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.

The Housing Meltdown

For years, I couldn't figure out how everybody was paying for their houses. I just thought I didn't get it. Last time I mistrust my intuition. So now my intuition tells me that we'll have a train in the Austin metro area, get reality shows off the air, and I'll finally become an English rock star.

Here are the official government numbers about housing starts.

You've heard of the famous Case-Schiller index about housing prices? It's a standard measure of house value.

And that's not all!

There are a number of great, interactive maps that show the differing magnitude of declining house sales and deflating house values.

The New York Fed has a map that shows how your zip code is faring with foreclosures.

Do you know Zillow? Zillow is a website that shows you what homeowners are asking - and getting - for their homes.

A company called Realty Trac has an interactive map of foreclosures.