New York Times Reporter Bankruptcy Saga Actually About Love, Not Money
Remember the harrowing story of Edmund Andrews, the New York Times economics reporter who got himself into a debt nightmare and defaulted on his mortgage? He has a book out about it and a big excerpt in last week's Magazine. He's also all over radio and TV.
The central tension of Edmund's story is the gulf between his attitude toward his money problems (understandable panic) and the attitude of his new wife Patty (whatever). This tension is made more unsettling because Patty seemed to be responsible for much of the overspending.
The marriage tension aside, Edmund's story is told as a got-carried-away could-have-happened-to-anyone saga that many Americans can relate to, especially in an era in which "everyone was doing it." But as the Atlantic's Megan McArdle has discovered, there are key details that Andrews is leaving out.
Specifically, Andrews' wife Patty has had this problem before. Twice.
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.
In September 1998, California bankruptcy court records indicate that Patty and her first husband declared bankruptcy... The bankruptcy code requires filers to wait 8 years after a previous Chapter 7 discharge. [In 2007], barely four months after she became eligible, Patty Barreiro filed again. And the filing shows some suggestion of strategic debt management...
Serial bankruptcies can, of course, happen to anyone with enough bad luck. But they usually don't. And when they do, they usually hit people with marginal incomes that leave no margin for error in the budget. Most people, even in LA, are able to build a sustainable budget out of an income in the low six figures.
Moreover, pesky bad luck isn't really the picture painted by either filing. Rather, Ms. Barreiro seems to have spent most of the last two decades living right up to the edge of her income, and beyond, and then massively defaulting. If you structure your finances so that absolutely everything has to go right, it's hard to blame the mortgage company when you don't quite make it.
Lots more details in McArdle's story at The Atlantic >
Needless to say, these details change the story. I understand why Andrews omitted them, but I also feel more than a little misled. The real Edmunds story is about the warped behavior produced by love, not money.
UPDATE: Ed Andrews responds to Megan McArdle:
It is hard to believe that anybody would accuse me of trying to airbrush a story in which I recount the cringe-inducing details of my calamitous plunge into junk mortgages.
But Megan McArdle, a blogger for the Atlantic, accuses me of omitting crucial information: namely, that my wife, Patty, was involved in two bankruptcies, one in 1998 with her former husband; and one in 2007, while she was married to me. McArdle says this is "material information that changes the tenor of the story," and then accuses Patty of "serial bankruptcy."
These bankruptcies did occur, but they had nothing to do with our mortgage woes. They were both tied to old debts from before we were married or bought a house. They had nothing to do with my ability to get a mortgage; nor did they have anything to do with our subsequent financial problems.
Since Patty had been so brave in letting me tell our own story so candidly, I wanted to spare her the public exposure on these older woes. But that is now impossible, so here is the story:
The first bankruptcy in 1998, five years before Patty and I got together. It occurred because Patty's former husband, a producer of TV commercials in Los Angeles, didn't file income tax returns for five years. Patty, who was a stay-at-home mom and wasn't earning money, was blindsided. She had been signing returns, but he hadn't actually been filing them. Because her husband's business income was reported on their personal tax returns, she had to join him in the bankruptcy filing.
All that happened in 1998, and it obviously had nothing to do with the story in Busted. It never even occurred to me to mention it.
Patty's second bankruptcy stemmed from a loan she received from her sister, while Patty was still living in Los Angeles. At the time, she was caring for four children, working for very modest pay, and receiving almost no child support from her ex-husband. (Despite multiple court orders, he remains chronically delinquent on untold thousands of dollars.)
When Patty couldn't repay, her sister followed her east and sued her. I offered to pay off the loan by withdrawing money out of my 401k, but I wasn't allowed to because the purpose didn't qualify as a "hardship." Without an alternative, Patty had no choice but to seek bankruptcy protection.
None of this has any connection to our story. It had nothing to do with Patty being a spendthrift, which she isn't. It had no bearing on my ability to take out a mortgage, and it had nothing to do with our financial problems.
