Mistrust and Betrayal: The Far Deeper Costs of the Foreclosure Crisis - HuffPo

[WillyT]

Mistrust and Betrayal: The Far Deeper Costs of the Foreclosure Crisis
Lauren M. Ross and Gregory D. Squires
Posted: January 6, 2011 03:52 PM

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The financial costs of the seemingly endless foreclosure crisis have been widely reported with Credit Suisse estimating that as many as 12 million families will lose their homes before this is all over. The predatory lending that led to the spike in foreclosures, and the robo-signings coupled with the illegal forcible removal of many families from their homes, promise to keep these issues in the headlines for years to come.

Lost amidst the news reports, legislative hearings, scholarly journal articles and books, documentary films, and blogs of all sorts are the perhaps more profound non-financial consequences. There have been some reports of the family tensions that often surround financial struggles, the hardships children face when they are forced to change schools, and related social stresses. But a deeper, darker challenge may be on the horizon resulting from the mistrust and betrayal families report as a result of the deception they have experienced in the mortgage market. While also feeling shame and embarrassment, even personal failure, for having allowed themselves to be taken in, these families are also aware of the exploitation they have experienced at the hands of their "trusted" financial advisors. That mistrust threatens the recovery some believe has begun in recent months.

As the British sociologist Anthony Giddens has noted, in complex societies where each individual cannot become expert in all the institutional contexts in which they must operate, trust is essential for people to negotiate the various realms, including financial institutions, in which they operate. People must feel secure in the trust networks they establish in order to survive and prosper, and for society itself to advance.

In a series of in-depth interviews nationwide with 22 adults who are at risk of foreclosure (they were either behind in their mortgage payments at some point in the past two years or, in two instances, had already lost their homes due to foreclosure) all respondents expressed both anger and personal responsibility. The interviews lasted between 30 and 90 minutes. In no question with any respondent was the word "trust" used. But in every case but one, the respondents explicitly referred to the mistrust they now have for anyone associated with the mortgage lending industry in particular or financial services generally.

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More: http://www.huffingtonpost.com/lauren-m-ross/mistrust-and-betrayal-the_b_805409.html

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