Foreclosure Blight
In Manteca, Calif., police have a new job: patrolling hundreds of foreclosed houses left empty and abandoned. They are half million dollar houses, often bought with nothing down, turned into suburban blight.
To get a firsthand look, CBS News correspondent John Blackstone rode along on patrol with Manteca Police officer Rex Osborn, who explained, "you make one right-hand turn and immediately this is what we see - dead grass, bushes are dying, trees are dying. The next thing you know you have squatters in the house, and those who squat in the house are not the best of citizens.
That's why Craig Smith called the police.
"Yeah, the house right behind me. They were, this week, living there," Smith said. "They just got 'em out."
As California house prices soared, cities in San Joaquin County attracted buyers priced out of the San Francisco region. Developers built more than 30,000 new homes in the last six years. But with the spike in adjustable mortgage rates the flood of buyers turned into a flood of defaults - 10,000 in the county in the past 18 months.
Has the bottom fallen out?
"We haven't seen the bottom yet, in my opinion," said financial planner Patrick McGilvray. "We're due to see more adjustable-rate mortgages resetting in February and March of 2008 than in all of 2007 combined.
Not long ago an overgrown area with a murky pool that Blackstone toured was someone's backyard paradise, but now foreclosure has taken it all away. There and at hundreds of other properties across the county, even the swimming pool has become a hazard - a source of mosquitoes and West Nile Virus.
County workers who used to patrol swamps and streams now do their work in neglected back yards. But for neighbors the problem that really bites is fast falling house prices.
Homeowner Corky Hine retired and hoped to move to Texas, but his real estate agent is struggling to get people even to look at his house.
"I already dropped it $60,000 from the original appraisal price," Hine said.
"She said there's like 500 homes for sale within a two-mile radius of mine, and 150 of them are in foreclosure within a mile," Hine explained.
In one subdivision, in a single block there are three houses with the tell-tale brown lawn.
The sad story of this one is in the papers taped to the door. One reads: "$7,400 dollars behind in payments." The house will be sold at auction.
At the county courthouse the auctioneer has more foreclosures to sell every day. But it's a lonely job.
"There's nobody here!" Blackstone said.
The auctioneer, Ted Longley, chuckled: "Must not be any money involved in the equity area. I don't know."
"You can't give these houses away," Osborn said.
When nobody buys, the houses go back to the lender and police are finding those lenders are not good neighbors. As they let houses fall into disrepair, the pain of foreclosure spreads to the whole neighborhood.
