Stephen Smith: From American Public Media, this is an American RadioWorks documentary.

Tourist 1: We went on a search for the finest martinis.

It may not be what the tourists come for.

Tourist 2: Excitement.

Tourist 3: Casinos.

Tourist 4: The best of everything here.

But in its heyday, Las Vegas was one of the last spots where the American Dream still seemed widely possible.

Debbie Doussault: The economy was so bad back home, and the money was so good out here.

Steve: You want to do better for your family, so you buy a bigger house.

So now, why does Las Vegas have one of the highest foreclosure rates in the country?

Frankie Rodriguez: You can't have moet tastes on a beer budget.

Jim Beltran: Maybe I'm stupid, but look at how many other people were stupid.

I'm Stephen Smith. In the coming hour, "Foreclosure City," from American RadioWorks. First, this news.

[Sound of people walking inside airport terminal]

Smith: This is Stephen Smith in Las Vegas, Nevada, one of the most visited cities on the planet. And many people start their visit here, at MacCarran International Airport.

Now, Las Vegas is not a subtle place. So even before you get to the Strip-in fact, as soon as you step off the plane and into the airport-you come face to face with something that has come to define this city.

[Sounds of the airport slot machines]

Actually, I'm not talking about slot machines, though you will find rows of them on your way to the luggage carousel. I'm talking about something else-or, someone else.

[Sound of curb outside airport, and Jim Beltran hefting luggage]

Jim Beltran: Where you going?

Male Tourist: Hilton.

Beltran: Hilton.

Female Tourist: Venetian.

Beltran: Venetian. [More sound of Beltran hefting luggage] Oh God!

Smith: Hi there, my name is Stephen Smith. Can you tell me who you are?

Beltran: I'm Jim Beltran. [Engine of shuttle bus starts, and bus starts driving]

Smith: And what do you do for a living?

Beltran: Now I'm a bus driver, shuttling people back and forth from the airport to their hotels.

Jim Beltran is a shuttle bus driver. One of the thousands of folks in Las Vegas's service industry that makes this city run. And right now he's driving down to the strip where all the big casinos are. Jim is also one of the millions of Americans in danger of losing a home to foreclosure, and, he says, so are most of his coworkers.

Beltran: The one's that own homes, and aren't renting... .every one. You know sometimes I don't know whether to blame myself. Maybe I'm stupid, but look at how many other people were stupid.

In fact, just about anybody who lives in Las Vegas has a personal story of foreclosure, or near-foreclosure. And if they don't, they know someone who does. Nevada's had the highest rate of foreclosure in the country for the last two years.

[Sound of radio dispatcher on Beltran's shuttle bus.]

From American Public Media, this is an American RadioWorks documentary, "Foreclosure City." I'm Stephen Smith. And Over the next hour, we will visit Foreclosure City-aka, Las Vegas.

[More sound of radio dispatcher on Beltran's shuttle bus.]

Something like 10% of houses in Las Vegas are either in foreclosure, or close. That's compared to about 1% of homes nationwide. So it's a huge problem in Las Vegas--like 67,000 homes last year alone.

Beltran: And just ahead of us to our left, you can see the "Welcome to Las Vegas sign."

Smith: Ah yes, the famous "Welcome to fabulous Las Vegas." Should it maybe read "Welcome to the unofficial Foreclosure Capital of the U.S.?"

Beltran: [laughs] I hope not. I hope not.

But in many ways, that's what Las Vegas has become. In fact, this years Las Vegas pushed out Detroit for the distinction of the "emptiest" city in America.

Beltran: If it doesn't work out for me, I'll be one of them leaving too.

You've undoubtedly heard a lot about foreclosures lately because after all, the subprime mortgage crisis is at the root of the national recession. But Vegas was supposed to be recession-proof. It was supposed to be a new model for economic growth in America - a service economy. For the past 20 years, the industrial U.S. was rusting away, and losing work to overseas factories. But Las Vegas boomed. It epitomized America's appetite for risk and luxury, and the city couldn't build new homes or fill new jobs fast enough.

Beltran: [Pulling bus over to a stop] This is the Venetian! Venetian!

A lot of the people buying houses in Las Vegas - if they lived in other U.S. cities -they'd be considered the working poor, or pretty close. People like Jim, who came to this gleaming city in the desert for a new start at success. Jim is 76.

Beltran: 77 August 24th.

He has a heart condition.

Beltran: And the only reason why I still drive, and pull myself up in the morning is, if they're to ask me, do you have a job, I'm able to say yes.

The "they" Jim is talking about is his mortgage company, Countrywide. Countrywide's n ow infamous for it's central role in the sub-prime drama. Jim's interest rate is about to balloon, and he won't be able to afford his monthly mortgage payments soon. So, before that happens, he's hoping to get Countrywide to modify his loan, to reduce his payments. But if he doesn't have a job-something to show he's at least trying to make his mortgage- he's afraid he'll be denied. That's why he keeps driving tourists around on this shuttle bus.

Beltran: [Pulling the bus over again] Be careful getting out please!

The foreclosure crisis in Las Vegas raises hard questions about the classic American Dream of buying a home and getting ahead, about what is a prudent investment and what's a reckless gamble. Here on the bus with me is Producer Krissy Clark, who's been reporting on this story for more than a year, and Krissy you told me I had to meet Jim Beltran, the bus driver. How did you meet him?

Krissy Clark: Jim and I met at a foreclosure workshop actually, these workshops that non-profit groups put on in Las Vegas a few times a week, and they're packed, almost all of them, because so many people are trying to avoid foreclosure. They want advice. And the one I went to had probably sixty people crammed into a small classroom. And the teacher was trying to be positive, and was trying to remind people that even if they did lose their homes, they could always start over: build back up their credit, and buy another house some day. And I heard this voice in the back of the class say "Not if you're my age you can't." [Sound of bus engine fades out.]

