The most enduring scientific discovery from the subfield of economic anthropology has been its demonstration, from dozens of empirical cases across cultures and time, that durable forms of exchange and commerce are frequently marked by strong social ties and mutual interests. "Trust" in financial markets, as many economists, anthropologists, and other social scientists have shown, is essential to preventing market failures and stimulating recovery. In 2007, an acute spike in subprime mortgage defaults in the United States brought about a global financial crisis within a year. The origins and macro-level consequences of the mortgage crisis have been studied quantitatively, but less is known about how the mortgage modifications of 2.5 million Americans since 2007 have inspired new understandings of mortgaging, a model of American indebtedness. This study will explore how ideas about mortgaging have changed, with the aim of identifying what conditions are necessary to restore faith in housing markets.
Dr. Noelle Stout of New York University will investigate how unpaid debt fosters social bonds through an investigation of the imagined ties between homeowners and lenders in the context of the 2008 subprime mortgage crisis. Through ethnographic research in the Californian Central Valley, one of the fastest-growing and hardest-hit regions in the nation, this study asks how homeowners' encounters with lenders and government agencies are reshaping the social institution of mortgaging. Dr. Stout will conduct ethnographic research among homeowners, mortgage lending professionals, and state-funded housing counselors which includes in-depth case studies, semi-structured interviews, media analysis, and participant observation in a home loan counseling center and three neighborhoods.
By applying models of debt formulated in non-capitalist economies to a late-capitalist cultural milieu, this research promises to significantly advance scholarly understandings of how obligations between people remain central to financial markets, which are typically characterized as realms of rational action devoid of mutuality. Moreover, given the extent to which the crisis and fragile recovery of U.S. mortgage markets has transformed daily life for millions of Americans, Dr. Stout's findings will be of interest to policymakers, personnel at community organizations, and government officials working on consumer protection, housing development, and mortgage assistance programs. More broadly, an ethnographic purview of the 2008 mortgage crisis and the subsequent rise of modification programs promises to show how the shifting terrain of home ownership has transformed the meaning of American middle-class stability and national solvency.
