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Busted: Life Inside the Great Mortgage Meltdown |  | Author: Edmund L. Andrews
Publisher: W. W. Norton & Company
Category: Book
List Price: $25.95
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Seller: internationalbooks
Rating:  45 reviews
Sales Rank: 563516
Media: Hardcover
Edition: First Edition
Pages: 220
Number Of Items: 1
Shipping Weight (lbs): 1.1
Dimensions (in): 9.4 x 6.4 x 1
ISBN: 0393067947
Dewey Decimal Number: 332.720973
EAN: 9780393067941
ASIN: 0393067947
Publication Date: May 22, 2009
Availability: Usually ships in 1-2 business days
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Product Description
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.
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| Customer Reviews:
Showing reviews 1-5 of 45
 Interesting, educational and irritating August 12, 2010
scoobie
3 out of 3 found this review helpful
I was eager to read this book because i have been following the whole mortgage/economic meltdown. I have also read a lot of Andrews' NYT articles, so I was interested in hearing his first-hand perspective of the process.
Andrews is an excellent writer. Unlike other posters, i don't believe he was looking for sympathy. He was very upfront about his lack of responsibility. i also appreciated his ability to break down the whole financial fiasco - the nation's not just his - into layperson's terms. He did a lot of research and explained it very well.
The only parts of his writing that I found unconvincing were his defenses of Patty. The woman irritated me. No matter how much Andrews tried to cover for her, she continued to come off to me as a selfish, immature, spoiled, lazy princess. if my bringing home $2,500 a month was the difference between providing the basics for me and my family, or losing everything, I would bring home $2,500 a month. I'm not all talk. I've been there and I've done it. Also, if she was too stressed out to work, could she not keep the house up? Andrews description of the place being a mess made my blood boil. Is Patty just good for nothing?
I did a little research and learned our little princess had twice filed for bankruptcy before Andrews' book was published. That's an interesting fact for someone who hadn't produced an income in 20 years. And sorry Andrews, I have to defend the Pew Institute for firing her, tho i only read your hearsay account of the situation. Who wants to work with someone like her? No one.
anywho, the book did hold my attention. It may even make a pretty good movie.
 Convenient to leave things out June 12, 2010
Kelly Jensen (STACKED Books blog) (Wisconsin, USA)
2 out of 2 found this review helpful
Andrews is a journalist for The New York Times and more specifically, an economic reporter pulling in a 6-digit salary every year. In the midst of the housing frenzy, he chose to invest in a house on a low-doc mortgage well beyond anything he could ever imagine to afford. HE KNEW THIS going in, and yet, he followed his lust and jumped into it.
Busted does a little bit of what Alyssa Katz's book "Our Lot" does in unraveling the complexities of the housing collapse on the banking side, but what made this book stand out to me was that Andrews himself is a person facing foreclosure and the loss of his house. He gives us the background into how banks were misleading underrepresented groups with subprime lending, as well as how bankers and underwriters were approving (and even encouraging) applicants to lie or not even mention important things like income in their mortgage applications. Reading this after the hellacious experience I had getting a mortgage made me grateful again it was such a horrible experience.
That said, this book shows us the utter greed people like Andrews brought to the collapse of the housing market. He, with his 6-figure job, background in economics, and education, knew better than to do what he did, but because he was lusting after more (see the book "House Lust"), he chose to jump in anyway. And it doesn't work. This is his attempt to document it.
Unfortunately, while this book reads well and does a good job of putting a face to the crisis, I never once felt sympathetic for Andrews. I felt even less sympathetic when I found out later he omitted some pretty important details in his experiences (like the fact his new wife had filed for bankruptcy twice). Reading this in conjunction with Katz's title, though, was important because it emphasizes that there was no one cause for why real estate fell to pieces. It was a combination of greed from a number of sources, as well as deception from a number of sources. Bonus: he has a little report, too, in the NYT for your reading pleasure.
Yes, it's stupid, yes, it's shallow, but it does give insight June 10, 2010
Compleat Reader
3 out of 3 found this review helpful
Insight into what? Into the incredibly childish, blinkered, pig-ignorant "thinking" of so many of our population, including the people who really should know better. For goodness's sake, the author was a leading financial reporter for the New York Times! And this man couldn't see the writing on the wall? Couldn't curb his insane spending? I wouldn't call myself a person with any real economic knowledge, but in 2004 and 2005, while looking for my home (and having been offered a $250,000 pre-approved mortgage), I knew that one does not buy more house than he or she can afford. I knew that a mortgage payment should be around a quarter of your income, and that a mortgage that changes interest rates is going to mean trouble. I also saw clearly, while the reporters and financial sector were yelling at us to jump on the bandwagon, that we were looking at a major economic crash because of the housing bubble. Now, if I could figure that out just by reading a few articles and looking around and applying a little common sense, why the hey couldn't someone whose PROFESSION is analyzing the economy figure it out? (What I didn't foresee was how Hank Paulsen and Goldman Sachs would use this crash as the opportunity to wipe out their competitors and make themselves even richer. There's a reason people see conspiracies everywhere: because this sort of horror LOOKS like a conspiracy.)
