GWEN IFILL: Finally tonight, we kick off our spotlight series in Florida this week with a focus on how the rippling economic downturn has affected attitudes toward government -- one of the most visible signs of distress, Florida ranks third in the nation in the number of home foreclosures.
NewsHour economics correspondent Paul Solman reports on winners and losers: the people who have lost their homes, and the buyers who are snapping them up.
The story is part of his ongoing reporting on making sense of financial news.
MAN: All right, let's start loading the bus.
PAUL SOLMAN: The foreclosures-R-us tour in Cape Coral on Southern Florida's west coast, ground zero of the state's spectacular real estate crash.
MARC JOSEPH, realtor: A lot of you that studied in school probably know this is something like a bell curve. December of '05, up here, we hit $322,000 as the average median sales price. Since December '05, it came straight down. For the entire last year, we have been hovering at a leveling off of between $85,000 and $90,000 over the entire last year.
PAUL SOLMAN: Marc Joseph is the salesman in charge -- the passengers, soon-to-be-retirees and investors looking for a bargain.
MARC JOSEPH: This is golf access. And this is in the southwest section of Cape Coral. I will tell you how about it when we get in the house. Please watch your step exiting.
PAUL SOLMAN: First house, on the Gulf of Mexico built in 2006, sold within months for $491,000.
MARC JOSEPH: It's back on the market for $261,000. That's 53 cents on the last mortgage price. Feel free to walk around.
PAUL SOLMAN: Free, they felt. Walk around, they did.
And English investor Lewis Janes, at least, liked what he saw, at a discount of nearly 50 percent.
LEWIS JANES, investor: This looks in a lot better condition than a lot of the places I have seen.
PAUL SOLMAN: So, how many places do you have in England?
LEWIS JANES: Mid-20s. I'm looking to buy some places over here now, because it's better weather. And I think there's a lot of opportunity.
MARC JOSEPH: So, if you're questioning if it's the right time to buy, it is definitely the right time to buy. You need to look at the numbers, look at the stats. And, for those of you that like numbers, numbers don't lie. The proof is right here. The front page of the real estate section, "Rental market red-hot," guys. I'm not making this stuff up. You can rent your house out.
PAUL SOLMAN: On tour, it's easy to forget the grim reality, however: behind many a bargain a backstory of despair.
Jason Welsh is a golf pro originally from Pennsylvania.
JASON WELSH, golf professional: This is the living area here. You have got the great room setup with the dining room, kitchen.
PAUL SOLMAN: Welsh bought this house 10 years ago for a little over $100,000.
Two kids live in this room, or...
JASON WELSH: Two kids in this room.
This is somewhat of a distressed property. It wasn't perfect. But, you know, it needed a little TLC.
PAUL SOLMAN: And needed more than a little fixer-upper refinancing.
JASON WELSH: You see, we put in, they call it (INAUDIBLE). It's a type of almost marble stone.
PAUL SOLMAN: Five years ago, his equity in the home up several hundred thousand dollars, Welsh put in the pool.
JASON WELSH: Been an utter joy. Like I said, it was a major undertaking.
PAUL SOLMAN: Cost?
JASON WELSH: That was right around $40,000, $42,000 for the pool and the cage.
PAUL SOLMAN: Pushing the total mortgage to $240,000. Soon after, the Cape Coral market began to sink like a stone.
And how much can you get for the house at this point?
JASON WELSH: The comparables, $100,000, maybe $120,000, at most, you know?
PAUL SOLMAN: The comparables being?
JASON WELSH: This one here sold a little less than a year ago for about $55,000. That one sold maybe eight months ago for around $104,000. And the one right here in front of us is empty. There's nobody in there.
PAUL SOLMAN: Welsh says he stopped making payments six months ago, and has tried to renegotiate his mortgage, offering $150,000. The bank said no. Instead, the house will sell to someone else via foreclosure or a short sale, which won't hurt Welsh's credit as much. But the price will be far less than Welsh is offering.
JASON WELSH: I call. I try and get help. They just say I don't qualify. And they're willing to sell it to somebody else for $100,000 out from underneath me.
PAUL SOLMAN: Distressed sellers, bottom-fishing buyers, with federal subsidies, no less, for properties now owned by government agencies like Fannie Mae.
MARC JOSEPH: That particular home, because it's Fannie Mae, if you were to buy something right now, you're actually able to ask for up to 3.5 percent concessions. And that can be for appliances. That can be for closing costs. And that's also an incentive, in addition to this $8,000 tax credit.