[Sound of walking up to Jim Beltran's house.]

Beltran: Hi there.

That voice belonged to Jim Beltran. After we first met last winter, he invited me to come over to his house, to meet his wife.

Beltran: That's Ruthmarie.

And their cat.

Beltran: That's Felix.

Clark: Felix!

Ruthmarie: We'll just go down the stairs here to the living room.

Jim and Ruthmarie live in a subdivision, in a small three-bedroom house with high ceilings and lots of windows.

Ruthmarie: And it's such a joy to wake up in the morning and come in to a nice bright living room. I never get used to it. It doesn't get boring.

Memontos from their lives cover every surface: pictures of their kids and grand kids on the walls, dream catchers over their beds.

Ruthmarie: They don't help my dreams that much. [laughs]

Jim and Ruthmarie bought this house 10 years ago.

Beltran: Wasn't even built yet. We watched it being built, and we sold the trailer.

They moved here from Alaska in 1988, after bouncing through a series of jobs. Jim had been a cop, worked for the state government, labored on the Alaskan oil pipeline, and then started a janitorial service that failed when Alaska hit a recession. So Jim and Ruthmarie left in pretty bad shape, financially.

Beltran: Honey what were we eating?

Ruthmarie: Top ramen and hot dogs.

Beltran: Top ramen and hot dogs, and renting apartments. So, let's go start things new some place else. And we were getting, not tired of Alaska, but by that time we were getting kinda old, and it was kind of cold up there. [laughs]

Las Vegas seemed like the perfect place to go. It was an up and coming city, with a booming service industry. New casinos were opening all the time, and there were jobs for the picking. Housing was still pretty cheap.

So Jim and his wife saved money, bought their trailer, and then after a few years, traded up for a house in a new subdivision, and watched their property value soar. By 2006 it was rising $10,000 dollars every few months.

Mortgage brokers started calling them and sending them letters asking if they wanted to refinance their house, take out a line of equity and capitalize on the real estate boom. Nowadays, people look back, wag their fingers, and call this "using your house like an ATM," but back then, everybody was doing it. Jim says it seemed like a wise bet.

Beltran: I mean everything they told us sounded so good, you know? The payments, we could afford them. It just sounded good.

So they refinanced. Used the money to pay off their cars, their credit card bills, do some landscaping. They got an adjustable rate mortgage-Jim wasn't exactly sure what that meant, until he started getting letters recently, saying his monthly payments were about to go from $1700 to $2000.

Beltran: And that's what I'm trying to avoid. If the adjustable kicks in, I will be another candidate for foreclosure.

Of course there's really no such thing as Foreclosure City. But after spending so much time in Las Vegas over the last year, working on this documentary, it's sometimes what I found myself calling this place. Foreclosure City is kind of the Bizarro world to the Sin City that we all know about.

For example, if the quintessential sound in Sin City is that jingling sound that slot machines make when you hit the jackpot.

[jingling sound of slot machines]

This is the sound of Foreclosure city:

[high pitched beep]

You hear this sound softly echoing through neighborhoods all over town.

[more beeps]

An occasional, high pitched beep.

[more beeps]

At first, I didn't know what all the beeping was. Then I realized it's the sound of smoke detectors whose batteries are almost dead.

[more beeps]

There are so many abandoned houses in Foreclosure City, there's no one to replace all the batteries, and make the beeping stop.

Foreclosure city also has a certain scent.

Rob Cole: Smell it? [sniff sniff]

Clark: Oh yeah.

If Sin City smells like a mixture of Axe Cologne, and exhaust from all the cars clogging up the Strip, a different smell clings to the air in Foreclosure city.

Cole: See it's just a very distinctive, like algae, you know.

One part algae, one part rotting, water logged leaves, and occasionally a drowned animal.

Cole: Birds dogs, cats, a snake.

Because a lot of homes in Las Vegas have swimming pools. And now that so many homes have been abandoned to foreclosure, no one is there to keep up the pools. The chemicals evaporate, and you've got thousands of perfect little breeding grounds for mosquitoes, which is where Rob Cole comes in.

He's an environmental health specialist with Clark County, where Las Vegas is located. People are worried about West Nile Virus, since it's carried by mosquitoes. So the county sends out Rob, with a big bucket of tiny silver fish that eat mosquitoes.

Cole: [swishing sounds of water] It's pretty simple. I'm just going to pour them in slowly, and then you'll see them for a minute and they'll start to swim away. More things living in that pool than in that house, a lot more.

Three years ago a guy like Rob would treat maybe a few rotting pools a month--mostly cases where the owner was out of town, and the neighbors started to smell something. But now there are so many foreclosures in Las Vegas, he can treat more than twenty pools in a day.

Cole: I get like twenty reminders a day of how not to buy a home, and how to save money first. That's the main thing, I'm like, when I buy a home I'm going to make sure I have the finances.

Through the back windows of this house, with the pool you can see into the dining room. It's empty. But there's something scrawled on the wall in black spray paint. It says: "After 15 years here. Thanks."

Foreclosure City leaves certain images burned into your eyes.

[dogs barking loudly]

If Sin City is covered with billboards of sequined magicians and girls in thongs, Foreclosure City's billboards have pictures of scruffy dogs, looking for new homes.

D.J. Cogswell: This is banshee, she was a foreclosure dog, huh pumpkin?

Animal shelters in Foreclosure City are beyond capacity these days. DJ Cogswell works at the SPCA here. He's wearing a t-shirt that says, "the best little cathouse in Nevada." He says when people lose their houses to foreclosure a lot of them leave their cats and dogs behind.

Cogswell: Lately we've been seeing, like, realtors and contractors come in and say we're working on this property and we went in there and we found this animal.

Welcome to Foreclosure City-the shadow city of Las Vegas, Nevada. It's a distressing place. What makes it all the more distressing is how different it is from what was happening here until just recently. Not the "what happens here stays here" stuff of tourism campaigns, but stories of everyday people bettering their lives, stories that would make Horatio Alger proud, involving not the people who play on the strip, but those who cater to them. The parking valet who made so much money in tips that he bought his own Ferrari, with cash. The cocktail waitress who saved enough money to buy her own house.

Bill Anderson: Folks rising from the gaming room floor to being in the executive offices.

Bill Anderson is the chief economist for the Nevada department of Employment.

Anderson: Folks starting with a small home building operation, and seeing that balloon as the economy rose.

For the last two decades Bill's office has been keeping track of the jobs people came for when they flooded into Las Vegas. Every month 4,000 to 5,000 new residents would come from across the country and around the world.

Job growth was four times the national average. Las Vegas boasted one of the highest average incomes for people without college degrees. It was one of the last places the American Dream still seemed possible: doing better than your parents, passing something on to your kids. Except in Las Vegas it could happen in one generation. It was the American dream on steroids: bigger, and faster. People called it the "Las Vegas Dream."

Anderson: If you we're willing to work hard. Nevada was the place to be. For two decades running we were the fastest growing state in the nation because folks in search of economic opportunity came to Nevada. I come from the state of Michigan, which is going through some terrible struggles right now. There are a lot of people that have left the rust belt to come to Nevada.

In fact, many economists saw Las Vegas as the "new Detroit," a city with a powerful union presence where workers could find good, well-paying jobs, and a foothold in the middle class. Instead of building cars or machinery, they built something less tangible- a fantasy of luxury served up for tourists.

Anderson: By far our biggest economic engine is on the leisure and hospitality side. We thrived on providing services as opposed to providing goods, and that proved to be very successful for us.

It was a microcosm of a larger trend going on in the country. More and more places that were losing manufacturing jobs overseas turned to the service economy for new hope. And when it came to service, Las Vegas was on the cutting edge. The city was hailed as a new economic model for the 21st century.

Debbie Doussault: [sounds of plates clattering in a banquet hall] The economy was so bad back home, and the money was so good out here.

Debbie Doussault came to Las Vegas from an old industrial town in Rhode Island in 1990. She was just passing through--visiting a friend-but she stayed.

Doussault: I was here a couple days and I already had a job, and I was working. And, I couldn't leave.

Debbie didn't finish college, so her job options were a little limited. In Rhode Island, she'd worked at the airport for a while. Then waited tables. The jobs didn't pay well, and frankly, they were boring. In Las Vegas, she got a job at a shiny green casino with lions--real lions-- in a glass cage near the lobby.

She's a banquet server, at the MGM Grand. Sometimes, when a big convention comes through town, she works 16-hour days. She loves it.

Doussault: I work with people from everywhere. I mean, I have friends now from Switzerland, from South Africa, from Ethiopia, from Thailand, from Singapore.

And there's an air of glamour to it. When she serves food at celebrity fundraisers, she meets famous people in between the platters of lettuce wraps, and Chicken Vesuvio.

Doussault: Robert Diniro, Joe Pesci. My favorite person in the whole wide world, Robin Williams. Danced with him actualy. He would come back and all the servers would be sitting in the back, and he would come back and he would start cracking jokes, and he'd do a twenty minute stand up right there with the servers.

Times were good when she got the job. Thanks to the culinary union she belonged to she had a pension, free health care. She made several times what a banquet server would earn in most parts of the country. And, as she gained seniority, and more shifts, her income kept growing. By 2005, she was making almost $80,000 a year.

Her landlord wanted to sell the house she was renting, and one day she thought: maybe I can buy it. The way prices kept shooting up, she was afraid if she didn't buy soon she'd miss her chance.

Doussault: And I'm like well, let the chips fall where they lie, we'll see if I get a loan. I put everything out there, this is what I have, this is what I make, I don't own any bills, can you do it?

She got a loan, with a catch. She didn't qualify for a traditional loan big enough to buy the house she wanted. It cost $320,000. But she could get one of those "subprime loans" we hear so much about now. It had more flexible terms. Debbie put no money down and for the first two years, she paid only interest on the loan, none of the principle.

Debbie says her mortgage broker assured her that after that, when her payments started to increase, she could just refinance. The way things were going back then, it was a good bet that the value of her house would have increased too, not to mention her income. It seemed like a smart gamble.

Doussault: And I was like ok, and if you think I can do it, then I guess I can. I wasn't really ready to buy a house, but I figured if I could get the loan, then obviously they thought I was ready for it.

These were the sorts of deals that, a few years ago, were happening all over Las Vegas and many parts of the country where subprime mortgages were common. When people talk about them now, they're sometimes used as quiet indictments of foolishness and greed. As in, "How could a banquet server think she could afford to buy a $320,000 house?!" But four years ago, when Debbie the banquet server did buy her $320,000 house, she was a poster child for the Las Vegas dream. The dream that, with hard work, optimism, and some calculated risk, even a banquet server could afford to buy her own house. A nice one.

Doussault: This is home. [Door opens.] This is our backyard and there's the park that we hang out in, where Marley and I go for our little walks.

Debbie has a black lab named Marley, like Bob Marley, and two cats-Rasta and Desi.

Doussault: Just a few weeks ago we were over here on the path here, walking, Marley and I, and some lady and her husband or boyfriend, I don't know, and their dog come walking through. It was Susan Anton, and her dog Joe. Marley liked Joe. Marley kept trying to hump him. [laughs] And I'm like 'oh stop!'

Debbie is 49, and single. She's got long curly black hair. She's wearing jeans and a sweatshirt.

Doussault: And I'm an Elvis nut.

Pictures of Elvis line the staircase, in between pictures of her nieces and nephews.

Doussault: [To her dog] You coming buddy boy?

Debbie's house is a three-bedroom, two and a half bath, on a short cul-de-sac. From the outside, her place looks like every other one on the street: white stucco, red tile roof. But inside, Debbie has put her imprint on every room. The bathroom has a zebra theme. A dog motif in the guest room. Debbie says the home improvement shows on Cable TV inspire her.

Doussault: This is our room. I painted it all satin finish, and then I got a high gloss finish of the same paint and did the stripes. Measured it all out, and did the stripes. And that's my roommate's room.

Debbie shares her house with a roommate, an older guy that she works with. She'd prefer to have the place to herself, but she needs his rent money to make her mortgage.

Her income has dropped by half since last year. Fewer conventions come through town thanks to the recession, so Debbie's lost a lot of shifts. And once the interest rate adjusted on her loan her monthly payments jumped from just over $1500, to more than $2100.

Meanwhile the value of her home is sinking. She owes the bank far more than her home is worth now-so she can't refinance.

Doussault: I tell myself everyday, why don't I just walk away from this one, I'll screw up my credit, but I'll rent a place, and in two years, buy a house probably bigger than this one and it will cost me less money. I tell myself that every day. But then I look at it, and I look around at what I got, and I go, 'I don't wanna. I want this one. I want to stay here.' This is home.

To stay in her home, Debbie's been willing to try all sorts of things. Besides the roommate, she approached her bank about a loan modification last year, but they turned her down. They said she was still current on her payments, so she didn't need help yet. That's been a common complaint among homeowners... often, banks won't negotiate until homeowners actually stop making the monthly payments and ruin their credit.

When I called Debbie's mortgage company, to ask about this, they declined to comment.

But, Debbie kept looking for ways to save her house. She got something in the mail from a company saying they could get a loan modification for her. She paid them $2500, got a few follow up calls from an employee, and then never heard from him again. Scams like these are common in Nevada right now.

Doussault: And that's the frustrating part, is not knowing who to trust or who to talk to. [phone rings] I want someone to come up to me and just say look this is what I would do if I was in your shoes. [phone rings again.] Oh sh--t!

Just then, the phone rings. Debbie'd forgotten about the plumber she'd called to look at her leaky toilet. He's outside, and she takes him upstairs to see what's wrong. Debbie's dog Marley thumps his tail against the cabinets, and nuzzles the guy as he works.

Plumber: Whoever did this tile work, set your toilet on and they didn't do it properly. To do it right, we're going to have to raise the phalange up with a repair kit.

[Thumping of Marley's tail against the cabinets]

Doussault: Uh huh. And what's the cost of that?

Plumber: That is going to be... 410.

Doussault: [sighs] Because I don't have the money right now. I don't have the 400 dollars to do it. I'm not presently working, 'til next week.

Plumber: Your house being foreclosed?

Doussault: Not yet.

Just when Debbie needs all the money she has to keep her house, the house keeps needing more money. She asks the plumber if there's some sort of quick fix he can do until she has the funds to pay for all the work. He stares at her and says nothing.

Then, he says he'll see what he can do, and charges her twenty bucks. She tips him another twenty, as thanks.

When he's gone, I have a question for Debbie. Doesn't she ever wish she could go back to renting, and let a landlord deal with this kind of stuff? She looks out the window at her backyard, and says no.

Doussault: Being here, being single, being on my own, and I turned around and bought my own house. I mean that's a big deal. It's a really big deal. The thought of losing it, is kind of like a slap in the face. My heart is here. I don't know what holds me to it. It's...this is home. It's where I'm supposed to be.

Now Debbie has paid another company another few thousand dollars, to try to get a loan modification. In the meantime, she's stopped making her mortgage payments. It's a gamble-that might ruin her credit and lead to foreclosure. But it might be a way to stay here.

[Music Bridge]

Kendra Sellers: Hi I'm Kendra.

Beltran: Hi Kendra.

Kendra: It's nice to meet you.

Beltran: I'm Jim Beltran.

Kendra: Jim?

Jim Beltran, the shuttle bus driver that we met at the beginning of this story, is early for his appointment at Consumer Credit Counseling Services of southern Nevada, or CCCS. And he and his wife, Ruthmarie, are both wearing jade pendants around their necks, in the shape of monkey's eating peaches. Ruthmarie says they represent long life and riches.

Sellers: Lemme get an extra chair in here.

Jim and Ruthmarie are here to see Kendra Sellars. She has red hair and a warm smile, and a very tired look to her eyes. She's a housing counselor with the non-profit, and she meets with ten clients a day, an hour at a time, back to back. Most of them come for the same reason Jim and Ruthmarie have. They want to avoid foreclosure, and they want her to help. .

Sellers: What I'm going to do is put in all of your information.

Jim explains the situation to Kendra. He and his wife are in their seventies. She's retired. He works part time as a shuttle bus driver. They refinanced their house two years ago, at the peak of the real estate bubble, to pay bills, do some landscaping, buy a few things. The loan they got had an adjustable rate, and the monthly payments are about to go up $300. Jim shows her the loan papers.

Sellers: Oh my gosh, it's going up two percent.

Jim says Work is slow, and his income has dropped. So even at his current interest rate, he has to pull $500 a month out of his savings just to keep up with his mortgage.

Sellers: But you don't want to have to keep dipping into your savings every month, because sooner or later that's going to give out.

Jim nods. Kendra asks him a series of questions about his income and expenses, and plugs his answers into a computer program. [Sounds of typing on the keyboard]

Sellers: So what we've got here is.

Beltran: 514.

Sellers: Negative.

Kendra points out what they already know. He's spending more than he's making. She looks at the budget, and makes a few suggestions. Maybe they could get rid of their cell phone? Not go out to eat as much?

Sellers: It's a free world; you can spend money however you want. However, while we're at it, people have been known to live without cable TV. So, it's a matter of priorities.

Then, she leans forward.

Sellers: Another thing I want to bring up to you.

Beltran: Um-hm?

Sellers: 68% of your income is being paid for your mortgage payment, that's really, really high. That's about twice as much as it should be. It should be around 30 to 35%. So an awful lot of your income is going to this house.

Beltran: If we were going to rent, I really wouldn't have to work or anything. Oh I know all that. Yeah. But then again--

Sellers: OK. I'm here to tell you all your options.

The advice to give up the house is not what Jim came to hear. They talk about Jim's efforts to get his bank to modify his home loan. It's in the review process right now, and Kendra tells him to call every day to check on it. The squeaky wheel gets the oil.

Beltran: Anyhow, thank you so much.

Sellers: You're welcome.

Kendra wishes them luck, and walks them out. Then she comes back to her office, sits down, and takes a deep breath.

Sellers: [Sighs] Probably two thirds of the people I see really should let their houses go. They really should. But they don't want to. That's their dream house, and they want to stay in it.

Kendra holds mortgage lenders largely to blame, for getting folks into houses they couldn't afford.

Sellers: But I don't think that the borrowers can be totally absolved of all this either, because they were taking a gamble on this house. They thought the price would go up.

Kendra also points her finger in one more direction. The American Dream itself, and the way it played out in Las Vegas.

Sellers: The American way is to have a house. I mean that's what everyone's dream is. And I know that's why a lot of poeple move here. Homes were more affordable than they were in other parts of the country. People thought at the time that was their last opportunity to get a house, that they would keep on rising, and they were going to jump in there and get that house and live the dream.

But, Kendra says, maybe that wasn't the right dream for everybody.

[Music Bridge]

Beltran: Saint Jude, thank you for everything you've done for me and my family.

Foreclosure City is filled with whispered prayers. Jim Beltran says this is his.

Beltran: Um, I have a problem now. I've got my mortgage, I'd like to get that straightened out. But the main thing is you say 'Not my will but thine be done,' or 'Not my will, but God's be done.' And 'Please pray for me.' I do it on my way to work.

He and his wife, Ruth Marie, both do it. They pray to their Patron Saint, Saint Jude.

Beltran: Patron saint of difficult things.

Ruthmarie: Impossible.

Beltran: Impossible. Oh you should see the things he has done for us.

When Jim and Ruth Marie got in trouble years ago with the IRS for not paying taxes, he credits Saint Jude for helping him find a bank that would loan money to him, to start paying off his debts. After he lost a job and was eating nothing but top ramen and hot dogs, he won $19,000 at Keno. He thanks Saint Jude for that.

Beltran: And you're not praying for money. You're just, you're praying

Ruthmarie: For help.

Beltran: For help.

Jim's home from a frustrating day of work- the Las Vegas airport was so dead today, he only did one shuttle run, and made $40. It's been like that for months now. But Jim doesn't want to talk about it. He wants to show me some things around the house.

He takes some framed photos off a table.

Beltran: This is my father, when he came over from the Philippines. He was in his early twenties.

He looks down at the black and white picture of a young man with dark hair, smiling, sitting on a front stoop.

Beltran: He came from the Philippines to become an engineer, could never get the type of jobs commensurate with his education, retired, basically a good word for it being maintenance man. He was a janitor.

But, Jim says, his parents worked hard, saved money, took some financial risks that paid off, and bought their own home. They lived the American Dream.

Beltran: Now lemme show you something. [Door opening]

Jim opens the door into his garage.

Beltran: See that car over there..

Behind a stacks of boxes, an old car is sitting on blocks. It was Jim's dad's. Jim inherited it when he died.

Beltran: That's worth $20,000 now. It's a 1948 dodge. And that's how I look at this house. I want to pass on what I have to my kids.

[Sound of television]

Steve: Hey how's it going?

That night, while Jim and Ruthmarie are watching TV, the guy who lives across the street comes over for a visit. His name is Steve. He asks me not to use his last name. He's embarrassed. He's been out of work for almost a year. He and his wife and kids are struggling to keep their house, too. Now and then Steve drops by his neighbors to ask for help with a utility bill.

Steve: We are looking at welfare right now to see if we qualify for food stamps, to make it easier, borrowing money from our neighbors, and not being able to pay it back.

Steve looks at Jim, and Jim shrugs.

Steve: So, yeah, it's rough.

Ruthmarie hands them both some lemonade. Until recently, Steve was a mortgage broker. He sold home loans to people like Jim and Ruthmarie.

Steve: I knew nothing about the loan business. I was in construction my whole life, growing up with my dad. And I walked into my friend's office, he's a broker, in my construction clothes, and I said 'Give me a job. I want to do this.' He was making lots of money. He was making about $40,000 a month. And I couldn't believe that this guy that I knew that used to do construction was now making this kind of money. I said 'Why can't I make this kind of money?' He said 'You can. For two weeks, I'll give you a crash course, and then after that, it's sink or swim.' And that's exactly what he did. And I couldn't believe how easy it was.

Steve made $100,000 his first year. He insists he never gave a loan to someone he didn't think could afford one.

Steve: That was just the way I was taught. I worked with some good people and they were honest, and ah...there were people in our office that were sharks. And they really made a lot of money, but they probably made a lot of people unhappy.

And Steve is in the same boat as a lot of those unhappy people now that his mortgage business has gone belly up.

Steve: I made a crap load of money really fast. Well, not a crap load, but more money than I was used to making. And like a fool, I upgraded like people do. I spent money. You want to do better for your family, so you buy a bigger house, or you buy a new car or you do that. So I bought a new house, I bought a couple cars, and everything was fine for a couple of years. And then when things started to get tight, I kept thinking it's going to get better, it's going to get better, and it just got worse and worse and worse.

Steve is trying to find another job now, doing what he used to do, construction. But with the collapsing housing market, the construction business has ground to a halt too. His wife got a job at Trader Joe's, but it doesn't pay very much. They're more than eight months behind on their mortgage. He says his family has cut back in every way they can think of. They give themselves one night of fun a week, where they rent a video and make popcorn. That's it.

I go across the street, and Steve shows me his house. While we're standing in his garage, I ask him what he hopes other people might learn from his experience.

Steve: I hope people learn to how to use their money properly, how to save their frickin' money. Cuz, when you have none, and you're forced to swallow your pride, and ask to borrow, or you're selling stuff you'd never sell, or.

He looks off into the distance for a sec.

Steve: I mean I play guitar, and playing guitar is like my life. And I have pawned or sold all of my equipment, all of my guitars, except for one, I have one left, and I won't get rid of it, I hope, but.

Before I leave, I ask Steve to play me some of his music. He thinks about it, almost agrees to, and then says no. He's out of practice. And one of his guitar strings is broken anyway. But a few weeks later, he sends me this recording he made, of his music.

Stephen Smith: This is Stephen Smith. You're listening to "Foreclosure City". Coming up:

Jody Mobley: Why at this point in your life, why are you buying a house? Why do you want to become a homeowner?

To learn more about the foreclosure crisis in Las Vegas, and about what help there is for people caught up in the problem, visit our Web site at You can download this and other American RadioWorks programs and subscribe to our podcast. That's at

"Foreclosure City" is supported by the Northwest Area Foundation Fund of the Minneapolis Foundation. Our program continues in just a moment, from American Public Media.

Smith: [Driving in a car] From American Public Media, this is an American RadioWorks documentary, "Foreclosure City." I'm Stephen Smith.

And, driving the car here in Las Vegas is producer Krissy Clark.

Clark: Yes, and I'm going to pull over right here. [Car engine stops]

Smith: So we've just pulled up to a gated subdivision just outside Las Vegas.

Clark: This is called San Niccolo, and it's one of the newest suburbs of Las Vegas. It's also one of the most foreclosed.

Smith: We're in Las Vegas because it's kind of become the unofficial capital for the country's foreclosure crisis. It's had one of the nation's highest rates of foreclosure for the last two years, and along with it, one of the highest rates of unemployment. But until recently, Las Vegas was actually known for a very different set of distinctions: it was the fastest growing city in the country, four times the economic growth of anywhere else in America. It had lots of jobs and relatively cheap housing, so people were flooding here from all over the U.S. Las Vegas seemed like one of the few places left where a poor or working class family could own its own home, and pass that wealth along to its children.

Clark: Right, and so far in this program, we've been talking about two things: people who bought more house than they could afford, and people who took a bunch of equity out of their house, and used it as the saying goes 'like an ATM machine.' But here at San Niccolo there are other kinds of stories, including people who felt they did everything right.

[Sound of dialing numbers at a call box]

People like Karen Lewis: A white collar professional, with a steady job, and a degree in accounting.

Karen Lewis: Hello?

Clark: Hi is this Karen?

Lewis: Yes.

Clark: Hi it's krissy.

The first time I visit Karen, in March of last year, I have to dial her up at this call box.

Lewis: Ok I'll press you in, hold on.

And wait to be let inside the wrought iron gate.

Gate Recording: Access granted. Please enter.

This gate means a lot to Karen, and the neighborhood. It helped give the new, Spanish style homes here a sense of security and distance from the problems of the outside world, and a few years ago, price tags of a half million dollars.

Clark: And the gates are swinging open.

At least that's how the gate was supposed to work. When I meet Karen, she's relieved that the gate is even opening. She says one night in the summer of 2007 that became the exception, not the rule.

Lewis: I came home one night: the gate was broken.

Some kids had rammed through the gate to get to a raging party next door to Karen's house. They were racing up and down the block in jacked up trucks.

Lewis: There were all these cars lined up and down the street, tons of beer cans, music, kids wandering up and down. We called security, they broke the party up, but I thought, you know I paid how much money for this house, and I felt like I'm living in a college town.

Around the same time, two trucks also started bashing though the gate. They were coming in to repossess residents' cars. And someone else had broken in to the neighborhood and slashed some tires, stolen some purses.

Lewis: [Sighs] It's definitely not the family neighborhood that I expected.

Karen's family moved to San Niccolo three years ago. They'd sold a house in San Diego for $200,000 more than they paid.

They were like many of the new residents who poured into Las Vegas back then. They were equity refugees, in search of a place where the money they made off the real estate boom in California would go farther.

They bought a five-bedroom, three and a half bath, hacienda style house with high ceilings and granite-countertops. It had a dramatic view of the mountains, and it was next to a golf course.

Lewis: Sort of my dream house, in a way. More so than what we'd been able to afford in California.

It cost them $435,000. They put down the $200,000 they made on their San Diego house, and were left with a mortgage they could easily manage. They both had good jobs. She was a business consultant. He was a chemical engineer.

Karen says she had a certain version of success in mind here, one that involved living next to other young professional families with nice cars, and well-tended yards.

Lewis: Given the price range of the house, we're going to have people that, if they're going to spend that kind of money, there's going to be a pride of ownership. I like the fact that there's a golf course and a private country club in the neighborhood. I'm not a member, but it's nice being associated with a bit of exclusivity. [laughs]

That's not what San Niccolo is associated with now. To understand what happened to Karen's neighborhood, you need to know a bit about housing speculation, a popular pass time during the Las Vegas boom. When Karen's' family was buying their house, so were small-time speculators -- two and three houses at a time. The places were selling like hotcakes, or another substance, as Butch Cody puts it. He's Karen's neighbor.

Cody: Wow, it was like, who needs to be a drug dealer when you can buy real estate in Las Vegas. Not that I sell drugs.