The book is, of course, as shallow as its author. But it's still worth a read -- which won't take long -- because of what we learn about so many of those around us. If Mr. Andrews constitutes a "normal" American, then our fellow Americans need all the regulatory help they can get, because they're obviously incapable of managing their own lives in the real world.
 Transparent Fiction. Don't wast your money. May 17, 2010
D. Jankowski (Baltimore, MD)
4 out of 4 found this review helpful
I made it through about half of the book, before I really couldn't take anymore. The author clearly has a "not-my-fault" attitude about everything that happened in his upside-down life. I stopped counting his laying of blame on the Bush Administration after about the hundreth time metioned in the book. Apparently, he includes Senator Chris Dodd (Democrate, and head of the Senate Banking Committe) and Anthony Mazula (Head of Countrywide and CA Democratic Fund Raising Committee) as part of the Bush Administration.
In addition to displaying a transparent political bias, he clearly does not understand some of the basics of mortgage banking. His explanation of Mortgage Backed Securitites sounds like he looked it up on Google and took some internet posting as his defining basis. If he had any idea of how MBSs worked, he would have discussed the pass-through characteristics of the security instrument, and how lenders/servicers do have skin in the game based upon the pass-through responsibility, buy-back requirements, and MI claim denials.
I rented this book from the library. Thank God I didn't waste my money on it. When I return it, I will strongly suggest they move it from the Business Section to the Fiction or Fantasy Section.
If you want a real explanation, deviod of the political hatchet job, of what caused the mortgage market melt down, I suggest you consider "Confessions of a Subprime Lender" by Richard Bitner.
 Surprisingly refreshing April 6, 2010
N. Tuzov (Illinois, USA)
2 out of 7 found this review helpful
This book is surprisingly refreshing against the background of more renowned sources of economic analysis such as The Economist. I suspect that many financial columnists are no better experts than Mr. Andrews, but, to disguise that, they infuse their articles with annoying swarms of ifs, buts, and maybes. Another issue is that many journalists might not be allowed to speak ill of certain financial institutions and individuals, even those who deserve all the insult they can get. To his credit, Mr. Andrews does none of that smoke-blowing.
A good part of the book is dedicated to the issue of market regulation, which turned out of most interest to me. There is no doubt that Greenspan and other regulators have had a real difficulty with identifying asset bubbles. If that had been otherwise, they would've been successful hedge fund managers as opposed to relatively low-paid regulators. Moreover, even professional money managers who realize that the assets are way overpriced, find it difficult to go against the flow. To fend off impatient investors and/or maintain a losing position on margin, one has to be able to guess the bubble peak with a few months accuracy, which is far from simple. For instance, Stock Market Wizards: Interviews with America's Top Stock Traders contains an interview with a trader who lost by shorting Internet stocks during the dotcom bubble because his timing was off. A more successful example of Michael Burry (see The Big Short: Inside the Doomsday Machine) who managed to cash in on the mortgage collapse is an exception that only confirms the rule: as a contrarian, Burry got much abuse from his investors while he was losing and little gratitude when he succeeded. As Keynes used to say, for a money manager it is a lot more preferable to fail conventionally than to succeed unconventionally.
Andrews describes Greenspan as a firm believer in the "self-correcting power of free markets", which I find very odd. How can a person old enough to remember the default of Confederate bonds believe in something like that? Naturally, one can always point to alleged lobbyism and corruption, but I think there is more than that: preventing calamities is a very ungrateful job because, by definition, its results are not observable. If an American statesman engages in it, he subscribes to getting flogged every single day for every political and economical downside of regulation. The upside, on the other hand, is illusory because it's impossible to prove that one has avoided a disaster, unless a time machine is at hand. If that's the case, then no wonder that Greenspan preferred to avoid being a dislikable risk cop. Stepping aside and cleaning up the mess once in a while is a much happier occupation.
One may argue that regulation is easily justified based on the historical experience, but remember that people's short memory and instant gratification bias are at the core of what happened. No doubt, in 2010 the support for regulation is broader than ever, but give it a few calm years and the talks of "self-correcting power of free markets" are likely to reappear.
In the end, both personal and financial gambles of Mr. Andrews proved disastrous. His book, however, is a much better investment. Buy it and you'll learn more about economy and subprime crisis than from reading a $90 worth of The Economist.
Showing reviews 1-5 of 45
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