The Mortgage Crisis




affect property sheriff (2)
evict legal (2) procedure
illegal right (5) foreclosure
kick wave (4) unfortunately
agent kick out turn over (2)
section mitigate real estate
so far opposite round the clock
rare investor at the most
norm systemic paperwork
affect order (3) court order
scene basically spin out of control
repeat block(3) spin/spun/spun
lock get to me basket case
neutral reinvest back of my mind
crisis collapse subsequent
initiate root (2) lose/lost/lost (2)
risk mortgage take sides
worth disaster dream (2)
price portray rise/rose/risen
bail (2) auction epicenter (2)
surplus bargain drop out (2)
vacant stagnant capital (2)
brisk issue (3) vulture (2)
create inability take responsibility
outlet payment opportunity
growth personal borrow (2)
trace for now remain (2)
crisis situation current (3)
profit income at the end of the day
theory look for centerpiece
vast field (2) opportunity
urban wave (3) tidal wave
tide expand contribution
basis fault (2) mismatch
federal target (2) deduction
afford uniform institution
remain run out take pack
client conflict consumption
loosen content regulator
crucial term (3) incentive
allow grapple subprime
prime issue (3) instrument
risky minority unfold (2)
bet (2) sour (2) dream (2)
wage section contagion
rate systemic population
warn keep on period (3)


Video (up till about 8:10)




Deputy Art Gonzalez: “Sheriff’s Department. Hey there.”
Pat Patterson, Resident: “Hi.”
Deputy Art Gonzalez: “I am here to affect the eviction of this property, so I need you to open the door and get whatever it is you need to get.”
Pat Patterson, Resident: “Right I understand I’ve never been been through this before, but I’m trying to go through the legal procedures for the house for the illegal foreclosure.”
Deputy Art Gonzalez: “Right unfortunately for right now, I have to kick everybody out of the house. And I turn the property over to the real-estate agent. I mean you basically have about 15-20 minutes at the most.”

It’s just another day for Deputy Art Gonzalez from the Sacramento Sheriff’s Department. Today he’s evicting Pat Patterson from the house she’s lived in for six years.

Pat Patterson, Resident: “They just round the clock for six months, until they got so far and then they gave us the foreclosure notice.”

Deputy Art Gonzalez: “Don’t forget your legal paperwork; take that with you.”

Every week deputy Gonzales evicts dozens, sometimes hundreds of people from their homes.

Deputy Art Gonzalez: “If you got a foreclosure, it was a very rare very rare thing. And now it’s it’s almost like the opposite: there’s so many of them now that’s has become the norm.

I can’t take sides I gotta remain neutral, because my job is to my main job is to affect the court order.”

This scene is repeated every day across the US as the country continues to grapple with a housing crisis that has spun out of control.

Deputy Art Gonzalez: “You know I think you learned to block it because I think I would be a basket case I think if I let it get to me. You learn to just put it in the back of your mind somewhere lock it away.”

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Owning a home has long been the centerpiece of the American dream. But since the foreclosure crisis and the subsequent near collapse of the American economy, that dream has turned sour.

More than four million people have lost their homes; millions more are at risk. And nationwide nearly one in three borrowers owes more on their mortgages than their homes are worth.

However not everyone sees the crisis as an unmitigated disaster.

Peter Westbrook, Real Estate Investor: “Okay this right here is a foreclosure. This is another one right over here.”

Peter Westbrook is a real estate investor in Stockton California, which tops the nation in foreclosures.

Peter Westbrook, Real Estate Investor: “I think everybody thought in California, it wasn’t going to end: the prices were just gonna continue to rise and rise and rise.

The bottom dropped out and everybody bailed and so they had left of huge wave of vacant houses.”

.     .     .     .     .     .     .     .

Peter brought us to Stockton’s daily auction of foreclosed houses. While the economy in the city has all but collapsed, business here at least is brisk.

Peter Westbrook, Real Estate Investor: “So this is the only outlet for a bank to sell a house that’s foreclosed.”

These people looking for foreclosure bargains are called “vulture investors”.

Amy Chen, Real Estate Investor: “We are portrayed as just basically come in and make all the money from people who are in bad situations. But the fact is if we don’t buy the property then the bank take the property back.

baby everybody needs to take a responsibility — I pay my mortgage and I pay where I have to live; so everybody else has to too.”

