Homeownership, debt and default : the affective value of home and the challenge of affordability.

The promotion of homeownership as a national housing strategy has been a central element of American housing policy since the National Housing Act 1949. Indeed, in recent decades, successive administrations have emphasised the role of the expanding homeowners hip sector, particularly for low-income and minority households, in enabling citizens to realise the ?American Dream.? Yet, as the recent mortgage lending crisis has highlighted the risks associated with homeownership, debt and default , the tensions that exist between the political ideology of homeownership and the promotion of owner-occupation as the sine qua non of the American Dream, on the one hand, and the crisis of affordability and debtor default facing many American families on the other , are brought into sharp relief. This paper focuses on these tensions by scrutinising a paradox of government housing policies which promote an ideology of homeownership yet which run parallel to a legal context that does not adequately protect homeowners, particularly those who are at high risk, from foreclosure and repossession. This paper offers a more coherent analysis of the ways that law protects (or does not protect) the homeownership interest in the context of foreclosure, with a particular focus on the losses that are suffered by home occupiers in the event of losing their homes. In societies where homeownership has been promoted as the most desirable tenure, owning a home is heavily loaded with social and cultural meanings. Homeownership is not only associated with financial security, but is also strongly associated with personal and family security. Government policies seeking to extend homeownership often employ a rhetoric of homeownership as empowering, that it gives citizens a stake in society , that it enhances stability, security, control and so contributes to the ?social fabric.? Yet, alongside the potential benefits, borrowers must bear a range of risks in order to finance the purchase of their homes, and so to pursue this financial, personal and family security. While the perilous positions of those caught up in the current subprime mortgage lending crisis has received much attention in the media ? with considerable concerns particularly for the exposure of low-income households to increased risks of foreclosure ? it is important that, alongside the debate on rescue schemes, responses to this crisis include reflection on the underlying legal, theoretical and phenomenological issues associated with default and foreclosure. This paper considers the affective values of home as they have been socio-culturally embedded in home ownership, and identifies a range of costs ? both financial and non-financial ? that can result when occupiers lose their homes through foreclosure proceedings or through bankruptcy, and which affect not only dispossessed occupiers (and their families) but also significantly impact other stakeholders across society.