Unbelievable. (Updated)

UPDATE: Thanks to Raina and Decorno for the update to this post. Apparently, Patty Barreiro, the author's wife (pictured above) has a history of multiple bankruptcies which was intentionally, some might say egregiously, left out of the article. Can you imagine?

Megan McArdle from The Atlantic monthly uncovered the dirt. Here's an excerpt:

"In September 1998, California bankruptcy court records indicate that Patty and her first husband declared bankruptcy. The financial statement they filed with the court indicated family income of $174,000 in 1996, $87,000 in 1997, and $126,000 in the first nine months of 1998. The income fluctuations are not surprising, given that her husband was in the film production industry. By the time of the filing, the couple owed about $30,000 on 8 credit cards, over $200,000 in back taxes, and almost $15,000 in private school tuition, as well as substantial car and mortgage payments.

[Then] In 2007, nearly as soon as she was eligible, Patty Barreiro filed again in Montgomery Country. ...The bankruptcy code requires filers to wait 8 years after a previous Chapter 7 discharge. Barely four months after she became eligible, Patty Barreiro filed again."

Here's a link to The Atlantic Monthly article.

Here's the original article from the New York Times Magazine:

My Personal Credit Crisis by Edmund L. Andrews

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 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.

For the entire article, click here.

If you are not personally going through it, this article will illustrate how the mortgage crisis happened: one stupid decision mortgage at a time.

I saw this coming. I did. My husband is a real estate lawyer and he would come home with tales of refinances that made my head spin. I remember asking him in the late spring of 2007, "What if it all came crashing down at once? Could we have another depression?" He said, "It couldn't happen. There are too many safeguards in the system to allow a total financial collapse."

Right.

On a related note, I'll bet this guy sure feels stupid (his book was published in Feb. 2006):

Doh!