NYT personal credit crisis: an accident waiting to happen

Last Sunday, the New York Times Magazine section ran a story about one Timesman’s brush with the subprime mortgage crisis — a tale that could lead to the loss of his home, bought near the peak of the housing bubble. But it turns out, economics reporter Edmund Andrews may have omitted an important detail from an otherwise riveting story of financial seduction and folly. Megan McArdle of theatlantic.com does some excellent digging:

At the end of his book’s harrowing account of mortgage mistakes and credit card crises, Edmund Andrews writes: “While our misadventure had certainly been more extreme than those of many other Americans, our situation was not all that unusual.” And indeed the book reads like the story of an American Everyman, easily sucked in to the alluring world of easy credit as he struggled to blend a new family. The terrifying implication is that it could happen to you–to anyone who leads with their heart and not their head.

But en route to that moral, it turns out the story has been tidied up a little. Patty Barreiro, Andrews’ wife, has declared bankruptcy twice. The second time was while they were married, a detail that didn’t make it into either the book or the excerpt that ran in last Sunday’s New York Times Magazine.

Andrews’ desire to shield his wife is understandable–hell, laudable. No decent person wants to parade their spouse’s financial trouble in front of the world. But this is material information that changes the tenor of his story. Serial bankruptcy is not a creation of the current credit crisis, and it doesn’t just happen to anyone, particularly anyone with a six figure salary.

via Megan McArdle.

Curiously, Andrews responds to McArdle indirectly on PBS. He claims that his wife’s bankruptcies were basically irrelevant to the story. But McArdle will have none of it. Andrews may have been a surprisingly easy mark for a smooth-talking mortgage broker. On top of that, he apparently married a woman with a big problem managing money. Subprime crisis or not, it looks as if Andrews credit difficulties were an accident waiting to happen.

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