  with  anyone  at  the  agency,  your  lender,  the   attorneys,  or  in  any  of  the  papers  I  write  about  this  research.  Our  conversation  won’t  affect   the  outcome  of  your  loan  modification.  Also  remember  that  you  can  skip  any  question  you   don’t  want  to  answer.     1. Where  are  you  from?     a. From  Michigan?  Another  area?  From  US?  Immigrant—from  where?   b. When  did  your  family  move  to  Michigan?  From  where?       2. Tell  me  a  bit  about  your  family:     a. What  brought  you/your  family  here?   b. Where  did  your  parents  work;  your  grandparents?   c. [If  the  person  is  an  immigrant]  Is  purchasing  and  owning  your  own  house   important  in  the  culture  you’re  originally  from?  How  do  people  pay  for  their   houses?       3. Where  did  you  live  as  a  kid?     a. What  was  that  neighborhood/community  like?     4. How  do  you  spend  your  time  off  work?  Family?  Hobbies?  Church  or  community   organizations?     a. If  unemployed,  how  are  you  spending  your  time  since  you  were  laid  off?     284         5. Do  you  remember  any  discussions  about  homebuying  from  your  childhood  or  early   adult  years?     a. Do  you  recall  there  being  any  particular  message  about  homebuying?     b. Or  input  from  a  friend  or  family  member?     6. Do  you  know  anyone  who’s  been  or  is  homeless?     a. What’s  their  situation?     b. Did  that  change  how  you  think  about  homeless  people?   c. If  homeless,  did  you  know  anyone  homeless  before  you  became  homeless?   Did  that  prepare  you  in  any  ways  for  what  it  was  like  being  homeless?   7. Will  you  (or  did  you)  encourage  your  children  or  other  people  you’re  close  to,  to   consider  buying  a  house?     a. Are  there  circumstances  under  which  you  would  or  wouldn’t  encourage   someone  you  know  to  buy  a  house?     b. At  this  point,  do  you  think  you  will  buy  a  house  again?  Why/why  not?   8. What  class  do  you  consider  yourself  to  belong  to?     a. What  is  it  that  makes  you  a  member  of  that  class?   b. Is  there  anything  that  would  change  the  class  you  belong  to?  What?     II.  Current  Housing     A.  For  homeowners  near  foreclosure  or  working  on  loan  modification       9. Tell  me  about  where  you  live  now:   a. What's  your  neighborhood  like?   b. How  long  have  you  lived  in  that  area?   c. Have  you  noticed  your  neighborhood  change  since  you've  lived  there?  If  so,   how?     10. When  did  you  buy  your  house?   a. Was  this  the  first  house  you've  bought?     11. What  kinds  of  conversations  did  you  have  before  you  bought  the  house?   a. Why  did  you  want  to  buy  the  house?     b. Why  did  you  want  to  own  a  home  in  the  first  place?     c. What  was  your  plan  when  you  bought  it?   d. Did  you  think  this  would  be  a  permanent  home  for  you?   e. [If  it  was  bought  during  the  bubble  years  (2000-­‐2007)]:  Were  you  planning   on  reselling  it  soon,  or  flipping  it?  At  that  time,  it  seemed  possible  to  flip   houses,  that  is  to  buy  them,  maybe  do  some  renovations,  and  sell  the  house   for  a  profit—sometimes  a  big  profit.     12. Tell  me  about  what  brought  you  to  the  housing  counseling  agency.     a. What's  going  on  with  your  house?   285               b. Tell  me  about  when  you  realized  you  were  having  difficulty  paying  the   mortgage.   c. What's  it  like  being  in  this  situation?   d. How  have  you  imagined  getting  yourself  out  of  the  situation  you're  in  now   with  the  house?   e. Has  this  situation  changed  how  you  think  about  yourself  in  any  ways?  If  so,   how?     f. Who  do  you  think  is  responsible  for  the  situation  you  find  yourself  in  with  the   house?     13. I  asked  you  to  bring  copies  of  the  hardship  letter  you  submitted  to  your  lender  (and   any  drafts)  with  the  loan  modification  packet.  I’d  like  to  talk  about  that  with  you.     a. What  was  it  like  to  write  this  letter?     b. Is  this  the  first  version  of  the  letter  you  wrote?  Did  you  write  other  versions?   Why?     c. If  this  is  not  the  first  letter  you  submitted,  how  were  you  told  to  change  it?  By   whom?  Why?     d. Who  reads  these  letters?     e. What  do  they  do  for  your  loan  modification  application?   14. What's  happening  with  your  loan  modification  now?   a. What  outcome  are  you  hoping  for?   b. What  do  you  expect  to  happen?   c. How  is  your  lender  behaving  with  you?     d. Why  do  you  think  they're  acting  like  that?   15. Why  do  you  want  a  loan  modification?   a. [If  the  answer  is  some  variant  of  ‘to  stay  in  my  house’]  Why  do  you  want  to   stay  in  this  house?   b. Do  you  think  you  deserve  a  loan  modification?  Why?  Are  there  people  who   don't?  Why?   16. If  you  don't  get  a  loan  modification  you  can  afford,  what  will  happen?     