America's Struggling Middle Class

CBS

Transcript

tough times are forcing more and more Americans to tighten their belts and even switch jobs but good jobs are hard to find Seth Don reports how one Michigan couple is trying to make ends meet part of our continuing series the other [Music] America Gross Point Woods is a Serene leafy suburb of Detroit but the grass might not be as green as it looks the house right there has been foreclosed upon U one across acoss the street Mike Remar is losing his neighbors and his wife Ruth is petrified that they maybe next I've actually had nightmares so I wake up going like that worried you've lost the house yeah those bad dreams could come true because Mike a white collar Auto worker was laid off almost a year ago if Mike does not get a job as an automotive designer soon I don't know what we're going to do 17-year-old Michael the oldest of their three sons would sure like to help but can't kids just can't get work around here anymore a lot of adults are taking jobs that te used to be filled by teenagers because they can't find more professional work and he should know because that's his dad delivering newspapers 7 days a week at 2: a.m. the remnar wake up to stuff papers in zigzag through nearby neighborhoods it's the only job they could find a paper route and it doesn't pay much do you consider yourselves middle class not anymore we were yeah you were middle class middle class yeah what do you consider yourselves now lower class back in the day the family loved vacationing hi Vicki it's Ruth how was your trip to Fiji but these days the closest they get is when they book a ticket for someone else it was cool though huh they've turned their den into a travel agency to try and earn a little more but that's not paying the bills either nobody in Michigan is traveling right now Mike's applied for a number of jobs but with a pile of rejections he was forced onto food stamps you can make the food stamps last the whole month we can make food stamps work and if you didn't have them we'd be pretty hungry hello using them is kind of embarrassing Mike says but they do put food on the table we should change our last name to the worries I mean he's worried about me I'm worried about him we're worried about the house we're worried about the kids we're worried about everything worried about this September with Michael hoping to go to college and a lump payment that they don't have due on the house all of my children but one were born here so it's hard it's just really hard for now they're doing whatever they can and hoping that good news gets delivered to them real soon Seth D CBS News Gross Point Woods Michigan

More Homeowners Selling Short

CBS

Transcript

prices may be down but many homeowners are stuck with huge monthly payments and the possibility of foreclosure but as Anthony Mason reports there is another way out this house was my dream house Nurse Kathy chick bought her New Jersey home in 2006. unfortunately I bought at the top of the market with house prices plummeting it's now worth less than her 227 thousand dollar mortgage unable to keep up with the payments Kathy decided to sell short basically it's my only option before foreclosure a short sale is when a borrower sells their home for less than the amount owed with the lender for giving the difference the homeowner avoids the stigma of foreclosure the lender avoids getting stuck with the property now almost 80 percent of my business is short sales they're putting two thousand dollars down realtor Frank Weibel has become a specialist in short sales which are now estimated to account for one out of every five home sales in the country I think it's the next two and a half to three years you're going to continue to see short sales you're going to see them prevalent but selling shorty is not an easy way out first the lender has to approve and they're always comparing it against foreclosure can they get more from a fork closure sale than they can from a short sale there's nothing short about short sales either the approval process can take months you have to show evidence of hardship and it will affect your credit rating but there's probably nothing worse than the impact that a foreclosure would have on borrow its credit score well I'm waiting Kathy chick waited two months for Bank approval and so it's extremely scary because I don't know I don't know if I'll be able to make next month's mortgage payment but she finally got it now a short sale could save her from her dream house nightmare Anthony Mason CBS News New York