Peter Westbrook, Real Estate Investor: “I didn’t create that homeowners inability to make their payment I didn’t create any of their the issues that they have.

Personal responsibility is a big thing; that’s what creates opportunity.”

.     .     .     .     .     .     .     .

David Harvey, Social Theorist: “If you ask people who’ve been foreclosed upon, ‘Whose fault is it?’ They often kind of say, ‘it’s mine. It’s my fault; I did the wrong things. And instead of kind of saying this is a systemic problem.”

Social theorist David Harvey traces the roots of the current crisis back to the 30s and 40s when expanding the American economy became centrally linked to the real estate market.

David Harvey, Social Theorist: “Capital is always producing surpluses at the end of the day if you have a profit you’ve got a surplus. And the big question is what do you do with it?

What you do is you take part of that surplus and you reinvest it in something.”

Documentary Presenter: “From every section of the country come reports of vastly increased building activities.”

And in the United States housing and urbanization in general has been a vast field for the expansion of profitable opportunities.”

Documentary Presenter: “This tidal wave of new construction is an important contribution to the economic rebuilding of America.”

For decades the housing market has been viewed as an engine of growth.

Documentary Presenter: “Homeownership is the basis of a happy, contented family life.”

The federal government incentivized homeownership through tax deductions and institutions like Fannie Mae and Freddie Mac.

Documentary Presenter: “Too bad they can’t afford it. Ah but maybe they can.”

This worked as long as it comes rose.

But since the 1970s real wages for most Americans have remained stagnant.

Documentary Presenter: “The clients for those houses started to run out and so you then find a conflict between the fact that wages have not been rising but housing consumption has to keep on rising so this mismatch then became absolutely crucial.”

But bankers and federal regulators found a way out they’ve loosened the terms of credit and began to allow people with very low incomes to get mortgages. The subprime industry was born and wall street used complex betting instruments to profit off these risky mortgages.

Documentary Presenter: “So you start to go more and more down into a population that cannot really afford it and that of course is a population that got foreclosed upon.”

A group of community leaders in Chicago explained how this unfolded in their minority neighborhoods.

Community Leader: “This show how much of a systemic issue it was. This is a map that shows you foreclosures initiated over the last two years.”

Journalist: “Every single block has foreclosures. It was a contagion. I mean how could it be so uniform? Is there is there some connection?

Likewise in California, large sections of the population who had long been left out of the dream of homeownership were aggressively targeted for subprime mortgages.

They were rarely warned that the rates could get much higher in a short period of time.

California is one of the epicenters of the foreclosure crisis in the US: of the ten worst hit cities in the nation, seven of them are in this state.

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Bank, Insurance Company. The beginning of the video showed a couple in a bank speaking to a bank loan officer about obtaining a mortgage (bank loan for a house) for a new home. True or false?

Finance, Financial Institution. Was the sheriff nice and understanding, mean and angry, or objective, neutral and businesslike? Was the tenant very angry and argumentative?

Savings, Savings Account. Moving out and finding another accommodation is a simple matter for Pat, the ex-tenant. What do you think?

Interest, Interest Rate. Does Sheriff Gonzales spend all his time dealing with gangs and criminal elements? Are home foreclosures and evictions rare? Is he an evil, sadistic man?

Cash, Check, Electronic Transfer. Have housing values and prices remained constant over the years?

Deposit, Withdrawal. Home foreclosures are an unmitigated, national disaster (for everyone). Is this right or wrong? Are some people (secretly) happy about the situation? Define the word “vulture”.

Credit Card, Debit Card, Bank Card. Has life in the United States always remained the same? Was life different in the 1950s? How was it different?

ATM, Bankomat. What was the business or market strategy of bankers (and real estate agencies and construction companies)?
Collateral. What is the housing situation like in your town, city and country?

Loan, Borrow, Mortgage. Has the situation changed over the decades?

Debt, Deficit, in the Red. What is the goal or dream of everyone or different people? How do they go about achieving their goal or dream?

Installment, Payment. What might happen in the future?

Retirement Fund, Pension Fund. What could or should people, businesses and governments (and schools) do?

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