a. Do  you  think  there  will  be  consequences  for  you  if  you’re  foreclosed  on?     b. If  so,  what  would  those  consequences  be?  How  long  will  they  last?     c. If  not,  why  not?   a. Where  do  you  think  you'll  live?  What  do  you  think  you'll  do?   17. What  support  or  resources  are  you  drawing  on?   a. Does  your  family  know  you're  facing  foreclosure?  If  so,  how  did  they  react?     b. If  not,  why  not?   c. Do  you  know  anyone  else  who’s  going  through  foreclosure  (friends,  family,   neighbors,  church  members,  etc.)?  What’s  their  situation?  Did  that  change   how  you  think  about  people  facing  foreclosure?   18. When  you  think  about  your  house  going  to  foreclosure:   286   a. What's  the  hardest  thing  for  you  about  thinking  of  foreclosure?   b. Are  there  easy  parts  to  thinking  about  foreclosure—a  sense  of  relief,  things   you  desire  about  the  loan  mod  or  even  walking  away  from  the  house?   c. What  are  five  words  that  describe  how  you  feel  about  being  faced  with  a   possible  foreclosure?     19. How  has  this  experience  of  foreclosure/loan  modification  changed  anything  for  you   (i.e.,  changed  the  way  you  think  about  anything)?     II.  B.  New  Homebuyers     1.  Tell  me  about  your  new  house.     a. What’s  it  like?     b. Where  is  it?  What’s  the  neighborhood  like?     c. What  are  your  plans  for  the  house  (i.e.,  live  in  it  long-­‐term,  resell  in  a  few  years,  rent   it  out,  etc.)?     2.  How  have  your  family/friends/etc.  reacted  to  your  buying  a  house?     3.  Why  are  you  buying  a  house  right  now?   a. Is  this  the  first  house  you’ve  bought  or  not?     b. If  so,  did  something  in  particular  make  you  decide  to  do  it  now?     c. If  not,  are  you  moving  from  a  place  you  own  or  rent?  If  own,  what’s  the  reason  for   moving?  If  rent,  what  convinced  you  to  buy  again?     4.  What  was  it  like  getting  approved  for  your  mortgage?  There  have  been  contradictory   reports  in  the  news  that  it  is  tougher  to  get  a  mortgage  but  also  that  there  might  be  a  new   bubble  beginning  because  prices  are  lower  now.       5.  Do  you  think  things  in  the  real  estate  market  have  changed  since  the  bubble  period?   Since  the  recession  started?     II.  C.   Homeless  residents   1. Where  do  you  stay  now?  What’s  it  like  living  there?   2. How  long  have  you  been  homeless?   3. Why  do  you  think  you  are  homeless?   4. What  kind  of  place  would  you  like  to  live  in?   a. Would  you  prefer  to  rent  something,  own  it,  or  have  some  other  kind  of   arrangement?   b. Why  do  you  feel  that  way?     5. Do  you  think  you’ll  be  able  to  get  into  a  stable  housing  situation?   287     a. What  kind?     b. What  do  you  need  to  get  that?   6. What  do  you  think  are  the  causes  of  homelessness  in  Lansing?     7. What  support  or  resources  are  you  drawing  on?   a. Does  your  family  know  you're  homeless?     b. If  so,  how  did  they  react?  If  not,  why  not?     8. If  you  were  to  design  programs  to  deal  with  homelessness  in  our  community,  what   would  they  be  like?     a. What  would  their  goals  be?   b. How  would  they  achieve  these?   III.  Personal  finance     In  addition  to  learning  about  foreclosures  in  particular,  in  this  project  I’m  also  interested  in   learning  about  how  people  learn  about  money  management  and  what  they  do  to  manage   their  money.  Remember  that  you  can  skip  any  question  you  don’t  want  to  answer.     18. Let’s  start  with  the  question  that  obviously  bridges  housing  and  money   management.  What  kind  of  mortgage  do  you  have?     a. With  what  company?  Is  it  the  original  mortgage  or  a  refinance?   b. Is  that  the  original  lender  or  a  servicer?  If  it’s  a  servicer,  tell  me  all  the   servicers  you’ve  dealt  with  in  this  mortgage.   c. Who  owns  your  mortgage?     d. Do  you  know  if  it  was  packaged  in  a  mortgage-­‐backed  security  and  sold  to   investors?   e. What  do  you  remember  about  the  process  of  applying  for  the  mortgage?   f. Are  you  underwater  on  your  mortgage  (do  you  owe  more  than  your  house  is   worth)?     19. Have  you  ever  declared  bankruptcy?     a. [If  yes]  What  chapter?  Why  that  chapter?     b. When?  What  caused  you  to  declare  bankruptcy?     c. What  was  it  like  going  through  the  bankruptcy  process?   d. Do  you  foresee  circumstances  when  you  might  declare  bankruptcy  again?   e. [If  no]  Did  it  occur  to  you  to  file  for  bankruptcy  when  you  realized  you  would   have  trouble  staying  current  on  your  mortgage?   f. [If  in  process]  How  did  you  decide  to  declare  bankruptcy?  Which  chapter,   why  that  chapter?     20. Do  you  know  your  credit  score?  