That’s what the team at Oppenheim Law realized after watching 60 Minutes’ latest piece on the foreclosure crisis. This time Scott Pelley focused on a neighborhood in Cleveland where officials has resorted to tearing down what were once perfectly good homes.

Why? Because the banks that control the homes have been acting as terrible irresponsible neighbors. The end result is too many neighborhoods are littered with abandoned properties, many of which have been stripped to the bone by thieves. As many as 25 percent of these homes are now empty, according to Pelley. These neighborhoods, of which there are far too many, have fallen into a state of disrepair, where a total tear-down is the only option.

You don’t have to be underwater to get splashed

Probably the most disturbing revelation to come out of the 60 Minutes story was the foreclosure crisis has impacted all homeowners, regardless of whether they are in danger of losing their homes or not. In fact their homes didn’t even need to be underwater to feel the pinch of the housing mess.

With countless homes now empty and transformed into eyesores, those who remain are seeing their property values sink faster than the Titanic. People are left with homes that are virtually worthless and unsellable, so even if they wanted to buy a home somewhere else, it’s unlikely they could.

Once such woman featured in the story, Roberta Bryant, when asked what her home was now worth, replied “30 dollars.” She might have been laughing when she said it, but she wasn’t joking.

Banks leave communities behind, while homeowners rally behind them

While there has been plenty of debate whether people should walk away from a house that is underwater, 60 Minutes revealed a dirty little secret, banks have been doing just that.

When you look at the condition of some of the abandoned homes seen in the story, one needs look squarely at the banks for blame. They should be maintaining these homes after they foreclose on them, but instead in many cases they do nothing, allowing these homes to become blights on the neighborhood and a haven for squatters or criminal activity.

The fact is, banks are cheap too. For all the the talk about financial responsibility, Jim Rokakis, a former county treasurer who spoke to Pelley said banks sometimes won’t go through with a foreclosure to avoid spending the $8-$10,000 to tear the house down. A cost the government is often left to pay.

Which is why we’re proud of homeowners like Linda Bizzelle. She was one of many homeowners interviewed, who despite having a home that’s now worth half of what she paid for it, refuses to walk away. People like her are the reason this epidemic hasn’t spread.

Monica Hubbard, another such homeowner, was asked why she continued to pay her mortgage.

“Because I signed on the line. I made a promise”, she replied. When asked if her signature still meant something, she answered “It does.”

Now when was the last time you heard a bank say that?

The ‘Principal’ Solution

Rokasis didn’t flinch when asked what it would take to keep more homes from meeting a wrecking ball. To the surprise of no one — he puts the responsibility, as he should, on the banks.

“You’re gonna have to write down principle balances,” Rokasis told 60 Minutes, “Because if you don’t write down the principle to something that’s more realistic, it just guarantees that more people will walk away and more people will default.”

We couldn’t agree more. The banks have often taken an all-or-nothing approach to foreclosure, which is akin to putting a square peg in a round hole. It just won’t fit anymore. If the banks won’t accept responsibility for mess they created, than they at least should lessen the burden on today’s homeowner. It makes no sense why they wouldn’t want to keep people in their homes, even if they take a loss.

Isn’t getting 75,000 dollars back on a 150,000 loan better than having a homeowner walk away and getting nothing in return?

Foreclosure is a troublesome virus that is on the verge of becoming a pandemic, banks have the cure — now if they would only use it.

Roy Oppenheim
From the Trenches

Florida homeowners are invited to tune in to get perspective on where the market is today, where we are headed and options available to craft a personal bailout.

From the Trenches by Roy Oppenheim is a community service talk show. It is designed to interact and engage the South Florida real estate community of buyers, sellers, investors and real estate professionals in a lively online forum.

Meet the first guests on From the Trenches

Guests Stock and Sessions offer expert depth and perspective on the status of the chaotic Florida real estate market .

About Stephen Stock

Bringing his years of experience to the screen, Stock hasn’t just reported the news, he’s helped change policy. After reporting cases of fraudulent documents used in foreclosure cases, a major home title insurance company stopped providing title insurance for homes foreclosed on by GMAC Mortgage, one of of two companies Stock discovered couldn’t verify the documents it was using in court. Among his numerous accomplishments, Stock is a regional Edward R. Murrow award winner and was named an Ethics Fellow at the Poynter Institute for Media Studies in St. Petersburg in 2004.

About Patrick Sessions

Currently Councilman of Coconut Grove Village Council and founder of Sessions Development, Patrick Sessions has over 35 years of experience in the real estate industry, including serving as president of Weston, the largest planned development in South Florida, from 1985 to 1991. His broad range of expertise is evident in the list of diverse projects his firm is involved with, as well as his additional experience in the corporate elements of the industry. Sessions founded the company that bears his name in 1992 to provide real estate development services for his own interests, as well as investors and owners.

Together Oppenheim, Stock and Sessions will discuss the past year’s cascade of headlines ranging from corruption to fraud to the fall of South Florida’s largest foreclosure mills.
Watch it live or replays via your iPad, iPhone or laptop via http://www.oppenheimlaw.tv starting May 12, 2011.

Signing 4000 documents a day for $10/hour
Pelley interviews Chris Pindley, a former robo-signer who estimates that he signed over 4,000 documents a day. Pindley signed the documents using a coworker’s name because her name was short and easy to write. This coworker, Linda Green, was given the title of “vice president” of about 20 different banks… at the same time. This “vice president” of multiple banks and her coworkers were paid 10 dollars an hour for their work. Pindley even remarked that as they sat around a table signing papers, he told the others that one day they would be on 60 Minutes: how prophetic.

Homeowner must have all paperwork perfect, while banks cheat and forge
While requiring thousands of everyday folks to have all of their paperwork perfect and wait in line for days just for the chance to beg for some sort of a reprieve, these banks felt that they could forge the documents they needed to throw people out of their homes. These kinds of double standards are endemic in the industry and are an unconscionable assault on the public. Scott Pelley’s work here is an invaluable insight behind the colossal corporate wall into the shenanigans of the banks and the everyday people caught up in the mess.

Banks are finally getting busted, will they ever be trusted? What next?
Roy Oppenheim
From the trenches

PS: If you liked this post, please take a second to vote for the South Florida Law Blog, nominated for three categories for the Sun-Sentinel’s Best of Blogs Awards (Best Business Twitter Feed @oplaw, Best Business and Technology Blog and Best News Blog)! Thank you!

After doing the math and watching property values shrink in some instances to less than half of what’s owed on a mortgage, homeowners are opting to rid their underwater property and start fresh.

According to 60 Minutes, more than 11 million homeowners across the country are underwater, and it’s estimated that number could double in the next year.

This means nearly half of all American mortgage holders will owe more on their homes than those homes are currently worth.

Oppenheim Law has presented the theory of strategic default in our monthly Florida Foreclosure Defense Workshops and also with FOX News WSVN and CBS 4 News. Check out the videos below.

“We’ve been through an event that none of us have ever experienced in this country since the Depression,” David Stevens, the commissioner of the Federal Housing Administration, told Morley Safer and 60 Minutes.

Check out the entire 60 Minutes strategic default segment below and share your thoughts in the comments section.

Watch CBS News Videos Online