Anatomy of a Meldown: The Credit Crisis

A three-part series by The Washington Post dissects the current credit crisis. The series looks at how forces aligned to create "the biggest American housing boom since the 1950s," the stress on the market when new homes went unsold and foreclosures mounted, and finally how the overall impact of the housing market implosion.

Cary Spivak and Daniel Bice of the Milwaukee Journal Sentinel detailed how a motley collection of individuals and firms made money off one suspicious real estate deal in which a learning disabled man ended up buying a run-down inner city home. The newspaper hired a handwriting expert who determined that signatures may have been forged in the loan process and that a mysterious $38,000 payment was made to the loan broker, a felon under indictment at the time.

A series by Debbie Cenziper and Sarah Cohen of The Washington Post looks at the condo boom in the District of Columbia. Tenants are being displaced as landlords convert apartments to condos using "vacancy exemptions" — sidestepping tenants' approval and avoiding conversion fees that would offset renters' relocation costs. Through the analysis of government documents, housing code complaints and assessor's records, Cenziper and Cohen found "landlords emptied more than 200 buildings from Columbia Heights to Southeast, most of them rent-controlled, thwarting the intent of one of the nation's toughest tenant rights laws with the approval of the city government." The landlords involved made over $328 million while avoiding government fees of over $16 million.

Susan Kelleher and Justin Mayo of The Seattle Times looked at how older borrowers and homeowners are targeted for predatory loans. Analysis of over 4,000 loans from Ameriquest Mortgage uncovered the trend of elderly homeowners being targeted for subprime refinancing that they would never be able to repay, resulting in the loss of their home and other assets. The project profiled a woman with Alzheimers who lost $2 million in assets, in part to predatory loans.

A mortgage scam has deceived homeowners in 27 states, including at least 17 in New Jersey. Jason Method of the (Neptune, N.J.) Asbury Park Press investigated the fraud, in which a company contacted homeowners who had been struggling to make their payments. The company promised them a deal: An investor would temporarily buy they property while the homeowners paid rent to live in their own house and bought the property back within two years. But larger loans were taken out on the properties using the names of unsuspecting "straw buyers," third-party investors who were paid to lend their credit scores to help the struggling homeowners.

In an ongoing investigation, Jeff Pillets of The Record in Bergen County, N.J., uncovered how a taxpayer-supported plan to reclaim the North Jersey Meadowlands instead reopened the infamous garbage dumps to millions of cubic yards of contaminated waste. A review of some 10,000 pages of state documents revealed that the site's developers won a string of state government concessions that stripped down or eliminated key environmental safeguards. At the same time, those developers were makings millions in tipping fees for the contaminated waste being brought to the site as a "cap" for the old landfills. Recent stories in the series also trace the political ties behind the deal and the fallout for politicians who initially supported the development.

An investigation by The Sacramento Bee's Terri Handy and Phillip Reese shows that former NBA star Kevin Johnson is responsible for a slew of neglected properties in the downtrodden area of Oak Park where his investments have been widely publicized and praised. "Within a two-mile radius, a Bee investigation found, half of the 37 parcels owned by Johnson or companies and organizations he founded have been cited by the city in the past decade, some multiple times. The 73 violations at those Oak Park properties resulted in 42 fines or fees totaling at least $32,080."

The Asbury Park(N.J.) Press analyzed federal Home Mortgage Disclosure Act data to report that in Monmouth and Ocean counties subprime lending accounted for one out of five mortgages in 2006, a total of $3.1 billion. Reporter Jason Method found "the income of subprime borrowers was 5 percent lower than those taking out traditional mortgages, yet the subprime borrowers took out loans that were 10 percent larger."

Florida Today published a three-part report on how the local economic boom has gone bust. "The shifting real estate market has spooked homebuyers, frustrated sellers, stalled new development and trapped some residents with mortgages they can no longer afford." Reporters John McCarthy and Scott Blake, and assistant managing editor Matt Reed examine the trends and the stories of people who years ago sought jobs in construction and real estate but now find themselves out of luck.

Rich Brooks and Constance Mitchell Ford of the Wall Street Journal examine the sad state of the country's mortgage markets, finding evidence to dispel the conventional wisdom that subprime loans mainly were given out to low-income borrowers who can't afford the payments. Instead, the newspaper reports that ". Although the concentration of high-rate loans is higher in poorer communities, the numbers show that high-rate lending also rose sharply in middle-class and wealthier communities." An interactive map accompanying the story shows the number of subprime loans issued between 2004 and 2006.

The Home Mortgage Disclosure Act data used in this story was obtained from IRE and NICAR's Database Library.