Edmund L. Andrews

Last updated

Edmund L. Andrews is a former economics reporter for The New York Times who served as a technology reporter in Washington, European economics correspondent and Washington economics correspondent.

Andrews is best known as the author in 2009 of Busted: Life Inside the Great Mortgage Meltdown, an account of his own experience with subprime mortgages during the housing bubble. An extended excerpt from the book appeared in The New York Times Magazine as "My Personal Credit Crisis." [1]

In the book, Andrews described his own mortgage crisis as a case study of recklessness during the housing bubble by home buyers like himself as well as by lenders and Wall Street. "Nobody duped or hypnotized me," he wrote. "Like so many others — borrowers, lenders and the Wall Street dealmakers behind them — I just thought I could beat the odds." In addition to recounting his own fateful decisions, Andrews examined the downfall of two of his major lenders, and the actions of the Wall Street firms that supported them.

The book attracted widespread public attention, as well as controversy. Andrews appeared on CNBC, NPR's All Things Considered , the NewsHour on PBS, The Colbert Report , and other venues to promote his book. Michelle Singletary, personal finance columnist for The Washington Post, wrote that "The president and every member of Congress should read this book." [2]

Andrews was criticized by Megan McArdle, a blogger from The Atlantic , for not mentioning his wife's bankruptcies in the book, [3] and by Andrew Leonard from the Salon magazine for not disclosing his book advance. [4] He responded to the criticism on the PBS website. [5] Later, The New York Times public editor Clark Hoyt acknowledged the controversy but expressed more concern that Times editors were still asking Andrews to cover the financial crisis. Although Andrews "is an excellent reporter who explains complex issues clearly", Hoyt wrote, he is "too close to [the financial crisis] story" and should not cover it." [6] Bradford DeLong, professor of economics at UC Berkeley, analyzed Hoyt's comments and concluded "he should have revealed the second bankruptcy, if only to head off the criticism, but because it shapes how we assess the damage done by the too-easy availability of credit". [7]

Before writing Busted, Andrews wrote prolifically on both economic and non-economic topics. From 1990 to 1996, he covered technology policy, including the evolution of digital television, mobile communications and the overhaul of telecommunications law. From 1996 to 2002, he was the Times' European economics correspondent. After the U.S. invasion of Iraq in 2003, he covered the first several months of U.S. occupation. In 2007, he won an award for project reporting from the Society of American Business Editors and Writers for stories revealing that the Interior Department was failing to collect billions of dollars in oil and gas royalties. In 2009, he and a team of Times reporters were finalists for a Gerald R. Loeb award for breaking-news coverage of the financial crisis.

In December 2009, Andrews took a buyout from The New York Times. [8] He blogged for Capital Gains and Games [9] and became senior Washington writer for a digital economic news start-up, the Fiscal Times . [10]

Andrews worked as an economics editor and deputy magazine editor at the National Journal in 2010 through late 2011. Andrews is currently an independent writer and consultant in Washington and California.

Related Research Articles

<span class="mw-page-title-main">High-yield debt</span> Financial product

In finance, a high-yield bond is a bond that is rated below investment grade by credit rating agencies. These bonds have a higher risk of default or other adverse credit events, but offer higher yields than investment-grade bonds in order to compensate for the increased risk.

<span class="mw-page-title-main">Alan Greenspan</span> 13th chair of the US Federal Reserve (born 1926)

Alan Greenspan is an American economist who served as the 13th chairman of the Federal Reserve from 1987 to 2006. He works as a private adviser and provides consulting for firms through his company, Greenspan Associates LLC.

<span class="mw-page-title-main">2000s United States housing bubble</span> Economic bubble

The 2000s United States housing bubble was a real-estate bubble affecting over half of the U.S. states. It was the impetus for the subprime mortgage crisis. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and reached new lows in 2011. On December 30, 2008, the Case–Shiller home price index reported its largest price drop in its history. The credit crisis resulting from the bursting of the housing bubble is an important cause of the Great Recession in the United States.

Ditech Financial LLC was a provider of home loan, loan servicing and refinance products to consumers and institutional partners in the U.S.

No income, no asset (NINA) is a term used in the United States mortgage industry to describe one of many documentation types which lenders may allow when underwriting a mortgage. A loan issued under such circumstances may be referred to as a NINA loan or NINJA loan.

GMAC ResCap, Inc. was a residential mortgage loan originator and servicer based in Minneapolis, United States. As a result of its exposure to subprime lending during the subprime mortgage crisis, the company filed for bankruptcy protection in 2012 and underwent liquidation in December 2013.

In finance, subprime lending is the provision of loans to people in the United States who may have difficulty maintaining the repayment schedule. Historically, subprime borrowers were defined as having FICO scores below 600, although this threshold has varied over time.

Dinallo, Eric. "We modernised ourselves into this ice age". Financial Times. Retrieved October 5, 2017.

<span class="mw-page-title-main">American Freedom Mortgage</span>

American Freedom Mortgage, Inc. (AFM) was a private S Corporation incorporated on February 2, 2001, according to the Georgia Secretary of State, and headquartered in Marietta, Georgia. AFM conducted business as a multi-state direct-to-consumer correspondent lender and mortgage broker specializing in the origination of subprime and Alt-A mortgage loans. AFM also operated a wholesale mortgage lending division that originated loans via approved mortgage brokers and which used the fictitious name AFMI Funding. As a correspondent lender, AFM sold the mortgage loans on the open market to larger investors.