Actually, Butch is a hairdresser. He bought three houses in the neighborhood, with adjustable-rate mortgages, and planned to flip them for a quick profit. That was back when Real estate prices seemed like they could go nowhere but up, and loans were easy to get without down payments, or proof of income.

Now that his monthly rates have increased, Butch can't afford his houses anymore. He stopped paying the mortgage on the one he lives in January. He guesses the bank will get around to seizing it in the next few months.

Cooper Lewis: There's an empty.

Lewis: It might still be empty.

Cooper: Nobody's in there.

Lewis: Oh really?

Karen Lewis and her four year old son Cooper walk around their neighborhood on a windy spring day.

Twenty of the 214 homes in San Niccolo are in foreclosure. That's about 11 percent. That's much higher than the national average-which is under 2. But it's places like San Niccolo-where so many people defaulted on their mortgages all at once-that are at the root of the global financial meltdown. When banks wound up with all these bad loans on their hands, they started seizing up on credit and lending, and things started to spiral down from there.

Cooper: [singing] It's an empty house, I found one, I found one!

Each empty house in San Niccolo has played a tiny role in that larger economic drama

Lewis: That's probably a foreclosure, but i'm not sure. If you see the lawn's dead.

A dead lawn is a tell-tale sign of a soon-to-be foreclosed house. Cooper is proud that he's found one.

Cooper: [still singing] It's an empty house, I found one!

Clark: Do you know what foreclosure means?

Cooper: Not living in a house.

Clark: Do you have friends at school who have foreclosures?

Cooper: Some friends.

Lewis: I didn't realized he realized. You knew that?

Cooper: Oh god!

But it's not just foreclosures that are affecting Karen's neighborhood. With the sagging market, speculators who've avoided foreclosure still can't sell their houses like they'd planned. So they're renting them out, instead. Houses designed for single-families, are being rented to college kids, like the ones who broke the gate, or multiple families at a time.

Lewis: On the corner we believe it's a half way house. There are about six cars. They don't say hi.

[knocking on door]

Later, I go to the house that Karen thinks is a half-way house.

Clark: Hi, I'm krissy. I'm a i reporter.

Georgina Simmons: Shhh!

Clark: Oh, sorry!

An older woman and a little girl crack the door open.

Simmons: Everybody's sleeping.

Clark: Sorry about that.

Simmons: Yeah, everybody work in the night time.

Clark: Oh, where do they work?

Simmons: They are taxi drivers.

Topaz Simmons: They work graveyard.

The woman's name is Georgina Simmons and the girl is her grand daughter, Topaz. They tell me they started renting this house in 2007, right when the real estate bubble burst in Las Vegas.

Simmons: Yeah because we have more rooms here and we are more together. And we're going to buy the house.

Clark: You're going to buy the house?

Simmons: Yeah, we really like the neighborhood.

Clark: How many people live here?

Topaz: Nine.

Simmons: No.

Topaz: Yes.

Simmons: [In Spanish] Calla te!

Clark: That's ok.

Simmons: Seven.

Clark: Seven?

Topaz: Oops.

The gate around San Niccolo was supposed to keep out this sort of stuff: houses crammed with people, renters without much money. Karen Lewis moved here because it was exclusive, and frankly these were the sorts of situations she'd wanted to exclude. But she says she's realizing, slowly, that the changes to her neighborhood haven't been all bad.

Lewis: There were some biases that I had that I didn't realize. You sort of stereotype people. Like the neighbor next to me, they have a detailing business. So they would actually have their customers come to their house, and they would clean the cars, and they would have music playing, and they be sitting out in their lawn chairs, drinking beer, and talking to their friends in the middle of a Saturday afternoon. I didn't expect to have that kind of traffic in my street. But, they are awesome neighbors. T hey're the ones that slow down when they see a kid.

And Karen says they probably came here for the same reason she did: [music] to live their dreams.

Lewis: That looks like new grass. Looks like there are new trees. The lawn isn't dead.

This winter, in late February, I visit Karen Lewis again, and we go for another walk through her neighborhood. Her house has depreciated almost $200,000 now, and she owes more on it than it's worth. Still, she's trying to be positive.

Sure, there are even more foreclosures on her street, but people are buying some of them now, too. We pass a house with a sign that says bank-owned in the window. All the lights are on. The front door is wide open. There are two cars parked in the driveway.

Lewis: You know this feels like a realtor situation right now. This house is in foreclosure.

Karen's eyes light up. She heads to the door.

[knock knock]

A realtor is showing the place to a young couple. Potential new neighbors!

[A beeping sound starts in the background]

And notice the beep of the smoke alarm with the dead batteries in the background. We're in Foreclosure City after all. Karen introduces herself.

Lewis: I live in 3483 [beep] so I live on the street with all these wonderful foreclosures.

Prospective Buyer: When did you buy?

Lewis: I bought in... almost three years ago.

It's a buyers market. And this would be the couple's first house. They've looked at twenty this weekend. The wife checks out the upstairs closets. The husband wants to know how good a deal this place really is.

Prospective Buyer: Uh...How much? Well, I don't want to .

Lewis: It's ok, I have no shame... I paid 435,000. If this is 240, it's a steal. [laughs] Sorry!

Karen is happy to talk the place up.

Lewis: I have a four year old son, this is a great neighborhood...OK. I just don't like the foreclosures. That's why, I mean I have a vested interest, I need you guys to move in, and help the houses appreciate back to what the potential is going to be.

Realtor: Oh it will bounce back without a doubt.

Lewis: Good you're making me feel better! [laughs]

Karen offers to let the couple see her house, for comparison, but they politely decline. They look a little overwhelmed by her enthusiasm. She wishes them good luck. On our way back to Karen's house, she worries whether she, and the neighborhood, have made a good impression on the couple.

Lewis: I don't know. They're probably like the rest of us, just sort of waiting it out to see what happens. Is it going to turn into what we would hope, and what the potential seems to be, or is it just a dream? You know?

