The Trouble with Money

The Trouble with Money

The Housing Crisis in the US

The Trouble with Money

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With the world's economy now threatened by what some believe is the most dangerous crisis since the depression of the 1930s, Michael Robinson looks at the deepening international financial turmoil.

part one: walking away from debt

Michael Robinson returns to America to examine the aftermath of the sub-prime mortgage disaster that is at the heart of the present crisis.

He finds the cautious optimism of earlier this year has been well and truly dashed.

US policymakers have been struggling to avoid a further meltdown of their housing market and a flood of new sub-prime losses hitting an already crippled banking system.

Michael talks to people who have had tough choices to make.

He meets disillusioned borrower Karen Trainer who, after choosing to stop paying her mortgage, asks 'What is the benefit to me of staying in something like this?'

And she is not the only one deciding to cut her losses.

More and more people are simply walking away from their mortgage obligations, effectively handing the debt over to the lender.

The greater the number of individuals taking this action, the great the tidal wave of unplanned debt for lenders.

Michael also revisits a house that, on his last trip, was on the market at $200,000.

On this trip, he finds the price has dropped dramatically to $69,900 and its still on the market.

First broadcast on 30th July 2008

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