Wednesday, May 30, 2012
Book Review: American Nightmare by Richard Lord
Before it was cool, Richard Lord's American Nightmare: Predatory Lending And The Foreclosure of the American Dream looked at the scourge of predatory home mortgages and lending programs aimed at fleecing the declining American lower middle class.
This is a slice of life book that examines the experiences of ordinary people in Lord's hometown of Pittsburgh in the 1990s. Each person needed a little money to live in retirement, start a business or pay medical expenses.
They ended with loans with impossible to pay off balances, opaque contracts that turned into something else, banks that turned a deaf ear, and ultimately lost their houses and went bankrupt.
There are two lessons here:
1) don't assume the financial system is safe or ethical. The country has recently stripped away of decades-worth of regulations designed to protect people. You can and will be taken to the cleaners and it's all legal.
2) learn when to say no to money and loans. A lot of the people in this book really, really wanted a house or home improvements and let that cloud their judgement.