Fortunately or unfortunately, BUSTED is a simple story: we took out a mortgage we couldn't afford, earned less than we hoped and couldn't bridge the gap.
Edmund L. Andrews
See Also:
America's Most Depressing Places
How Bear Markets End
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Gee, she had money she owed to her sister discharged through a bankruptcy court? That is pretty shocking. Most people will pay money they owe to family before paying any other debts.
This story from the beginning made me laugh. The guy was hiding behind his "love" as an excuse for not being responsible?
Glad he found his responsibility whenever he got behind a wheel.
What a d w ee b.
Sorry, i don't buy the excuses either. Patty is completely hopeless when it comes to managing money and Andrews enabled and indulged her. When money is tight everything needs to be cut back to bare bones, sacrifices need to be made and these two did neither. They dug themselves into a hole.
For 10 points and the game: Identify who wore the pants in that family......
For five bonus points: Why did they want to be photographed playing pocket pool?
Clark Hoyt in the Times today sort of whitewashed this guy instead of holding him and Dean Baquet responsible for ethics violations. If the NY Times lets down their standards like this, what does that say about our nation as a whole?
He sort of committed fraud? The Times sort of looked away as he was allowed to continue covering the mortgage/financial meltdown? He sort of left stuff out of his story on purpose? He sort of included part of his comingled assets into the last bankruptcy without revealing them?
We as a public are sort of letting him get away with it?
Because he's a nice guy? And we don't want to see him held accountable for his foolish ethical mistakes?
What are you babling about? what ethical mistakes?
and what "guy??
"When Patty couldn't repay, her sister followed her east and sued her. I offered to pay off the loan by withdrawing money out of my 401k, but I wasn't allowed to because the purpose didn't qualify as a "hardship." Without an alternative, Patty had no choice but to seek bankruptcy protection."
I just don't believe that bankruptcy was the only way. Yes, she'd been sued by her sister but you can't tell me there couldn't have been some kind of payment plan set up between them and the lawyers, rather than a lump sum that may have required 401k money. Negotiate a deal, pay the loan and hmm, *postpone* buying a house until that settlement is taken care of! What a concept!
So instead of attempting to *jointly* pay back the loan, Patty, you go and declare bankruptcy and I'll take out a mortgage that neither of us can afford! Brilliant, dont'cha think??
There are just too many red flags for me to have any sympathy here.
Why should her pre-marriage debt follow him and impact his ability for homeownership?
I am more shocked that a family member would sue for a loan. Evidently sis thought new hubby shoudl pay; he didn't. Nor do I.
If there was another "way"; as you seem to think, the isiter evidently didn't suggest it ; she was the one that sured.
This piece is supposed to be about "love" so why wouldn't he try and help her repay her loan debt? The fact that the sister felt she needed to sue is evident that Patty was making zero attempt to repay the money--now *that* is more shocking, her sister loaned her some money to keep her and her family afloat and she was willing to walk away.
Edmund and Patty could have easily waited to buy a house and taken some time to repay the loan but instead, they both knew Patty's option was going to be bankruptcy and they both knew they were going to be in over their heads with a mortgage they couldn't afford. I use "they" intentionally because as a couple, these decisions couldn't have been made without the other knowing.
You're shocked that a family member would sue for a loan to be repaid? I, nearing retirement, lent a family member thousands of my hard earned dollars because he told me he was in financial trouble. He never made the slightest attempt to repay me, and I then found out he'd given his new girlfriend a $2000 necklace for Christmas. I would have sued, had i not known that the legal fees would have eaten up anything I'd been awarded.
Oh, and like the wife in this article, he declared bankruptcy and i never saw a dime of what I'd lent him.
Jen..you're right!..I thought, at first, a genuine "book"...but this:
"When Patty couldn't repay, her sister followed her east and sued her. I offered to pay off the loan by withdrawing money out of my 401k, but I wasn't allowed to because the purpose didn't qualify as a "hardship." Without an alternative, Patty had no choice but to seek bankruptcy protection"
Ummmm...it's called a LOAN from the 401K..he could have taken a LOAN..at a decent interest rate...from his 401k (I've done it and paid it back TWICE!)...to pay this off instead of wah wah whining about hardship....hell I have CANCER and couldn't get a hardship..so..duh!..I got a LOAN...
