Everyone knows that millions of people lost their homes when the housing bubble burst. Belief in the continued increase in housing prices spurred millions to grab the American dream of homeownership, enticed by wildly lenient mortgages that encouraged them to purchase homes beyond their means. Banks bundled these risky mortgages together and sold them on Wall Street. Everything was great—until it wasn’t.
When the housing market slowed down, things spiraled out of control, bringing the stock market to its greatest decline since 1929. Some of the most prestigious banking houses went out of business, while others teetered on the edge of collapse, saved only by billions of tax dollars.
What many people don’t know, though, is how much money was made as the result of the housing crisis. In Homewreckers, Pulitzer Prize finalist Aaron Glantz untangles how a group of Wall Street bankers and hedge fund partners (including future Treasury Secretary Steve Mnuchin and Commerce Secretary Wilbur Ross) transformed a national crisis into a financial bonanza for themselves. Even more important, however, Glantz demonstrates how their gain came at our country’s cost through decreased homeownership, diminished wealth for low- and middle-income Americans and the destruction of whole communities.
Glantz does an excellent job explaining the financial complexities of the housing crisis and its fallout. But the real strength of his book comes from the personal stories he weaves in to illustrate his points. The stories of Sandra Jolley, Beulah Butler and Shawn Pruett bring home the real pain experienced by American families as a result of the homewreckers’ actions. Yet, the most surprising stories are those of the homewreckers themselves. These men are not sadists. Instead, their actions stem from an insatiable need to acquire more: more money, more homes, more wives. Glantz makes it clear that they are not monsters but mere humans who have done monstrous things—and, if left unchecked, are likely to do them again.
