by Nancy Mehegan
"Busted: Life Inside the Great Mortgage Meltdown" by Edmund L. Andrews
A NY Times Economics Reporter Goes Bust
This interesting book gives the personal story of the "mortgage meltdown" of an economics reporter for the NY Times, Edmund Andrews. Yes, an economics reporter! It outlines how he bought a mortgage, and slowly began to sink in the mortgage quagmire, 4 months in arrears.
In his role as a NY Times reporter, Andrews actually spoke directly to well known figures. He spoke to Alan Greenspan about the mortgage crisis and interjected his personal financial troubles and fear of foreclosure. Andrews relates the conversation:
"First, Greenspan "looked appalled. Then he looked perplexed. And for the first time that I could remember, his patient and gravelly voice turned curt and commanding. 'Why did you do it?' he asked, interrupting me in midsentence. I felt like a teenager who had just told his father he had crashed the family car."
Greenspan on regulation: "best regulation was enlightened self-interest"
HUH????
What was so "enlightened" about the banks and mortgage lenders?
Andrews' financial troubles began in 2004 when, in the middle of divorcing his first wife, he and his future second wife bought a house.
His home was $460,000. Monthly alimony payments of $4,000, they had $50,000 credit card debt, an annual salary of $130,000.
No Loan Officer asked for Proof of Income
When he met with loan officers they did not require salary pay stubs or his federal tax return, a "Don't Ask, Don't Tell" policy prevailed. Wha?? It really is ridiculous, if you think about it.
How did it all happen?
1) Andrews thought "he could beat the odds"
2) A lax banking system irresponsibly provided a mortgage
3) A regulatory system was dysfunctional
In the mortgage meltdown, some people thrived and others suffered.
"Busted" is a great inside view with the insights of an expert in economics. Unusual look at the mortage crisis!