[Sound of key in lock, door opening]

But when Karen gets home, she has a confession to make. As much as she wants people to move in to her neighborhood, she's thinking of moving out. She and her husband recently got a divorce, so she's got to pay the mortgage by herself now. She's having trouble finding work as a business consultant in Las Vegas. And even though she can still make her house payments so far, she catches herself playing out worst-case scenarios in her head, late at night, and wondering what happened.

Lewis: I wasn't A speculator. I didn't reach for a house I couldn't afford. It's like, where did I screw up? To have this house be who I am... eventually I'll lose my job. I'm already struggling. I'll be in foreclosure, and I'll have the shame of having horrible credit. I don't want my kid to see that.

The next time I talk to Karen, she and her son have moved. She's renting out her house in Las Vegas to someone. And she's living in a place less than half its size, in Pennsylvania, where she grew up.


Jody Mobley: So would anyone like to share? Why at this point in your life, why are you buying a house? Why do you want to become a homeowner?

Student 1: Kids.

Student 2: Kids.

Student 3: Kids

Student 1: Families grow larger.

There's still another group of folks who live in Foreclosure City.

Student 4: Investment. To have something in the future for your familiy.

The ones who never owned a home or had a mortgage in the first place. But now, since real estate is so cheap, it's a perfect time for them to buy.

Student 5: Now it seems cheaper to buy than to rent.

Which is why it's so hard to get a seat at this First Time Homebuyers Workshop. It's sponsored by the same non-profit that counsels people facing foreclosure. Jody Mobley is the teacher.

Mobley: You guys, going in, you're going to know better. And you're not going to make the same mistakes that the people that are at risk right now, the mistakes that they made.

At the lunch break, one of the students, Norma Thompson, says she was tempted to buy a house a few years ago. But, she's a customer service operator at a pharmaceutical company, and with her salary, she didn't think she could afford it. Now that prices have dropped so much, she thinks she can.

Thompson: It's scary but it's a risk I'm willing to take. I've been renting all my life. I won't something of my own.

Bernice Ellis: Same here.

Bernice Ellis is a retired secretary.

Ellis: Right now we're renting a house, and what you're paying for the house, you may as well pay something and at least have it yourself.

Frankie Rodriguez: I'm 38, and I haven't bought me a house never.

Frankie Rodriguez is a bouncer at a night club. He's here with his sister. He says they have friends who've recently lost their homes, but he has a plan to avoid that.

Rodriguez: You got to have discipline. And you've got to be focused on your goals. I mean, this is my opinion on why people do lose their houses. People like to live out of their means. You can't have Moet tastes on a beer budget, you know what I mean?

That's pretty much the answer I get from everyone. They say: I know better. It will work out for me. It's a risk I'm willing to take.

[Sound of casino slot machines and a trumpet playing the opening fanfare of a televised horse race]

This is a story about Foreclosure City, but it's also a story about Las Vegas, so of course at some point we needed to stop at a Casino. We waited until the end.

Jim Beltran, the shuttle bus driver, and his wife Ruthmarie like to do a little gambling, even though money is tight for them. Jim likes to bet on the ponies.

Beltran: You try to look for a horse that improves. This one's a question mark. He's never run.

It would be too glib to say that the gambling economy that fuels this city somehow fueled its residents house-buying habits too. But there are parallels between what happens in Las Vegas casinos, and what happened in Las Vegas, and a lot of America, during the housing bubble.

Any investment carries risk, even one that seems as secure as an investment in a house that you can afford. Buying a house is supposed to be a prudent, adult thing to do. It's a big part of the American Dream.

But, like gambling, there's always a risk. There are calculated risks, and foolish ones. It's just that it can be hard to know the difference until you win or lose.

Horse Race Announcer on TV: And here they go!

Beltran: Come on Two!

Jim puts $30 on horse number two.

Beltran: Oh! Oh! My horse is out of it! He got hit by another horse!

It comes in last.

Beltran: Oh well.

And Jim decides he won't bet on anything else for the night.

Betlran: That's it. That's how the money went. Thirty bucks, which I shouldn't have done. But I did. That's my limit. Now all I'll be doing is chasing bad money.

As for the bet they placed on their house, Jim and his wife still don't know what will come of that one. The last time I spoke to Jim, his mortgage company had lost the paper work he'd submitted for a loan modification. He's had to start the process all over again.

In March, the Beltran's interest rate jumped up. And they're finally talking about giving up the house, letting it go into foreclosure. They might move in to a rental. But, before their credit is ruined, they hope they can find a way to buy a new house.


Stephen Smith: I'm Stephen Smith. And you've been listening to Foreclosure City.

If Jim and Ruthmarie do buy a new house, they may be able to find an incredible deal. Because of the foreclosure crisis, there are cheap houses all over Las Vegas now. They're attracting investors and first-time buyers like the people who looked at the house in Karen Lewis's neighborhood.

In fact, some economists worry that bargain hunting could fuel another housing bubble. We're still facing that same equation -- the need to balance risk and prudence. It'll be good for the economy if consumers regain some confidence. But not too much confidence. If we take some risks again. But not too many risks. If we want the good life. But not so fast that we bet it all, and lose it.

Foreclosure City was produced by Krissy Clark, and edited by Catherine Winter. The American RadioWorks team includes Kate Moos, Marc Sanchez, Ellen Guettler, Ochen Kaylan, Chris Farrell, Suzanne Pekow, and Craig Thorsen.

To see photographs of othe scene in Las Vegas before and after the wave of foreclosures, visit our website, There, you can listen to this program again, and sign up for our newsletter and our podcast. We also have a collection of other documentaries about this economic crisis that might interest you, so go to

Foreclosure City is supported by the Northwest Area Foundation Fund of the Minneapolis Foundation.

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