I filed bankruptsy twice..1st time..my fault COMPLETELY!!!...tried to maintain my "married" lifestyle...but the second time..was the result of a serious auto accident with an uninsured teenager...and $60,000 in medical bills I could never repay (and the doctors were idiots anyway)...but... recently, after getting hit with HUGE medical bills from my latest crisis (aggressive cancer)..I had to take a LOAN from my 401k..I did the 4 year plan..so payments are low, interest rate very fair...but it help make min. payments to all the doctors treatment my cancer...and NO..I DID NOT qualify for hardship...so there..
sadly..now I have NO respect whatsoever for this guy or his wife...another disappointment..
Hope your health turns out okay.
OOps... Well, it wouldnt be as good if that part was in there.
My husband and I are so glad we blew our money on booze and casinos!
There's a lot of blame to go around for this financial crisis, but it isn't fair to make Mrs Andrews the poster child. When my son & daughter-in-law were looking to 'upgrade' after the birth of their son, you would not believe the things their real estate agent told them they could afford and she even got them pre-qualified for the ungodly amounts. Fortunately they listened to us and didn't get in over their heads - so remember real estate agents and mortgage brokers are just as guilty as someone who may or may not overspend. There were plenty of people that did listen to bad advice from these professionals besides the reporter, but you have to also give just as much blame to the banks that either didn't check or care. After all, they were the ones that actually passed out the bucks. There are far better candidates to jump on. This was just one couple, one house - not patient zero.
This one couple is representative of the national disease whereby people feel entitled to live above their means.
Greed is a two way street. The banks and realtors, etc could not have pulled this off unless people were willing to believe they 'qualified' for more than they could afford.
I still think the banks were the 'professionals' in charge of the money. They should have at least been able to see that these people could not have possibly afforded the amount they were given and expected to repay. Yes there is personal responsibility involved as well- but banks should have used due diligence also. They had the final word and should have said no. Banks were just as greedy as the homeowner . The homeowner was buying a 'dream' after all, and the banks were the ones that had control of the actual money.
I can believe they got qualified for ungodly amounts, so did I did. My husband couldn't figure out how we could do that and eat too.
But that was the financial/mortgage industry business model. Give mortgages to anybody with a pulse; slice it and dice it beyond recognition; get a rating agency to mark it AAA; sell the 'security' to some other fool.
http://www.npr.org/templates/story/story.php?storyId=90327686
The MORTGAGE BROKERs KNEW E-X-A-C-T-L-Y what they were doing, they have been doing it for the last 20 years on average....The companies that paid the mortgage brokers knew EXACTLY what they were doing...And the idea that we are BAILING THESE people out is outrageous..
And don't give me this stuff about "People should have known better"....Most of these people had IQs less than 100 and got suckered...That is why the STATE OF GEORGIA tried to stop this in 2003,,,but you know while the Bushies were getting ready to go to war, they also had the time to stifle the state laws...
I have a brother who was a mortgage broker and another who is a Realtor. The mortgage broker lost his home to foreclosure and left the business. The Relator's wife makes enough to cushion his income drop but it has caused tension.
Remember that both professions are primarily commission only. If you close nothing you get no pay. Nadda. For Realtors that can be for months while expenses and fees continue rolling in. That is a business model that in times of desperation invites fraud or at least an inclination to close every deal you can whether or not it is good for the borrower.
Of couse, people should never be responsible for themselves and their decisions ... that's why we need THE STATE OF GEORGIA ,or whichever, to take car of us.
Someone should scrutinize ALL the New York Times, Los Angeles Tims and the hundreds of other newspaper and magazine foreclosure sob stories of the past year.
They don't tell you the whole story. They don't tell you about the repeated refi's, the profligate spending with the equity taken out, the lack of income to justify the mortgages taken in the first place, on and on.
