trust underwater

NYTimes | As Grace, a nonnative speaker, recalled it, the man at the bank appeared to be saying, ‘‘Congratulations, you've won a house!'' And since all the people around her seemed to be scoring their own piece of real estate, nothing about this struck her as preposterous. Only now the loan was eating up something like 75 percent of her income, and the rate on her second trust was about to double, and she didn't how she could continue to keep up with the payments. She hadn't understood that her house could plummet in value while the interest rate on her loan soared toward oblivion. No one ever explained that part.

And now to the other emotions this mortgage process had provoked in me — self-doubt, persecution, self-righteousness — I had to add some amount of shame, as well. I had been blaming other, less conscientious borrowers for our predicament, but of course Grace hadn't been greedy. She had been duped by a guy in a suit, even if she should have asked more questions than she did. And now when I called brokers to check the rates or float some new financing idea, I found myself seething. It wasn't that they wouldn't lend me all the money I wanted - it was the utter sobriety they seemed bent on projecting, the way I could almost hear their shirt collars rustle as they knowingly shook their heads at me across the telephone line. After all, I reasoned, they were the ones who had gone and exploded a yawing hole in the American economy, not me or Grace, by pushing on unqualified buyers the kinds of gimmicks the brokers barely understood themselves. And yet, the bankers seemed to regard themselves now as passive casualties in our national train wreck.

They taught us, back in my freshman-year economics class, that financial catastrophes were crises of faith, and this is a theory held by the most influential economic advisers in Washington. The national engine sputters and fails, the thinking goes, when consumers no longer trust in the value of the currency or the banks that stockpile it. What they never explained, though, and maybe what a lot of us are learning now, is the way such once-in-a-century implosions erode our faith in one another, too, and in the institutions we grew up with and even in ourselves. The collapse of the housing market and the contraction of credit go right to the core of our national identity, forcing us to readjust our expectations for what we can attain and what we deserve. And when we come to understand that we may never really be able to afford even a modest row house or that those of us who live more comfortably will never be comfortable enough to buy into the perfect school district or to add that cottage by the beach, then we cast our anxious glances around for someone to blame. Culprits aren't hard to find. We are, most of us, responsible, if only because we wanted so badly to believe.

Not long ago, my wife and I finally settled on a new house in a close-in suburb, along with exactly the loan I probably should have had all along: a no-frills, 30-year fixed-rate relic, the same dependable model our parents always had. The house itself is a spacious, if deteriorated split-level with an extra room for Grace, should it turn out that she needs somewhere to stay for a while. We like having her around, and it might serve as good reminder that there are worse fates for an American homeowner than having to live with orange Formica countertops or not being able to add the turret of your dreams.