Is  it:     •  720  –  850     •  700  –  719   288         •  675  –  699     •  620  –  674   •  560  –  619   •  500  –  559     21. Savings  and  investment:   a. [If  behind  on  mortgage]  Have  you  changed  your  savings  or  investment   accounts  since  you  began  struggling  to  pay  the  mortgage?  (I.e.,  tapped  into  or   depleted  savings,  cashed  in  investments,  401K.)   b. What  have  you  had  to  learn  or  change  financially  since  starting  the  loan   modification  process?   c. Where  do  you  get  information  about  how  to  manage  your  money  (i.e.,   specific  books,  professionals,  websites,  news  outlets,  friends  or  family)?     d. Before  you  fell  behind  on  your  mortgage  payments,  were  you  saving  or   investing  money?  Where/how?     e. Where  do  you  get  information  about  how  to  manage  your  money?     f. [If  not  behind  on  mortgage]  Are  you  saving  money  or  making  any  kind  of   investments?  What  are  those?  Tell  me  more  about  your  investments.  What   are  they?  What  were  you  told  about  the  investment  when  you  made  it?  Is   making  an  investment  like  putting  money  in  the  bank  or  different?     22. Have  you  lost  money  since  the  recession  began?     a. [If  no]  Why  is  this  the  case?   b. [If  yes]  On  what  kinds  of  accounts/investments?  What  kinds  of  losses?   c. Are  these  losses  going  to  have  effects  on  you?  If  so,  in  what  ways?   d. Tell  me  more  about  your  investments.  What  are  they?  What  were  you  told   about  the  investment  when  you  made  it?  Is  making  an  investment  like   putting  money  in  the  bank  or  different?   e. Do  you  know  what  kinds  of  things  your  money  was  invested  in?   f. Do  you  know  if  your  pension  or  other  investment  had  bought  mortgage-­‐ backed  securities?     23. Have  you  ever  received  government  assistance  (i.e.,  food  stamps,  WIC,  social   security,  disability,  Temporary  Assistance  to  Needy  Families  [TANF])?     a. What  was  it  and  under  what  circumstances?     b. What  about  unemployment  benefits?     IV.  Political  Context     Before  we  conclude  I  also  want  to  ask  you  some  questions  about  current  events  and  the   recession  in  general.       24. What  sources  do  you  get  your  news  from?  (Names  of  newspapers,  radio   stations/programs,  magazines,  websites,  friends/family)     25. How  do  you  think  we’re  going  to  get  out  of  the  economic  situation  we’re  in?   289         a. b. c. d. When  do  you  think  the  recession  started  in  Michigan?     When  did  you  feel  it  affecting  you  personally?   What  do  you  think  is  the  future  of  Michigan?     Of  Lansing?   26. Prior  to  the  recession,  how  did  you  interact  with  the  government?   a. Has  that  changed?  How?     27. How  do  you  think  the  real  estate  market  collapse  has  been  handled  (by  banks,  by   politicians)?   28. This  may  be  obvious  to  you,  but  I  assume  you  are  familiar  with  Michigan’s  90-­‐day   law  for  foreclosures  and  mediation  with  lenders?     a. What  was  the  intention  behind  this  law?     b. How  is  it  working?                     29. If  you  were  in  charge  of  this  process,  what  would  it  look  like?     a. How  should  the  government  (which—local,  state,  federal)  respond  to  rising   foreclosures?   b. What  would  the  ideal  scenario  for  someone  facing  foreclosure  be?   c. What  are  five  words  that  describe  the  loan  modification  process?   30. What  do  you  think  about  the  idea  of  owners  walking  away  from  a  mortgage?   31. What  is  “the  market?”  How  does  it  work?     32. Who  do  you  think  is  responsible  for  the  real  estate  market  crash?  And  who’s   responsible  for  the  collapse  (and  near-­‐collapse)  of  big  banks  in  the  last  few  years?   33. What  should  government  be  doing  or  not  doing  in  the  economy?   a. How  has  the  bailout  of  “too  big  to  fail”  banks,  also  known  as  the  TARP  money,   been  handled?     b. Should  the  government  have  gotten  involved  with  assisting  these  financial   institutions?     c. What  about  the  government’s  bailout  of  GM?   34. Last  year  Senator  Dick  Durbin  was  quoted  as  saying,  "And  the  banks  —  hard  to   believe  in  a  time  when  we're  facing  a  banking  crisis  that  many  of  the  banks  created   —  are  still  the  most  powerful  lobby  on  Capitol  Hill.  And  they  frankly  own  the  place.”     a. What  do  you  think  of  this  statement?     35. Have  you  followed  discussions  of  credit  card  reform  and  the  proposed  Consumer   Financial  Protection  Agency?  What  do  you  think  of  these  ideas?   36. Do  you  feel  there  is  a  particular  political  party  or  group  that  most  closely  fits  with   your  political  views?   290   a. Have  you  attended  any  rallies,  speeches,  or  other  political  events  since  the   recession  started?  What  were  those?   b. Who  did  you  vote  for  in  the  last  presidential  election?         37. When  you  imagine  a  person  who’s  being  foreclosed  on,  what  person  do  you   imagine?     a. What  does  that  person  look  like?     b. What’s  their  story?     c. Try  to  recall  if  this  is  who  you  imagined  before  you  were  behind  on  your   mortgage  payments  or  before  the  recession  started.   38. There  has  been  increasing  news,  government,  and  academic  attention  to  the  middle   class  in  America  since  the  recession  began.     a. What  do  you  think  are  necessary  elements  to  a  middle-­‐class  lifestyle?     b. How  many  (i.e.,  what  percentage  of)  Americans  do  you  think  are  middle-­‐ class?   39. I  have  one  last  question  I  want  to  ask  you  before  filling  in  some  basic  information.   My  research  is  in  part  about  the  idea  of  the  “American  dream.”  How  would  you   define  the  “American  dream”?     a. Is  it  relevant  to  today?  Do  you  think  it’s  possible?     b. Do  you  think  it  was  ever  possible?         V.  Profile     ZIP  code:     First  home?   ______     Who  lives  in  your  household?  (Please  list  relationships  and  ages)           Are  you:     _____Married?     _____Partnered?   _____Single?   _____Divorced?   _____Separated?   _____Widowed?   _____Other?     Age:     Gender:     Race/Ethnicity:     Occupation:     291   Current  employment  status:       Church/religious  affiliation:     Other  associations/community  groups:     Political  affiliation:         292   Since  when?     2.  Interview  guidelines:  employees  and  volunteers  of  housing  agencies,  public   agencies,  lending  institutions,  legal  offices,  and  bankruptcy  courts     Note:  Agency  and  sector-­‐specific  sets  of  questions  are  marked;  all  others  will  be  asked  to  all   interview  participants.  Interviews  will  consist  of  a  series  of  open-­‐ended  ethnographic   questions  and  a  demographic  profile.  The  questions  below  represent  a  range  of  questions   and  a  possible  sequence.  The  interviewer  may  skip,  modify,  or  reorder  questions  and  add   follow-­‐up  questions  depending  on  the  specific  interview  (how  forthcoming  the  interview   subject  is,  other  need  for  clarification,  etc.).  Questions  on  political  context  will  ask  about   current  events  so  the  section  will  evolve  as  events  change.     I. Program  and  Employment  Information     There  are  five  main  topics  I  want  to  discuss  today  plus  some  basic  information  about  you.  I   want  to  start  just  by  asking  you  about  your  background  and  about  messages  and  beliefs   about  buying  a  house.  Remember  that  everything  we  talk  about  is  confidential  and  that  I   won’t  share  anything  that  identifies  you  with  anyone  at  the  agency,  your  lender,  the   attorneys,  or  in  any  of  the  papers  I  write  about  this  research.  Also  remember  that  you  can   skip  any  question  you  don’t  want  to  answer.     1. Tell  me  briefly  about  what  you  do  in  your  position  as  a  [housing  counselor/financial   planner/program  supervisor].     a. How  did  you  get  into  this  line  of  work?   b. Who  are  your  clients?  What  kinds  of  issues  do  they  have  that  bring  them  in   for  a  loan  modification?  What’s  it  like  working  with  the  homeowners?   c. What’s  it  like  working  with  lenders?  What  about  with  their  attorneys?     2. [For  program  directors]  Can  you  tell  me  about  the  history  of  your  agency/program?     a. What  are  the  purposes/goals?     b. Was  housing  always  the  focus  of  the  program?     c. What  about  foreclosure  prevention  or  what’s  called  the  “soft  landing?”     d. If  so,  why?  If  not,  when  and  why  did  that  develop?       3. You  know  that  in  this  project  I’m  interested  in  foreclosures  and  responses  to  them.   What’s  your  take  on  the  rise  in  foreclosures?   a. When  did  it  start?  Where  do  you  think  the  cycle  is  at  (i.e.,  peaked,  leveled  off,   declining,  etc.)?   b. What  caused  it?   c. In  your  view,  what  caused  the  rise  in  foreclosures  in  Lansing?   i. Who’s  being  foreclosed  on?  Who  are  your  clients?   ii. Is  this  different  nationally?  How  so?   iii. Are  there  things  that  are  particular  about  Michigan  versus  other  areas   of  the  country?  What  are  these?  What  explains  the  differences?     293             4. How  do  you  think  agencies  and  organizations  in  Lansing  meet  the  needs  of  the  rise   in  foreclosures?     a. Who’s  best  served?  (i.e.,  types  of  clients,  lenders,  agencies)   b. What  do  you  think  would  help  fill  any  gaps  in  services?     c. What  have  you  observed  changing  in  housing,  community  development  or   economic  assistance  needs  over  the  last  few  years?   5. I  know  the  general  procedures  a  homeowner  goes  through  to  apply  for  a  loan   modification.  