Behind the Housing Crash: Confessions from an Insider

by Aaron Clarey

“Behind the Housing Crash – Confessions from an Insider” is the authoritative book on the housing crisis. It is an expose written by Aaron Clarey, a credit analyst who worked at various banks in the Twin Cities and saw first hand the unethical, if not, illegal dealings that led up to the housing bubble and subsequent crash. Stories of commission-addicted bankers, bribed appraisers, FBI investigations, IRS raids, offshore bank accounts and more regale the reader with a blood-boiling story of corruption, incompetence and limitless greed. However, the book goes beyond exposing those responsible for the housing crash, and does an exemplary job of explaining, in clear and simple language, the economics behind the housing crisis and the consequences for us all. If you are looking for an excellent expose on the banking industry, an explanation why your house is worth $100,000 less than it was before, or are just curious as to what happened, look no further. This is the book to read.

Genres: Economics, Nonfiction

324 pages, Paperback

First published September 3, 2008

About the author

Aaron Clarey is an American blogger, author, and financial consultant.

A self-described "asshole", he is known for his critical view of the U.S. system of higher education, as well as his disdain for feminism.

Reviews

[Ietrio · Rating 1 out of 5]

An average frustrated chump talking about what he has seen on TV. But wait! There is more! Has he talked about his ex girlfriend? She is "drop dead gorgeous", because this child needs to brag. And because she is a woman she is dumb. And, what else? she "gets by" on her looks. And she is relevant for 50 states, and probably Europe too. Isn't this guy amazing?

[MARIO · Rating 4 out of 5]

Good return of experience for Real Estate Actors.

[MikeDrawback · Rating 4 out of 5]

The aftermath of the current housing crash is a complicated mess, but this book is a great place to start if you’re looking for a perspective from inside the housing market where it all began. With chapter names like “My Ex-Girlfriend Was Subprime,” this book is entertaining. This isn’t some exhausting academic empirical study. Its not too bloated with numbers and technical finance jargon, and where there is technical stuff its explained very well. Instead, it takes you through real life anecdotes from an economist who worked in the real estate finance industry while the bubble was blowing up. Its full of first-hand accounts of incompetence, greed, and outright corruption in the world of real estate finance, with just the right amount of graphical charts and data to go along.

Clarey goes after bankers, brokers, developers, and borrowers, but he spends the most time on bank management. Despite his objections and warnings, management had him write up a multitude of bad loans to satisfy their appetite for sales commissions. In the end, he drops a sweet bit of schadenfreude as he watches it all come crashing down. Finally, he offers some preventative solutions, the most convincing of which is elegantly simple: tie bankers commissions to loan profits instead of loan sales.

Clarey isn’t the most professional author with lots of books under his belt, but he was compelled to expose the banking industry. You’ve got to give him credit for sitting down and independently publishing a book about it. I felt like the author overused the sentence structure “Not only X, but also Y” a little too much. Other than this little peeve, I found the prose to be clear and easy to read, accessible even for people with little economics or finance background.

Like most books, the one thing this one was really missing was more illustrations. Yeah, the charts are pretty, and I know how much Mr. Clarey loves charts. But I took it upon myself to do my own artist's rendition of the author's legendary "Credit Union Face:"

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