The foreclosure crisis isn't over; Just ask L.A.
The news landed with a thud on front doorsteps all over America: Home values are falling again, in a dreaded "double dip." If you want to know why, look no further than the house down the street -- the one in foreclosure.
Foreclosed homes, selling at bargain-basement prices, are dragging the market down, and homeowners are still desperately trying to stay out of foreclosure, as CBS News correspondent Bill Whitaker reports from Los Angeles.
It's a sign of the times. People lined up, some overnight, thousands filling L.A.'s massive Shrine Auditorium, desperate to hold onto their houses.
They're hoping to convince banks to modify mortgages they can no longer afford. The nonprofit Neighborhood Assistance Corporation of America has been bringing lenders and borrowers together like this all over the country.
"I feel hopeless," said homeowner Donnie Hines. "I don't know what to do at this point. I feel like walking away."
Julyeta Manukyan never thought she'd need help like this. Her Burbank flower shop is barely surviving. She's filed for bankruptcy. She and daughter Sofia have cut back on everything, yet barely manage to scrape together the $3,400-a-month mortgage for the house they've called home for six years.
But when the variable rate jumps next year, "Most likely we're not gonna keep the house anymore," she said. "We just have to move on, because there's no way we can handle what we're doing now."
"It's real people, real families, real communities being impacted," said Bruce Marks of the Neighborhood Assistance Corporation of America.
The group has helped 175,000 homeowners modify their loans since the start of the recession. It's a drop in the bucket, Marks admits, considering the 873,000 people now in foreclosure. And with 1.1 million others behind in their payments and facing foreclosure, Marks says the current crisis is about to get much worse.
"We have further down to go. prices are going to continue to drop," Marks said.
And the loan modification program the Obama Administration put in place to stem the crisis? It was supposed to save 3 to 4 million homeowners from foreclosure, but so far has helped only 670,000.
"Absolute failure," Marks said. "You have to stop begging and pleading with these banks. You have to require them to do it."
With the huge federal deficit, it's unlikely the government will be offering more assistance. So homeowners facing foreclosure will have nowhere to turn, but to programs like this one, expected to attract 25,000 people in the next few days.
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