I  want  to  talk  with  you  more  specifically  about  the  actual  process  of   working  through  a  case.   a. From  your  perspective,  what  are  five  words  that  describe  the  loan   modification  process?   b. Are  there  things  that  are  not  spelled  out  in  the  program  guidelines  that  you   find  or  have  heard  are  helpful  in  obtaining  a  modification?     c. What  have  you  learned  since  you  started  in  this  position  that’s  been  most   helpful?     d. Are  there  things  you  used  to  do  that  you’ve  stopped  doing?  Why?     e. What  are  the  most  important  qualities  for  a  client  to  have  when  they   work  on  this  process  with  you?   6. I  understand  that  homeowners  submit  a  hardship  letter  with  their  loan  modification   package.     a. What’s  the  purpose  of  the  letter?     b. What  do  lenders  want  to  see  from  homeowners?     c. [for  housing  counselors]  What  do  people  come  in  with?  Do  you  give  them   guidance  on  how  to  write  their  hardship  letter?     i. What  kinds  of  things  are  important  to  include?   ii. What  kinds  of  things  would  you  discourage  a  client  from  putting  in  a   letter?   d. [for  lenders]  What  happens  to  a  hardship  letter  when  it  arrives  in  a  loss   mitigation  packet?   i. Does  someone  read  it?  Who?   ii. Does  it  have  an  impact  on  what  offer  might  be  made  to  a  client?  Tell   me  how  that  works.     7. If  you  were  to  design  a  process  or  program  from  scratch  to  address  the  foreclosure   crisis,  what  would  it  look  like?     a. What  options  would  someone  facing  foreclosure  have,  what  outcomes?   b. What  would  be  the  outcome  for  lenders?       8. I  understand  that  unemployment  is  a  major  issue  for  homeowners  in  Michigan.   What  should  be  done  for  people  who’ve  lost  their  income  and  there  is  no  sustained   income  in  the  foreseeable  future?   9. [for  lenders]  I’ve  been  able  to  observe  housing  counselors  working  but  not  the  ways   lenders  deal  with  foreclosure  prevention  in  their  offices.  Having  worked  inside  the   294         loss  mitigation/home  retention/imminent  default,  etc.  department  at  a  lender,  tell   me  about  what  the  process  there.     a. How  long  have  you  been  working  in  this  capacity?  What  was  your  work   before  this?     b. What  did  you  learn  in  your  training  for  this  position?     c. How  do  you  first  become  involved  with  a  case?  Then  what  does  it  entail?   d. How  is  a  decision  made  about  an  application?  What  factors  go  into  it?     e. What  kinds  of  outcomes  do  you  see  in  the  cases?     f. How  well  do  you  think  your  institution  serves  the  clients  who  come  to  you?   10. [for  lenders]  How  do  you  think  your  institution  and  other  lenders  are  perceived  by   homeowners?  By  housing  counseling  agencies?  What  do  you  think  of  this?     11. This  might  seem  like  a  blunt  question,  but  do  your  clients  deserve  loan   modifications?     a. Why  or  why  not?   b. Are  there  people  who  don’t?  If  so,  who  are  they  or  why  is  that  the  case?   12. Aside  from  any  clients  you  have  met  in  your  line  of  work,  do  you  know  anyone   who’s  going  through  foreclosure  (friends,  family,  neighbors,  church  members,  etc.)?     a. What’s  their  situation?     b. Did  that  change  how  you  think  about  people  facing  foreclosure?     13. Do  you  know  anyone  who’s  been  or  is  homeless?     a. What’s  their  situation?     b. Did  that  change  how  you  think  about  homeless  people?     14. [For  counselors  who  do  credit  repair  and  those  who  do  new  homebuyer  education]   a. What’s  the  purpose  of  credit  repair  counseling/homebuyer  education?     b. What  are  people  supposed  to  learn?   c. Who  are  these  clients?   d. Are  these  classes/meetings  valuable  to  them?  In  what  ways?  Why?     e. Are  there  other  financial  services  that  would  suit  the  people  you  work  with  in   these  ways?  What  would  those  be?  Be  as  specific  as  you  can  be.   15. Your  organization  says  [XYZ]  about  community  development  in  its  materials.  Can   you  tell  me  more  about  this  dimension  of  the  work?     1. What  kinds  of  neighborhoods  and  communities  do  you  envision?     2. How  do  you  work  toward  achieving  these?   3. What  do  you  see  as  getting  in  the  way  of  community  development?     4. What  is  the  role  of  organizations  like  this  one  in  promoting  community   development?   5. [If  applicable]  I  understand  your  office/organization  is  involved  in  the   Neighborhood  Stabilization  Program  (NSP  phase  2)  locally.  What’s  your   involvement  with  that?  What’s  the  intention  of  the  money  you’re  spending?   How  will  you/your  office  decide  (or  did  you  decide)  to  spend  it?   295   16. [Last  question  in  this  section]  Has  working  here  during  the  real  estate  market  crash   changed  anything  for  you  (i.e.,  changed  the  way  you  think  about  anything)?     