VIDEO: 60 Minutes, House of Cards

VIDEO: 60 Minutes, House of Cards

60-min (1)

This story was originally broadcast on Jan. 27, 2008. It was updated on May 23, 2008.

Since last summer, Americans have seen their investments shrink and their property values plummet. At the heart of the problem is something called the subprime mortgage crisis, which began back then and continues to ricochet through the economy.

It sounds complicated, but it's really fairly simple: 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. If it sounds like a shell game or Ponzi scheme, in some ways it was a house of cards rife with corruption, greed, and negligence.

And as correspondent Steve Kroft first reported in January, it started in places like Stockton, Calif.

Real estate agent Kevin Moran gave Kroft a tour of the wreckage in one subdivision called "Weston Ranch," with block after block of vacant and abandoned houses.

"If you see a 'for sale' sign in this neighborhood that probably is a sign of distress, right?" Kroft asks.

The "for sale" signs and the overgrown lawns in Weston Ranch only show part of the picture. To get a real overview, you need to look at a map from Sean O'Toole's Web site,, which tracks distressed properties in Stockton and other California communities.

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