Busted: Life Inside the Great Mortgage Meltdown

Busted: Life Inside the Great Mortgage Meltdown

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by Edmund L. Andrews
     
 

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The fiasco that sank millions of Americans, including one journalist, who thought he knew better.
A veteran New York Times economics reporter, Ed Andrews was intimately aware of the dangers posed by easy mortgages from fast-buck lenders. Yet, at the promise of a second chance at love, he succumbed to the temptation of subprime lending and became part of the

Overview

The fiasco that sank millions of Americans, including one journalist, who thought he knew better.
A veteran New York Times economics reporter, Ed Andrews was intimately aware of the dangers posed by easy mortgages from fast-buck lenders. Yet, at the promise of a second chance at love, he succumbed to the temptation of subprime lending and became part of the economic catastrophe he was covering. In surprisingly short order, he amassed a staggering amount of debt and reached the edge of bankruptcy.
In Busted, Andrew bluntly recounts his misadventures in mortgages and goes one step further to describe the brokers, lenders, Wall Street players, and Washington policymakers who helped bring that money to his door. The result is a penetrating and often acerbic look at the binge and bust that nearly bankrupted the United States.
Enabled by know-nothing complacency in Washington, Wall Street wizards used "collateralized debt obligations," "conduits," and other inscrutable financial "innovations" to put American home financing into hyperdrive. Millions of Americans abandoned the safety of thirty-year, fixed-rate mortgages and loaded up on debt. While regulators insisted that the markets knew best, Wall Street firms fragmented and repackaged unsound loans into securities that the rating agencies stamped with triple-A seals of approval.
Andrews describes a remarkably democratic debacle that made fools out of people up and down the financial food chain. From a confessional meeting with Alan Greenspan to a trek through the McMansion bubble of the OC, he maps the arc of the Frankenstein loans that brought the American economy to the brink.
With on-the-ground reporting from the frothiest quarters of the crisis, Andrews locates what is likely to be the high-water mark in America's long-term embrace of higher borrowing, higher risk-taking, and the fervent belief in the possibility of easy profits.

Editorial Reviews

Booklist
Provides important information on the recent mortgage debacle and the hazards of consumer debt. A must-read...— Mary Whaley
Bloomberg
Andrews uses his travails as a prism for viewing the forces behind the bubble. . . . Step by step, he investigates the institutions that gave him the rope with which to hang himself.— James Pressley
Economic Principals
A fascinating meditation on the experience of the crisis from the point of view of those facing foreclosure.— David Warsh
The Washington Post
Read Busted for the insight. . . .The president and every member of Congress should read this book.— Michelle Singletary
Columbus Post Dispatch
The fact that lenders were happy to provide the money lies at the heart of Andrews' compelling book: Borrowers and lenders alike were drunk on credit and blind to the risks.— Jim Weiker
The Wall Street Journal
[T]he value of this vividly written history is in the way it helps to explain how our country reached the point where about one out of 10 home mortgages is either overdue or in foreclosure. Some people blame lax regulation. Others point to loose monetary policy at the Federal Reserve and greed on Wall Street.
Mr. Andrews's book makes it clear that the real culprit is human nature.— James R. Hagerty
The New York Times Book Review
Andrews’s autopsy on his mortgage and the conditions that helped produce it is sharp and at times mordantly funny.— Tom Vanderbilt
Mary Whaley - Booklist
“Provides important information on the recent mortgage debacle and the hazards of consumer debt. A must-read...”
James Pressley - Bloomberg
“Andrews uses his travails as a prism for viewing the forces behind the bubble. . . . Step by step, he investigates the institutions that gave him the rope with which to hang himself.”
David Warsh - Economic Principals
“A fascinating meditation on the experience of the crisis from the point of view of those facing foreclosure.”
Michelle Singletary - The Washington Post
“Read Busted for the insight. . . .The president and every member of Congress should read this book.”
Jim Weiker - Columbus Post Dispatch
“The fact that lenders were happy to provide the money lies at the heart of Andrews' compelling book: Borrowers and lenders alike were drunk on credit and blind to the risks.”
James R. Hagerty - The Wall Street Journal
“[T]he value of this vividly written history is in the way it helps to explain how our country reached the point where about one out of 10 home mortgages is either overdue or in foreclosure. Some people blame lax regulation. Others point to loose monetary policy at the Federal Reserve and greed on Wall Street.
Mr. Andrews's book makes it clear that the real culprit is human nature.”
Tom Vanderbilt - The New York Times Book Review
“Andrews’s autopsy on his mortgage and the conditions that helped produce it is sharp and at times mordantly funny.”
Publishers Weekly