II.  Family  and  Neighborhood  Background     In  this  research  I’m  interested  in  learning  about  the  current  foreclosure  situation  but  also   about  housing  and  community  more  generally,  including  messages  and  beliefs  about   buying  a  house.  So  it’s  also  of  interest  to  talk  to  you  who  deal  with  housing  in  your  line  of   work  about  where  you’re  coming  from,  where  you  live,  and  so  on.  I’m  going  to  ask  you   some  questions  about  where  you  live  and  your  background.  Remember  that  you  can  skip   any  question  you  don’t  want  to  answer.     20. Where  are  you  from?     a. From  Michigan?  Another  area?  From  US?  Immigrant—from  where?   b. When  did  your  family  move  to  Michigan?  From  where?       21. Tell  me  a  bit  about  your  family:     a. What  brought  you/your  family  here?   b. Where  did  your  parents  work;  your  grandparents?   c. [If  the  person  is  an  immigrant]  Is  purchasing  and  owning  your  own  house   important  in  the  culture  you’re  originally  from?  How  do  people  pay  for  their   houses?       22. Where  did  you  live  as  a  kid?     a. What  was  that  neighborhood/community  like?     23. How  do  you  spend  your  time  off  work?  Family?  Hobbies?  Church  or  community   organizations?       24. Do  you  remember  any  discussions  about  homebuying  from  your  childhood  or  early   adult  years?     a. Do  you  recall  there  being  any  particular  message  about  homebuying?     b. Or  input  from  a  friend  or  family  member?       25. Do  you  know  anyone  who’s  been  or  is  homeless?     a. What’s  their  situation?     b. Did  that  change  how  you  think  about  homeless  people?     26. Will  you  (or  did  you)  encourage  your  children  or  other  people  you’re  close  to,  to   consider  buying  a  house?     a. Are  there  circumstances  under  which  you  would  or  wouldn’t  encourage   someone  you  know  to  buy  a  house?     b. At  this  point,  do  you  think  you  will  buy  a  house  again?  Why/why  not?     27. What  class  do  you  consider  yourself  to  belong  to?     a. What  is  it  that  makes  you  a  member  of  that  class?   296   b. Is  there  anything  that  would  change  the  class  you  belong  to?  What?     III.  Personal  Finance     In  addition  to  learning  about  foreclosures  in  particular,  in  this  project  I’m  also  interested  in   learning  about  how  people  learn  about  money  management  and  what  they  do  to  manage   their  money.  Remember  that  you  can  skip  any  question  you  don’t  want  to  answer.     24. Current  living  situation:  Do  you  rent  or  own  where  you  live?   a. (If  own)  You  said  you  own  your  home.  Why  do  you  own  rather  than  rent?     i. What  kind  of  mortgage  do  you  have  currently?  Are  you  current  on  the   mortgage?     ii. With  what  company?  Is  it  the  original  mortgage  or  a  refinance?   iii. Is  that  the  original  lender  or  a  servicer?  If  it’s  a  servicer,  tell  me  all  the   servicers  you’ve  dealt  with  in  this  mortgage.   iv. Who  owns  your  mortgage?     v. Do  you  know  if  your  mortgage  was  packaged  into  a  mortgage-­‐backed   security  and  sold  to  investors?   vi. What  do  you  remember  about  the  process  of  applying  for  the   mortgage?   vii. Are  you  underwater  on  your  mortgage  (do  you  owe  more  than  your   house  is  worth)?   b.  (If  rent)  You  said  you  rent  your  home.  Why  do  you  rent  rather  than  own?   i. Have  you  owned  a  place  in  the  past?  If  no,  is  this  a  choice?  If  yes,  why   are  you  renting  now?     ii. Would  you  buy  a  house/condo?  Why/why  not,  or  under  what   conditions?   iii. Has  working  here  influenced  your  decision  to  rent  versus  buy?     25. Have  you  ever  declared  bankruptcy?     a. [If  yes]  What  chapter?  Why  that  chapter?     b. When?  What  caused  you  to  declare  bankruptcy?     c. What  was  it  like  going  through  the  bankruptcy  process?   d. Do  you  foresee  circumstances  when  you  might  declare  bankruptcy  again?   e. [If  no]  Did  it  occur  to  you  to  file  for  bankruptcy  when  you  realized  you  would   have  trouble  staying  current  on  your  mortgage?   f. [If  in  process]  How  did  you  decide  to  declare  bankruptcy?  Which  chapter,   why  that  chapter?     26. Do  you  know  your  credit  score?  Is  it:     •  720  –  850     •  700  –  719   •  675  –  699     •  620  –  674   •  560  –  619   •  500  –  559     297         27. Savings  and  investment:   a. [If  behind  on  mortgage]  Have  you  changed  your  savings  or  investment   accounts  since  you  began  struggling  to  pay  the  mortgage?  (I.e.,  tapped  into  or   depleted  savings,  cashed  in  investments,  401K.)   b. What  have  you  had  to  learn  or  change  financially  since  starting  the  loan   modification  process?   