Joseph says, the other plus of Fannie Mae and Freddie Mac, which have taken over so many of these homes because they insured the mortgages, is their record of upkeep.
MARC JOSEPH: This particular one is owned by Freddie Mac. They want their pools blue. They want the power on and they want the utilities on. Eighty-five to 90 percent of the other lenders, they just want to churn and burn, and they don't care about the green pool. If it's a government-owned property, they would like to see new carpet in the house. They would like to see the house painted, because we're targeting owner-occupants.
PAUL SOLMAN: Craig and Linda Robinson hail from Illinois.
MAN: We're going to retire in two years. And we're looking for something to come here part-time.
PAUL SOLMAN: Snowbirds?
MAN: Are we hold enough to be snowbirds?
WOMAN: We are.
PAUL SOLMAN: Bill Busby is from my neck of the Northeast, Boston.
BILL BUSBY, resident of Boston: I want to buy a home for myself. And I think Cape Coral has a lot of good deals. And that's why I'm on a tour today.
PAUL SOLMAN: Uh-huh. Might you make an offer on one of the three we have seen so far?
BILL BUSBY: It's quite possible. I'm ready to go.
PAUL SOLMAN: Ready to go means something quite different to Juan Mesa, however, back on the flip side of the foreclosure story, the downside of Marc Joseph's job.
MARC JOSEPH: Juan, the first concern I have, on the wall right here, if I don't take this off the wall, it's going to get thrown away. If it's something you need, I need you to take it now.
PAUL SOLMAN: Laura Negron, Joseph's office, was here to translate.
Mesa bought the home in 2002. Mortgaged for $80,000, it's worth no more than $20,000 today. Mesa can no longer afford the payments, so he's giving up the house...
MAN: OK. Thank you.
MARC JOSEPH: Thank you very much.
PAUL SOLMAN: ... for a $1,500 relocation fee.
MARC JOSEPH: Important that he finishes the rest of the backyard.
This is the part of the job that is tough. It's very tough. The end result is, a man just lost his house after seven or eight years of paying. And somebody new is going to come in and pay $20,000 or $30,000 for it, when he might have stayed if they would have offered him that deal.
PAUL SOLMAN: Instead, Mesa will now be renting a room.
LAURA NEGRON, Florida: He's paying $300 a month.
PAUL SOLMAN: Would that cover a $20,000 purchase?
LAURA NEGRON: Yes, it would, absolutely.
PAUL SOLMAN: While Mesa rounded up his last possessions, we asked Laura Negron how she felt.
LAURA NEGRON: It's kind of intimidating and scary that someone just would offer you $1,500 to get out of your house, your home. It hits home.
PAUL SOLMAN: It hits home because Negron's own mortgage is some $150,000 underwater, and she's in default, hasn't made a payment since June.
LAURA NEGRON: My husband was out of work for eight months. And I was the only one bringing home income. And using the credit cards to basically live and try to make our mortgage payments, we just grew deeper and deeper and deeper into debt.
When we called to get help, they told us that we were probably eligible to get this remodification for a loan. That wasn't the case.
PAUL SOLMAN: Do you feel bad not making the payments?
LAURA NEGRON: Absolutely. I cried every night. I go, how can I not pay these people back? This is my home.
And it's hard.
PAUL SOLMAN: But, finally, you had no choice.
LAURA NEGRON: No. It's been hard. I'm sorry.
PAUL SOLMAN: We're not used to doing interviews that bring tears. But, given the frustrations of the foreclosure crisis in Florida, there was no avoiding them.
JASON WELSH: It's just upsetting that, you know, there's supposed to be help out there, and there is none. You know, Obama says he's going to help. He's doing all this stuff. There is no help. No money is getting to the average person who -- who has credit history for 10 years of paying on a mortgage, and you don't qualify? I don't understand it.
PAUL SOLMAN: The administration has announced a new plan to help underwater homeowners, encouraging those who hold their mortgages to write down the principal due.
MARC JOSEPH: This is going to be the last home we're going to see, three-bedroom, two-bath.
PAUL SOLMAN: Meanwhile, the tours go on.
MARC JOSEPH: It is listed for $76,900, making it 38 cents on the last sales price.
WOMAN: This has been on the market one day. This house will go fast.
PAUL SOLMAN: To an investor, perhaps, or a savvy snowbird, but not to the person who paid $204,500 in 2005, and used to call it home.