United States housing prices experienced a major market correction after the housing bubble that peaked in early 2006. Prices of real estate then adjusted downwards in late 2006, causing a loss of market liquidity and subprime defaults.

The subprime mortgage crisis impact timeline lists dates relevant to the creation of a United States housing bubble and the 2005 housing bubble burst and the subprime mortgage crisis which developed during 2007 and 2008. It includes United States enactment of government laws and regulations, as well as public and private actions which affected the housing industry and related banking and investment activity. It also notes details of important incidents in the United States, such as bankruptcies and takeovers, and information and statistics about relevant trends. For more information on reverberations of this crisis throughout the global financial system see Financial crisis of 2007–2008.

Binyamin Appelbaum is the lead writer on business and economics for the Editorial Board of The New York Times. He joined the board in March 2019. He was previously a Washington correspondent for the Times, covering the Federal Reserve and other aspects of economic policy. Appelbaum has previously worked for The Florida Times-Union, The Charlotte Observer, The Boston Globe and The Washington Post. He graduated in 2001 from the University of Pennsylvania with a B.A. in history. He was executive editor of the student newspaper, The Daily Pennsylvanian.

This article provides background information regarding the subprime mortgage crisis. It discusses subprime lending, foreclosures, risk types, and mechanisms through which various entities involved were affected by the crisis.

<span class="mw-page-title-main">Bankruptcy of Lehman Brothers</span> 2008 bankruptcy of American investment bank

The bankruptcy of Lehman Brothers on September 15, 2008 was the climax of the subprime mortgage crisis. After the financial services firm was notified of a pending credit downgrade due to its heavy position in subprime mortgages, the Federal Reserve summoned several banks to negotiate financing for its reorganization. These discussions failed, and Lehman filed a Chapter 11 petition that remains the largest bankruptcy filing in U.S. history, involving more than US$600 billion in assets.

A toxic asset is a financial asset that has fallen in value significantly and for which there is no longer a functioning market. Such assets cannot be sold at a price satisfactory to the holder. Because assets are offset against liabilities and frequently leveraged, this decline in price may be quite dangerous to the holder. The term became common during the financial crisis of 2007–2008, in which they played a major role.

The U.S. subprime mortgage crisis was a set of events and conditions that led to a financial crisis and subsequent recession that began in 2007. It was characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages. Several major financial institutions collapsed in September 2008, with significant disruption in the flow of credit to businesses and consumers and the onset of a severe global recession.

Michael Hudson is a Pulitzer-Prize winning American investigative journalist. He is currently on his second stint as a senior editor with the International Consortium of Investigative Journalists (ICIJ).

<span class="mw-page-title-main">Causes of the Great Recession</span>

Many factors directly and indirectly serve as the causes of the Great Recession that started in 2008 with the US subprime mortgage crisis. The major causes of the initial subprime mortgage crisis and the following recession include lax lending standards contributing to the real-estate bubbles that have since burst; U.S. government housing policies; and limited regulation of non-depository financial institutions. Once the recession began, various responses were attempted with different degrees of success. These included fiscal policies of governments; monetary policies of central banks; measures designed to help indebted consumers refinance their mortgage debt; and inconsistent approaches used by nations to bail out troubled banking industries and private bondholders, assuming private debt burdens or socializing losses.

<span class="mw-page-title-main">2007–2008 financial crisis</span> Worldwide economic crisis

The 2007–2008 financial crisis, or Global Financial Crisis (GFC), was a severe worldwide economic crisis that occurred in the early 21st century. It was the most serious financial crisis since the Great Depression (1929). Predatory lending targeting low-income homebuyers, excessive risk-taking by global financial institutions, and the bursting of the United States housing bubble culminated in a "perfect storm." Mortgage-backed securities (MBS) tied to American real estate, as well as a vast web of derivatives linked to those MBS, collapsed in value. Financial institutions worldwide suffered severe damage, reaching a climax with the bankruptcy of Lehman Brothers on September 15, 2008, and a subsequent international banking crisis.

References

  1. Andrews, Edmund L. (2009-05-17) My Personal Credit Crisis. New York Times
  2. Michelle Singletary – Insight From Inside the Mortgage Crisis. Washingtonpost.com (2009-06-07). Retrieved on 2012-05-27.
  3. The Road to Bankruptcy, by Megan McArdle, The Atlantic .
  4. The subprime New York Times reporter, by Andrew Leonard from the Salon magazine .
  5. Ed Andrews Responds to Criticism in the Blogosphere, from PBS NewsHour website.
  6. Clark Hoyt, "The Writers Make News. Unfortunately." The New York Times , May 23, 2009.
  7. New York Times Crashed-and-Burned-and-Smoking Watch (Ombudsman Clark Hoyt Edition). Delong.typepad.com (2009-05-24). Retrieved on 2011-08-31.
  8. Why Edmund Andrews, Times Reporter Who Chronicled Financial Woes, Took the Buyout | The New York Observer. Observer.com. Retrieved on 2011-08-31.
  9. Andrews, Edmund L. (2010-01-04) Hopes of a Chastened Capitalist. Capital Gains and Games. Retrieved on 2011-08-31.
  10. Calderone, Michael. (2010-01-05) Ex-NYTer Andrews joins Fiscal Times. Politico.Com. Retrieved on 2011-08-31.