Even the Smartest Ones Lose Their Homes

May 26, 2009

Even the Smartest Ones Lose Their Homes
Monday, May 18, 2009, by Dakota

First, Edmund Andrews, an economics reporter for the New York Times (who makes $120,000 a year), falls in love, and then he buys a $460,000 house in Silver Spring, Maryland, and then he takes out two mortgages (a primary mortgage of $333,700 and a “piggyback” loan for $80,300). Here’s how his broker convinces him not to worry about the loans: “‘Don’t worry,” Bob reassured me, saying what almost everybody else in real estate was saying at that moment. “The value of your house will be higher in five years. You’ll be able to refinance.'” And then the credit card debt starts piling up, and then his wife gets laid off, and then they default on their mortgage, but JPMorgan Chase is so busy dealing with the mess of the housing market that the bank is too busy to foreclose on his home. Wondering how he, an economics writer, failed to understand what he was doing (well, he knew he was gambling), Andrews ends his essay this way: “Eight months after my last payment to the bank, I am still waiting for the ax to fall.” [NY Times magazine]

reprinted from Curbed LA


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