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his parents, who encouraged the house hunt. Lisa felt outnumbered and exhausted, so she just went along.
    They made a plan to buy the house and then sell the condo. Lisa was eight years into a fifteen-year mortgage, and thanks to sometimes paying extra principal, she only owed about $25,000. Meanwhile, the value of the condo had shot up. They figured they could get at least $250,000 for it and put the proceeds toward the new house, with a small mortgage left over. It wasn’t a reckless idea; growing families stepping up into bigger homes had used the same strategy for decades. And the bubble-era price spike would theoretically work in their favor on the condo.
    To lock in the house, however, they had to close the deal first. So on February 23, 2007, Lisa and Alan sat down at DHI Mortgage, D.R. Horton’s financing subsidiary, to sign the closing papers. They put $17,000 down for the house on Gazetta Way, 5 percent of the purchase price, and took out a mortgage for the remaining $313,000. Because Alan’s phone reseller business had unpredictable revenue, the couple decided to use Lisa’s superior credit score—803 at the time—and put the loan in her name. And Lisa, eight months pregnant, told the loan officer, much to his surprise, that she would read every page of the mortgage before signing it.
    The problem was that she had to pee. A lot.
    The closing agent, representatives from the builder, and Alan had to wait while Lisa perused the mortgage, line by line, in between trips to the bathroom. She could get through about five pages at a time before excusing herself.
    Lisa’s only experience with mortgages was the private one with her neighbors. That was a simple fifteen-year fixed-rate deal; this was muchmore complicated. Despite her perfect credit, DHI Mortgage put Lisa into a loan reserved for subprime rather than prime borrowers. To keep initial payments low, it was interest-only for the first ten years. After that, not only would principal payments get added and the mortgage reamortized over the final twenty years, but the interest rate would adjust upward. The monthly payment would end up hundreds if not thousands of dollars higher. Financially speaking, it was a time bomb set to explode in ten years, by which time DHI Mortgage would have made plenty of money.
    The interest-only terms meant the couple would build no equity for a decade, beyond the 5 percent down payment. Once closing costs were factored in, a small decline in home value, maybe 3 percent, would put them underwater. That would create a precarious situation if they experienced any financial disruption.As prominent financial analyst Josh Rosner said back in 2001 when these types of mortgage products started coming out, “A home without equity is just a rental with debt.” But Lisa wasn’t aware of these downsides. Reading through the mortgage was more of a formality, a way to appear responsible. She didn’t have the background to decipher it all, and in the back of her mind she gave herself an out: Lisa was planning to sell the apartment and use the money to pay down the mortgage significantly. So whatever those pieces of paper said wouldn’t apply. When she reached the last page of the mortgage, she signed it.
    Only later would Lisa and Alan realize their mistake. They could not sell the co-op, whose value would eventually drop by more than 60 percent. Every week Lisa would call the listing agent, and every week she’d hear the same thing: no bidders. Lisa slid the mortgage payment under her neighbors’ door at the Royal Saxon once a month, then came back to write a check for the house. The couple had enough savings to handle two mortgage payments for a little while, but not forever.
    In March Jenna was born, and Lisa considered all the hardship of bringing her into the world worth it. But when she was eighteen months old a new pediatrician found a birth defect on Jenna’s lower spine, something her