New York Times economics reporter Edmund Andrews was smart enough to avoid a financial disaster like the mortgage crisis. But “I had two utterly compelling reasons for taking the plunge,” he writes: “The money was there and I was in love.” With a new fiancée—and back-breaking alimony payments to his first wife—he bought a $460,000 home, using a “liar’s loan” mortgage, based on a fib about his salary.
“I am here to enable dreams,” a mortgage broker told him, saying it was up to Andrews to accept the risk. But he couldn’t. Shuttling all his cash into the mortgage, he racked up $50,000 in credit card debt. Then his wife lost her job. And late-night panic attacks ensued. Andrews applied for loan modification, but the bank was swamped. It simply had too many foreclosures to handle. “Eight months after my last payment, I am still waiting for the ax to fall.”