Sunday, January 27, 2008
By now, everyone has heard of "the subprime mortgage meltdown." It began in the U.S. but its effects are worldwide. Banks lent hundreds of billions of dollars to homebuyers who can't pay them back. Wall Street took the risky debt, dressed it up as fancy securities, and sold it around the world as safe investments. Steve Kroft focuses on one hard hit city: Stockton, California.
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A House Of Cards
Ground ZeroThe foreclosure capital of America
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Walking AwayThe cold logic behind this couple's drastic decision
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Warning Lights$1,400,000,000 of bad loans in just one town!
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The Repo BusOne family's disaster is another's buying opportunity
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Who is to blame for the subprime meltdown?
DID YOU KNOW?
- Banks and securities firms worldwide have written off about $133 billion in losses stemming from the subprime crisis, according to Bloomberg News.
- In 2007, for the first time in nearly four decades, the median price of a U.S. home dropped, according to the National Association of Realtors.
Anatomy Of A Disaster
An Invitation To Fraud? » Watch Clip View Video
How A Bubble Began » Watch Clip View Video
A Small Price To Pay? » Watch Clip View Video
A Blind Eye? » Watch Clip View VideoComments
Sound off on this segment. Here you'll see the comments in the order they were posted.
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Actually its a good thing the Real Estate market to collapse. It was and is still overinflated. Why does a "house" have to cost over $100000. Houses need to be for living— and business for making money! T. Schlesinger
Posted by tmsly2 on Sun, Jan 27, 2008 9:51 PM ET
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I am trying to watch the real estate stories posted by 60 minutes and the audio keeps dropping out. It's very frustrating to only get partial information
Posted by efiedelholtz on Sun, Jan 27, 2008 11:39 PM ET
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60 minutes did not bring out that state laws about lenders and real estate caused part othe problem.
Posted by sarah90907 on Sun, Jan 27, 2008 11:56 PM ET
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I am a local Stockton area Realtor and this meltdown began with greed on the part of lenders and spred to Wall street and then to the borrower and real estate agents. I can remember buyers coming to a property and within one day of posting the home for sale I would have as many at 15 offers, often rasing the price of the home $50,000. It will take us ten years to pull out of this greed sink hole.
Posted by johmrh on Sun, Jan 27, 2008 11:59 PM ET
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"Actually its a good thing the Real Estate market to collapse. It was and is still overinflated. Why does a "house" have to cost over $100000.": Do you really think a house should cost less to buy than it does to contstuct? What kind of fantasy land are you living in?
Posted by geostru on Mon, Jan 28, 2008 12:57 AM ET
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What ever happened to the days when a mortgage company would look at one's ability to pay a mortgage as a prerequisite to granting a loan? Now, it appears they're indemnified from the responsibility of poor judgement and they simply "write off a bad debt" rather than own up to a mistake. The same goes for the people who borrow the money. To hear someone say "I'm not going to make the payment even though I'm financially able because my property went down instead of up" without any feeling of remorse is dispicable.
Posted by barryws on Mon, Jan 28, 2008 1:04 AM ET
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This is what economocs majors call a bubble. However, they still can't recognize one, just talk.(With the exception of Warren Buffett). For this reason economics majors who are in the business of advising the Wall St sharks (the due diligence companies, bond unsurance companies,etc,) are just as culpable as the Wall St sharks and should be punished equally.
Posted by fox9552@sbcglobal.net on Mon, Jan 28, 2008 1:20 AM ET
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This was all done in plain sight. Our government elected officials must have known what was going on. I hope some at the top go to prison for being blind to this mess.
Posted by antronig on Mon, Jan 28, 2008 1:24 AM ET
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TALK IS CHEAP? TRY LIVE IN HAWAII, FEE SIMPLE HOMES RUNS ABOUT 400,000.00 AND UP NOW, AND STILL GAS PRICES GOING UP AND UP, AND COST OF LIVING IS AT A HIGH TOO.AND MINIMUM WAGE YOU CAN'T AFFORD A HOUSE WITH THAT PAY RATE TOO.SO ENJOY THE RIDE CAUSE THATS ALL WE CAN DO WHEN WE ARE IN DEPT TO THE WORLD. SIGN SOMEONE WHO'S STILL TRYING TO LIVE IN (HI)
Posted by dabiggsexy on Mon, Jan 28, 2008 1:36 AM ET
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What I don't want to see is us the tax payer bail this mess out...GREED on everybodys part is the problem .. Since when do you qualify for a loan that YOU know in your pocket book you can't pay.. What ever happened to this...Your house payment is never more than one weeks take home pay????? Your credit card debt and all other payments are reasonable???? You earn it you know what it takes to live so DA!!! Why take on more than you can handle???? SAVINGS!!!! You put money away for an emergency... These arn't stupid people they are instant gradification seekers.....
Posted by sandradiane2002 on Mon, Jan 28, 2008 2:12 AM ET
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