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There was a nice expose on CBS 60 Minutes this weekend...

There was a nice expose on CBS 60 Minutes this weekend called House Of Cards. I seldom watch TV but happened to catch it. Steve Kroft reports on how the U. S. sub-prime mortgage meltdown, in which risky loans drove a housing boom that went bust, is now roiling capital markets worldwide. Click here to play video. Steve Kroft: 'It sounds complicated but it's really very simple. Banks lent hundreds of billions of dollars to homebuyers that can't pay them back. Wall Street took the risky debt, dressed it up as fancy securities and sold them round the world as safe investments. If it sounds a little bit like a shell game or a ponzi scheme, in some ways it was'....'Matt and Stephanie Valdez say they knew exactly what they were doing when they bought this small two bedroom house for $355,000.'....They cannot refinance because the value of the house fell below the existing mortgage. They say they can afford the higher payments but see no point in making them. Matt: The value of the house keeps going down and the payments keep going up. Where's the logic in that? Stephanie: Why make a $3200 a month payment on a 1200 square foot home? It makes no sense. Steve Kroft: But that's what you agreed to do when you bought the house. Stephanie: Fine if the value was going up. The value is going down. Steve Kroft: You are saying essentially you are going to stop making payments. Stephanie: The only advice we've gotten so far is to walk away.60 Minutes Legitimizes Walking AwayWhat 60 minutes described was a Beautiful Model For Fraud. That model is now imploding as all fraudulent schemes eventually do. And for those on the fence, 60 Minutes may just have legitimized it walking away. The LA Times is writing A tipping point? 'Foreclose me... I'll save money'

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