c. Where  do  you  get  information  about  how  to  manage  your  money  (i.e.,   specific  books,  professionals,  websites,  news  outlets,  friends  or  family)?     d. Before  you  fell  behind  on  your  mortgage  payments,  were  you  saving  or   investing  money?  Where/how?     e. Where  do  you  get  information  about  how  to  manage  your  money?     f. [If  not  behind  on  mortgage]  Are  you  saving  money  or  making  any  kind  of   investments?  What  are  those?  Tell  me  more  about  your  investments.  What   are  they?  What  were  you  told  about  the  investment  when  you  made  it?  Is   making  an  investment  like  putting  money  in  the  bank  or  different?     28. Have  you  lost  money  since  the  recession  began?     a. [If  no]  Why  is  this  the  case?   b. [If  yes]  On  what  kinds  of  accounts/investments?  What  kinds  of  losses?   c. Are  these  losses  going  to  have  effects  on  you?  If  so,  in  what  ways?   d. Tell  me  more  about  your  investments.  What  are  they?  What  were  you  told   about  the  investment  when  you  made  it?  Is  making  an  investment  like   putting  money  in  the  bank  or  different?   e. Do  you  know  what  kinds  of  things  your  money  was  invested  in?   f. Do  you  know  if  your  pension  or  other  investment  had  bought  mortgage-­‐ backed  securities?     29. Have  you  ever  received  government  assistance  (i.e.,  food  stamps,  WIC,  social   security,  disability,  Temporary  Assistance  to  Needy  Families  [TANF])?     a. What  was  it  and  under  what  circumstances?     b. What  about  unemployment  benefits?     IV.  Political  Context     Before  we  conclude,  I  also  want  to  ask  you  some  questions  about  current  events  and  the   recession  in  general.       40. When  you  imagine  a  person  who’s  being  foreclosed  on,  what  person  do  you   imagine?     a. What  does  that  person  look  like?     b. What’s  their  story?     c. Try  to  recall  if  this  is  who  you  imagined  before  you  were  behind  on  your   mortgage  payments  or  before  the  recession  started.     298                         41. What  sources  do  you  get  your  news  from?  (Names  of  newspapers,  radio   stations/programs,  magazines,  websites,  friends/family)   42. How  do  you  think  we’re  going  to  get  out  of  the  economic  situation  we’re  in?   a. When  do  you  think  the  recession  started  in  Michigan?     b. When  did  you  feel  it  affecting  you  personally?   c. What  do  you  think  is  the  future  of  Michigan?     d. Of  Lansing?   43. Prior  to  the  recession,  how  did  you  interact  with  the  government?   a. Has  that  changed?  How?     44. How  do  you  think  the  real  estate  market  collapse  has  been  handled  (by  banks,  by   politicians)?   45. This  may  be  obvious  to  you,  but  I  assume  you  are  familiar  with  Michigan’s  90-­‐day   law  for  foreclosures  and  mediation  with  lenders?     a. What  was  the  intention  behind  this  law?     b. How  is  it  working?     46. If  you  were  in  charge  of  this  process,  what  would  it  look  like?     a. How  should  the  government  (which—local,  state,  federal)  respond  to  rising   foreclosures?   b. What  would  the  ideal  scenario  for  someone  facing  foreclosure  be?   c. What  are  five  words  that  describe  the  loan  modification  process?   47. What  do  you  think  about  the  idea  of  owners  walking  away  from  a  mortgage?   48. What  is  “the  market?”  How  does  it  work?     49. Who  do  you  think  is  responsible  for  the  real  estate  market  crash?  And  who’s   responsible  for  the  collapse  (and  near-­‐collapse)  of  big  banks  in  the  last  few  years?   50. What  should  government  be  doing  or  not  doing  in  the  economy?   a. How  has  the  bailout  of  “too  big  to  fail”  banks,  also  known  as  the  TARP  money,   been  handled?     b. Should  the  government  have  gotten  involved  with  assisting  these  financial   institutions?     c. What  about  the  government’s  bailout  of  GM?   51. Last  year  Senator  Dick  Durbin  was  quoted  as  saying,  "And  the  banks  —  hard  to   believe  in  a  time  when  we're  facing  a  banking  crisis  that  many  of  the  banks  created   —  are  still  the  most  powerful  lobby  on  Capitol  Hill.  And  they  frankly  own  the  place.”     What  do  you  think  of  this  statement?     299         52. Have  you  followed  discussions  of  credit  card  reform  and  the  proposed  Consumer   Financial  Protection  Agency?  What  do  you  think  of  these  ideas?   53. Do  you  feel  there  is  a  particular  political  party  or  group  that  most  closely  fits  with   your  political  views?   a. Have  you  attended  any  rallies,  speeches,  or  other  political  events  since  the   recession  started?  What  were  those?   b. Who  did  you  vote  for  in  the  last  presidential  election?   54. There  has  been  increasing  news,  government,  and  academic  attention  to  the  middle   class  in  America  since  the  recession  began.     