The New York Review of Ideas » Profiles | June 2009
Bad Foundations
Alyssa Katz tells us that the roots of the housing crisis run much deeper than we think.
By Flora Fair
While many journalists are content to take shortcuts where they can find them, Katz was determined to find the sources who most accurately represented the picture she was seeing. Rather than relying on conventional channels, she dug up sources using her own deductions—cross-referencing Cleveland foreclosure records with bankruptcy records to find matching cases. The reason for this, she explains, is that someone in foreclosure tends to be hard to get a hold of, but that individual’s bankruptcy filing will include his or her attorney’s name.
“I try to find my subjects through public records and other unexpected places,” she says, adding that she‘s hesitant to go to advocacy groups for sources. “Those individuals are carefully selected to have perfect stories where they’re perfect victims, and it clearly shows what the advocacy group is trying to show.”
She called several of the bankruptcy attorneys listed until she found one whose client, Charity Stewart, was willing to share her experience as a first-time homeowner. Stewart, a working woman supporting a family of children and grandchildren and living close to the poverty level, had never owned a home. She was looking for rentals when she saw a sign that said she could own her house for a $500 down payment. A rental deposit would have been $600.
“It was based on that $100 difference that she made the decision to buy the home,” Katz explains. “She did it with a subprime loan from a company called Argent, which is part of one of the biggest and worst subprime loan operations. And she went into foreclosure within two years.”
Stewart, like many low-income first-time buyers, didn’t understand the responsibilities that came with homeownership. When things started to go wrong with her house (which they did quickly), she called the mortgage company, who she assumed was responsible for repairs. She eventually stopped paying her mortgage when the repairs weren’t done. Stewart felt she was mislead by the mortgage company, and that no one ever fully explained her rights and responsibilities.
Far from the hard-luck stories she collected for her book, Katz’s own life has been fairly sheltered—especially, she says, for growing up in New York City during the ‘70s. She was raised in a rent-controlled apartment on Manhattan’s Upper East Side, which was home to writers, photographers and literary agents. Katz’s father, writer Ephraim Katz, compiled The Film Encyclopedia, a comprehensive film guide. Her mother, Helen Rothstein, was a civil servant. Professionally, Katz seems to be the perfect combination of her parents.
Katz headed off to college at the University of Michigan after seeing “The Big Chill”—a movie about a group of friends from the school. There she pursued an interdisciplinary degree in Arts and Ideas in the Humanities, but as graduation approached, she struggled to choose a career path.
“I was offered a job as a canvas organizer,” she recalls. “There was a campaign in the Midwest to get universal healthcare, god bless them. It was an organization that was trying to raise money door-knocking and that kind of stuff.” Katz would have headed up a team doing just that. “Thank goodness I didn’t take it,” she says now, “because that just sounds thankless and horrible, as much as believe in that cause.”
While she was still considering the offer, a friend asked her if she was sure she wanted to give up her writing. It was a question Katz hadn’t considered before. She turned down the job, took an internship at The Nation, and went on to become a cultural critic for The Nation, The Village Voice and Spin. The only problem was that criticism didn’t entirely suit her.
“I felt uncomfortable at times judging others’ work,” she says. She also started to question the value of criticism to tire of its demands. “I just honestly found the work hard because you are in a position of having to project something very personal and deep constantly.”
Her transition to investigative writing involved overcoming her initial fears of the reporting process. She wasn’t used to synthesizing information others provided rather than mounting her own critical analysis. This created a comfort zone for her—allowing her to rely on solid facts and others’ words, rather than expressing her own impressions of someone else’s creation. But impressions do play a role in her investigative writing, and she uses them to form the “dramatic framework,” of her stories.
“I’m very focused on finding concrete evidence, and that can take so many forms: statistics, quotes, historical anecdotes,“ she explains. “But a lot of it is also about feelings, it’s about having spent a lot of time assessing the information, and then reflecting on how I feel about it: Am I uncomfortable? Am I outraged? Do I feel joyous over this?…I’m not there just reporting a set of neutral facts—I’m trying to guide a reader through not just a factual, but an emotional, landscape.”
The emotional landscape of Katz’s stories is often tinged with irony. In a 1999 book review in the Village Voice, Katz wrote:
The Muslim world in the age of fundamentalism is about as safe a place for a serious writer as a train rail is for a penny—it’s not so much a matter of getting in trouble as a question of when it will happen.
And she has sharpened her delivery over the last decade, setting scenes with a tone just sardonic enough to indicate that something is amiss. Katz opens an she wrote recently for Salon, “Predatory lending with a smiley face,” with a Long Beach, Calif. seminar in which 40 mortgage brokers are gathered to learn about the emerging industry of loan modification. In the “glittering ballroom,” the seminar’s hosts, broker Allen Brodetsky and real-estate attorney Steve Vondran, discuss how to make money by renegotiating the terms of defaulted home mortgages, promising troubled homeowners they’ll save money on their monthly bill. The problem, Katz asserts, is that these brokers are actually profiting from a mess they helped create, often with poor results for homeowners. Katz sums it up perfectly in Our Lot in her description of an exchange between a seminar attendee and the hosts: