Book review: House Poor: Pumped Up Prices, Rising Rates, and Mortgages on Steroids: How to Survive the Coming Housing Crisis

It's too early in the housing mess for there to be a full length book on what went wrong. But The Wall Street Journal's June Fletcher pinpointed many of the factors that would lead to the current mess in her 2005 book House Poor: Pumped Up Prices, Rising Rates, and Mortgages on Steroids: How to Survive the Coming Housing Crisis.

Ms. Fletcher discusses with prescience some of the disturbing trends that led to the current mess: lax lending practices, interest-only/pay-option/reverse amortization adjustable rate mortgages, home ownership costing far more than renting even with a big down payment, and speculative "investors" playing an increasing role in the nationwide run-up in housing prices.

As a description of an era, this is a great book. It falls short as an advice book however, because it was written as a word of caution during an irrational time. For instance, Ms. Fletcher advises readers to only invest in rental properties at prices where they'd be OK if the property is vacant 6 months per year. That's not realistic, and her advice that people should cancel credit cards is dangerous because it can lead to FICO score problems.

Still, it's worth reading because it essentially outlines all of the problems that led to disaster, and provides a great answer to the question "How did we get into this mess?"