a. What  do  you  think  are  necessary  elements  to  a  middle-­‐class  lifestyle?     b. How  many  (i.e.,  what  percentage  of)  Americans  do  you  think  are  middle-­‐ class?   55. I  have  one  last  question  I  want  to  ask  you  before  filling  in  some  basic  information.   My  research  is  in  part  about  the  idea  of  the  “American  dream.”  How  would  you   define  the  “American  dream”?     a. Is  it  relevant  to  today?  Do  you  think  it’s  possible?     b. Do  you  think  it  was  ever  possible?         VI.  Profile     Age:     Gender:     Are  you:     _____Married?     _____Partnered?   _____Single?   _____Divorced?   _____Separated?   _____Widowed?   _____Other?     Who  lives  in  your  household?  (Please  list  relationships  and  ages)         Race/Ethnicity:     Occupation:     Current  employment  status:         Since  when?       ZIP  code:     Rent?  _____   Own?  _____   If  so,  first  home?   ______     300   3.  Survey  for  Housing  Professionals   (Michigan  Conference  on  Affordable  Housing)     Thank  you  for  taking  time  to  fill  out  this  survey.  This  is  part  of  a  research  project  on  the   housing  crisis  in  Michigan  being  conducted  by  Anna  Jefferson,  a  Ph.D.  candidate  at  Michigan   State  University.  This  survey  is  completely  voluntary  and  anonymous.  Completing  the   survey  indicates  your  consent  to  have  your  answers  used  in  Anna  Jefferson’s  dissertation   and  other  writing.  More  details  and  contact  information  are  on  the  provided  informed   consent  form  (for  you  to  keep).     1.  What  are  5  words  you  relate  to  “house”?     1.       2.     3.     4.     5.     What  best  describes  your  primary  role  at  your  agency?   a. Program  director   b. Foreclosure  intervention  counseling   c. Post-­‐foreclosure  counseling   d. Homeownership  promotion   e. Rental  assistance/affordable  housing   f. Homeless  services   g. Financial  literacy,  credit  repair   h. Outreach   i. Administrative   j. Realtor   k. Lender/servicer   l. Other  __________________________   Americorps  service  member?       Y            N     2.  How  long  have  you  been  in  this  position?   a. Less  than  two  years   b. Between  2—5  years   c. More  than  five  years     3.  Did  you  work  in  lending  or  real  estate  prior  to  your  employment  at  a  housing  counseling   agency?             Y   N   If  yes,  in  what  capacity?     4.  What  best  describes  your  priority  in  your  work?     a. To  preserve  or  promote  homeownership   b. To  find  people  affordable  housing   c. To  help  build  strong  neighborhoods   301   d. To  help  my  city’s  economic  vitality  and  growth   e. To  teach  people  to  be  their  own  consumer  advocate     5.  What  communities  do  you  work  in  (region,  county,  city,  or  neighborhoods)?       6.  What  are  the  biggest  challenges  in  the  communities  you  work  in?           7.  The  thing  that  makes  my  job  hardest  is  when….(fill  in  the  blank,  all  parts,  please)     a. Clients       b. Servicers/their  representatives       c. The  government     8.  It  would  make  my  job  easier  if….(fill  in  the  blank,  all  parts,  please)     a. Clients       b. Servicers/their  representatives       c. The  government     9.  List  the  top  five  words  you  associate  with  community  development:     1. ____________________________________________   2. ____________________________________________   3. ____________________________________________   4. ____________________________________________   302   5. ____________________________________________     10.  What  do  you  think  the  American  Dream  is?  Has  that  changed  in  working  at  a  housing   agency?           11.  Community  activities  you  participate  in  (i.e.,  church,  volunteer,  non-­‐profits,  community   service)       12.  Political  affiliation:     13.  Race/ethnicity:     14:  Gender:       303   4.  Overview  of  Primary  Data  Collected  (August  2009—April  2011)   Table 7. Overview of Primary Data Collected (August 2009—April 2011) Data  Source   Detail   Subtotals   Total   Participant         500  (estimate)   Observation  (hours)     Housing  Counseling  Agencies   300  (estimate)     (February—October  2010)             Training  sessions  and  public   80  (estimate)     outreach  (November  2009— November  2010)                   Community  meetings  and   120  (estimate)     political  rallies               Counseling  session     17   observations  (#)                             Interviews  (#)       63     Housing  professionals  and   34     activists       Homeowners  facing   29     foreclosure                 Surveys   Housing  counselor  survey     27   administered  at  Michigan   Conference  on  Affordable   Housing,  April  12,  2011     304   BIBLIOGRAPHY 305     BIBLIOGRAPHY         Abramovitz,  Mimi  and  Sandra  Morgen     2006   Taxes  Are  a  Woman’s  Issue:  Reframing  the  Debate.  New  York:  Feminist  Press.       Abrams, 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