"As I write in February 2009, I am four months past due on my mortgage and bracing for foreclosure proceedings to begin." Thus begins this cautionary and critical examination of the housing crisis, a story that turned personal when New York Times economics reporter Andrews got caught up in the housing bubble after falling in love with a woman and a house. Bringing in $120,000 a year in salary-most of which went to child support and alimony to his ex-wife, Andrews says he was able to get a "don't ask, don't tell" mortgage with the assumption that his new wife, Patty, would be able to get a job to keep them afloat, an expectation that didn't work out as planned. Because of his economics journalism background, Andrews says he "should have avoided the mortgage catastrophe," and he castigates himself as well as fellow borrowers, the financial industry that took advantage of them and a government that didn't put the brakes on the crisis that many economists warned about but that Alan Greenspan, the Bush administration and others ignored. This deeply personal exposé is timely and sobering in its candor. (June)

Copyright © Reed Business Information, a division of Reed Elsevier Inc. All rights reserved.

Product Details

ISBN-13:
9780393067941
Publisher:
Norton, W. W. & Company, Inc.
Publication date:
05/28/2009
Pages:
240
Sales rank:
656,754
Product dimensions:
6.44(w) x 9.50(h) x 0.90(d)

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Meet the Author

Edmund L. Andrews is an economics reporter. A contributor to the New York Times for sixteen years, he is currently a senior Washington writer for the Fiscal Times. He lives in Silver Spring, Maryland.

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Busted: Life Inside the Great Mortgage Meltdown 3 out of 5 based on 0 ratings. 10 reviews.
Anonymous More than 1 year ago
This book is a personal bailout in the guise of a memoir of a family's finances. In a nutshell: middle aged guy ditches wife and three kids for a woman who ditches her husband and four kids to be with him. Convinced that theirs is a love that shines brighter than the world has ever seen, he buys a house he knows he can ill afford because, well, they just want it. He doesn't have the money, and his new wife doesn't want to work, but he deserves it, you see. And, as an economics reporter for The New York Times, he knows exactly how to game the system. Until the system collapses. Edmund Andrews either doesn't have the skill or self-awareness to render himself or his wife in a sympathetic way. He is clearly besotted with her, although, hard as he tries to convince us of it (by telling us over and over again how sexy she is, how much he admires her high fashion sense and her love of fine food), it is exceedingly difficult to understand what he sees in her, or she in him. They both come across in his telling as nasty, self-involved, entitled people. As for the rest of it - the housing crisis, predatory lending, etc. - it's in there, and what there is, is okay. But you can pretty much get that information anywhere. There's a bit more to the story that the author isn't telling that some readers think is material to the story. But you'll have to go elsewhere to find out.
Anonymous More than 1 year ago
Anonymous More than 1 year ago
I got about half the way through and realized, the common thread seems to blame Bush and Greenspan. We all know there is plenty of blame, mainly on the left of the aisle for these shady loans. This, from a guy who should have know what he was doing and did not even know to get a home inspection. Kinda of hard to feel sorry for him especially when he has not taken full responsibilty for his actions.
Anonymous More than 1 year ago
LouisHowe More than 1 year ago
Andrews writes a great tale of woe while explaining the financial shenanigans Wall Street created to lure the greedy, needy and in Andrews's case, love struck. It's hard to imagine a sophisticated NY Times financial reporter becoming burdened with a $500,000 mortgage while struggling through a divorce on a reduced take home income of less than $3,000 per month. Andrews is twice busted. First by engaging in a dangerous bet on ever increasing real estate values, and second, by being blinded by love for a twice bankrupt beautiful, but dysfunctional woman. Two hits to the chops that even this book deal won't fix.
Anonymous More than 1 year ago
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Anonymous More than 1 year ago
I found this book fascinating and brave. Andrews explains how this all happened with clarity. Great book!