The New Normal: Mortgage Meltdown

June 15, 2009 -- A few years ago getting a mortgage on a dream home suddenly became a reality for a growing number of people. Television commercials boasted that if you had "less than perfect credit," a bankruptcy or even a previous foreclosure, you could still qualify for a mortgage.

One of the skeptics was New York Times economics reporter Ed Andrews. Andrews wrote a piece in 2004 warning about dangerous home mortgages, calling them "the ever more graspable and risky American dream."

Then, Andrews promptly did the increasingly common thing at the time. He wrote his name on a half-million-dollar mortgage for a Silver Spring, Md., home he couldn't afford.

Watch the full story Friday on "20/20" at 10 p.m. ET.

Andrews now says that he, of all people, should have known better.

"I really did know a lot more than ... most people about, specifically, these kinds of mortgages," he told "20/20" in a recent interview. "I thought about it ... and yet ... I plunged ahead."

Andrews reveals all the gory details in his new book, "Busted: Life Inside the Great Mortgage Meltdown." He said that he and his wife, Patricia Barreiro, took the plunge because they were blinded by their desire to start a new life together after going through difficult divorces. They hoped to provide some stability and a new home for their children from their prior marriages.

"I think that, like Ed, I was a little delusional and I think we weren't thinking very clearly," Barreiro said.

And why should they? Especially since banks had stopped asking borrowers what was once the most important question: Can you afford to pay us back?

"They actually didn't care one way or the other," Andrews said, detailing the math behind how unrealistic it was for the bank to lend them $500,000.

"We were going into this with me paying all of my take-home pay to the mortgage ... and the gamble was, basically, that Patty was going to be able to cover our living expenses with the money that she earned," he said.

It was "magical thinking," he said, especially because Barreiro was not even working when they bought the house and then struggled to find a good-paying job. She eventually found a job but then lost it.

Andrews soon learned that the couple's finances had stretched to the breaking point. He recalled the day when, a few months after buying his home, he went to the ATM to find he only had $196 in the bank.

"Suddenly, here we were, just a couple months later, and boom, I'm down to nothing in that bank account," he said.