Yes, there ARE some genuine hard case stories out there But these are not the people who the media usually spotlights.
It's like the media is aplauding Americans unsustainable spendthrift ways and the governments efforts to keep the unsustainable afloat ... andby trying desperately to find a scapegoat other than the people themselves.
Greed is a two way street. The banks would not have been able to sell all these 'financial products' if Americans were not utterly convinced that they are entitled to live beyond their means.
Darlin, , Don't you remember that the FIRST thing Bush said after 9/11 was GO SPEND... Then it was The Ownership Society... etc.....The only reason this pathetic economy did not go into the TRASH Heap sooner was because people were spending themselves into DEBT....Get REAL...
People should spend themselves silly into debt ... especially if someone else is telling them to do it.
That just about sums up the general American mentality.
you are so right, I think the term( keeping up with the jones's) meant running a foot race before Bush got in office. I think nobody had ever been in debt before bush either. It's all Bushes fault.
TOTALY AGREE, and so many used the equity to purchase fuel sucking SUV's to trapse the roadway (and even gogt TAX INCENTIVE BREAKS for doing so...$50,000 and up was TYPICAL for wheels) all with $$$ sucked out of the (false) equity of the "roof" that too underwent "raising" with remodeling to which often done abandon not of neccessity but hey, WE HAVE THE RIGHT TO INDULGE and pipers are for a tomorrow somehwere in the future, blah, blah, blah, in the meantime, many took exotic vactions --the INDULGENCES had NO boundaries for far too many whether they COULD actually afford such or not...tomorrow was always a day away and by then bloated, eagerrated EQUITY VALUE surely would offer cover for the shortfallings in the personal coffers.....GREED BEGAT GREED, with the end result , far more truly homeless and struggling to get another leg up and RE INFLATE to yesterdays inflated over evaluations !!!
I would love to ask how you come by your "opinion"/
Sit around and think it up? Watch the news? Look at your neighbors?
I am front and center on this issue. I work, pro bono, everyday with people about the be destroyed by lenders. I know the factual circumstances.
Not one of my clients has a hot tub or new car or vacations by plane; yet they are all in trouble. Not one has a mortagage over 1000 a month, yet they are in trouble
living "above their means" means surviving; and there are far more TRUE stories like my clients than the upper middle class 'million dollar house" overbuy
Call me naive, but I expect more out of the NYTimes and a publisher like Norton.
Does nobody have journalistic etchics anymore?
The press need to be accountable to the people.
What is our responsibility as citizens to let them get away with this?
The guy had a predetory lander and a predatory wife. Quite the toxic mixture.
He needed a certain amount of clairvoyance, common sense, sens of self-preservation, self-repect and a cool head, to withstand that.
as i wrote when this story first appeared on huff., i wonder if patti is still hangin' around now that the money faucet has been turned off. 6 months she'll be onto someone new.
Leaving out major parts of a story is what an author DOES! No story that's condensed to fit between two covers is ever the whole story. And most of what's left out would often make a more exciting read than what was kept in.
I'm reminded of that classic autobiography "West with the Night" by pioneer aviator Beryl Markham. An inspiring tale, though she somehow managed to leave out the bit about her catching syphillis from that Kenyan big game hunter she described in her book. It would've been a very different book indeed if she had chosen to leave that detail in. But she was telling a narrative and chose to put in only what advanced the narrative.
Yes but he shouldn't whine like a stuck pig when he's called out on it. Like you mentioned, one of the key motivations Patty whined about mentioning the finances is different once the new information is mentioned. The book shouldn't be sold as a true story, but simply based on one.
Interesting analogy to "West with the Night." Only one problem: it was Danish author Isak Dinesen, not Beryl Markham, who contracted sypillis while in Africa from her husband Bror Blixen. It would have been a VERY "different book indeed" if Markham had also had syphillis!
http://www.youtube.com/watch?v=Ubsd-tWYmZw
Andrew and Patti in 30 seconds or less.
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