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Buyer Beware: Mortgage Horrors

I saw this NY Times article on Digby's site and it's just awful. As Edmund, a NY Times economic reporter, writes: If there was anybody who should have

I saw this NY Times article on Digby's site and it's just awful. As Edmund, a NY Times economic reporter, writes: If there was anybody who should have avoided the mortgage catastrophe, it was I.

Read his personal saga of getting sucked into the mortgage crisis. It's riveting. I watched this thing from the start because I sold my house right before the mortgage lenders lost their minds and almost destroyed the world. They should have been the firewall that prevents the virus that infects the system, but they turned out to be the virus themselves.

If there was anybody who should have avoided the mortgage catastrophe, it was I. As an economics reporter for The New York Times, I have been the paper’s chief eyes and ears on the Federal Reserve for the past six years. I watched Alan Greenspan and his successor, Ben S. Bernanke, at close range. I wrote several early-warning articles in 2004 about the spike in go-go mortgages. Before that, I had a hand in covering the Asian financial crisis of 1997, the Russia meltdown in 1998 and the dot-com collapse in 2000. I know a lot about the curveballs that the economy can throw at us.

But in 2004, I joined millions of otherwise-sane Americans in what we now know was a catastrophic binge on overpriced real estate and reckless mortgages. Nobody duped or hypnotized me. Like so many others — borrowers, lenders and the Wall Street dealmakers behind them — I just thought I could beat the odds. We all had our reasons. The brokers and dealmakers were scoring huge commissions. Ordinary homebuyers were stretching to get into first houses, or bigger houses, or better neighborhoods. Some were greedy, some were desperate and some were deceived...read on

He was so honest about his financial situation and his relationship with his wife that it lends the article the kind of credibility talking heads on TV will never have.

And I agree with Digby:

This is one of the bravest articles I've ever read. But it's important to read how an intelligent, successful person could get themselves caught in the maw of the sub-prime mortgage meltdown. It wasn't just a bunch of illegals lying on their mortgage applications. There was a whole industry devoted to seducing people into believing they could easily have things they couldn't afford. After all, our whole society was screaming at the time that you were a sucker for not getting in on the game. And everyone has some capacity for believing what they want to believe. It was a perfect American scam.

I rent these days and was lucky enough not to have destroyed myself before the fools gold rush began. If the financial experts got blinded by it, what chance did the average American family have against this massive financial con game?

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