which is good for business. because planes use less fuel, spend less time on the ground and more time in the air. suddenly, faraway places don't seem so...far away. ♪ arrival. with hertz gold plus rewards, you skip the counters, the lines, and the paperwork. zap. it's our fastest and easiest way to get you into your car. it's just another way you'll be traveling at the speed of hertz. [ticking] >> one of the threats from the great recession was the sudden surge in the number of abandoned houses. vacant homes have become so ruinous to some neighborhoods that one city, cleveland, decided it had to find a solution. perfectly good homes... once worth $75,000 and $100,000 or more... are being ripped to splinters in cleveland. [ticking] the new manned space program rocket was supposed to be called constellation. >> mm-hmm. >> and now you guys call it-- >> all: cancellation. >> unfortunately. >> they had been counting on a new space program in brevard county, florida, for years, but it didn't happen. >> and liftoff. the final liftoff of atlantis. >> and after the last space shuttle mission touched down... >> this is a matter of national pride. >> things around the kennedy space center changed in a way that may surprise you. [ticking] >> inside, you feel like a part of you has been ripped out from losing a job. >> 1/3 of the unemployed have been out of work for more than a year. it's been hard on them and the economy, but we found an experiment in retraining... [paper tears] >> the resume, very soon, will become an obsolete tool in the job-search process. >> that may just offer a way back. you just got a new job. >> yes, i did. brings a smile to my face. >> i see that. >> welcome to 60 minutes on cnbc. i'm bob simon. in this edition, we look at two innovative experiments in the housing and job markets aimed at solving long-term problems caused by the great recession. and later on, we examine the impact on brevard county, florida, of scuttling the space shuttle program. we begin with the housing industry. chances are the home you're in isn't worth what it used to be. you may not have indulged in the real estate bubble with its liars' loans and wall street greed, but you were stuck with the bill. and if you thought your home value couldn't drop any more, have a look up and down the block. you might say, "there goes the neighborhood." one of the threats from the great recession was the sudden surge in the number of abandoned houses. as scott pelley reported in december 2011, vacant homes become so ruinous in some neighborhoods that one city, cleveland, decided it had to find a solution. >> perfectly good homes... worth $75,000, $100,000 or more a couple of years ago... are being ripped to splinters in cleveland, cuyahoga county, ohio. here, the great recession left 1/5 of all houses vacant. the owners walked away because they couldn't or wouldn't keep paying on a mortgage debt that can be twice the value of the home. cleveland waited four years for home values to recover, but in 2011, they decided to face facts and bury the dead. why destroy them? jim rokakis, a former county treasurer, showed us. >> we're looking at a neighborhood that has almost as many vacant houses awaiting demolition as there are houses with people living in them. we have one here. one here. one there. >> rokakis is leading the effort to tear down thousands of abandoned homes because they're rotting their neighborhoods from the inside out. it often starts, he told us, when a vacant house becomes an open house to thieves. it's a nice house from the roof to about here. and then down here, it's been ripped to pieces. what's going on? >> well, this is typical, because this is as high as they could reach without using ladders. they've ripped off the aluminum siding, which you'll see on most of these houses. the aluminum and the vinyl siding comes off. it's getting about a buck a pound. >> essentially, foreclosure scavengers have been through here. >> the thieves have gone high-tech. they know when evictions are occurring 'cause they're posted online. and they will follow the sheriff. they're usually there that afternoon or that evening. so in here, what you're gonna see-- well, i guess they took everything, including the proverbial kitchen sink, right? the sink is gone. the plumbing is gone in this house. all the copper, anything metal that had value is gone. the furnace is gone. >> the light fixture... >> light fixture came out-- >> is gone. how often is this happening in cleveland? >> this happens every day. and the foreclosure crisis creates this spiral, because as a result of this, people are now more likely to leave neighborhoods like this, and as they leave, the scavengers come in and do the same thing to the house next door or across the street. >> to make the house next door worth more instead of less, vacant land created by demolition is often given to the neighbors and sometimes turned into fields or gardens. cleveland and cuyahoga county believe that only by turning the failures of the great recession into green space can they stabilize the value of what's left. otherwise, the scourge would keep spreading. when you see a house that the scavengers have torn apart like this one, what does it do to the guy next door? >> it clearly makes his house worth a lot less money, because when you've got four, five, six vacant houses on a street like this, your house isn't worth a percentage less; it's just worthless. >> it's probably worth about $30. [laughs] i mean, seriously. who knows? it's sad. it's really sad. >> roberta bryant lives at the end of the street in a house made essentially worthless by her vacant neighbors. do you think, in this neighborhood, you could even sell this house if you wanted to? >> no. i don't think anybody would buy it. are you interested? [laughs] >> i don't live in cleveland. >> well, this could be your summer home. >> in theory, there shouldn't be this many abandoned houses. when homeowners walk away, the bank is supposed to take responsibility. but one little-known feature of the great recession is that many banks are walking away too, unwilling to maintain a house whose value has crashed. >> very often a bank will take a property to the point of foreclosure but won't go to sheriff's sale, 'cause they don't want that property. they don't want the responsibility, the $8,000 to $10,000 bill that comes with tearing this house down. >> former county treasurer jim rokakis says some banks have turned their backs on a blight they created. >> well, in a normal real estate market, people are out looking for loans. in the perverse real estate market we created in this country, you know, during the period--2000, 2006-- this wasn't people looking for money; this was money looking for people. and that's why so many of those loans were made without down payments and without verification of income, and i might also add, phony appraisals. >> and this is the result. >> this is the result. and it's not just here. it's all over america. [ticking] >> coming up, looking for a bank bailout. >> you're gonna have to write down principal balances, because if you don't write down the principal to something that's more realistic, it just guarantees that more people will walk away and more people will default. >> banks and the foreclosure crisis when 60 minutes on cnbc returns. 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[ticking] >> all over america, 11 million homeowners owe more than their house is worth. they're said to be underwater. and the truth is, more neighborhoods would collapse if it weren't for people like linda bizzelle, who refuses to walk away from her mortgage even though it might be best. >> the mortgage company called me and said that i was getting ready to go into foreclosure. so i mailed a payment in that day, and it was the last of my savings. >> that you sent in on this mortgage that's underwater? >> oh, yeah. >> her house is worth $50,000, and she owes $100,000. a financial planner might tell her to put something away for retirement rather than pay a mortgage that will never recover, especially since she lost her job in nursing. what have you been cutting back on? >> sometimes food. i would go to the food bank in order to make up the difference so that i wouldn't be completely hungry. sometimes i wouldn't get my medications renewed. i take medication for high blood pressure. and my doctor could always tell when i didn't take them, and he said, "oh, no. you can't do that. no, no." >> you're living on unemployment right now? >> yes. >> what about the next mortgage payment? >> i'm gonna pray. that's the best i can do. i'm gonna pray that i find a job. >> when you think of it, her neighbors' home values are being propped up by linda bizzelle's fragile grip on the american dream. we found a lot of people spending their last dollar to keep their homes and therefore save their neighborhood. gina bruno owes $50,000 more than her home is worth, and her dream house has turned into a money pit. >> the gas line needed to be replaced. the sewer line needed to be replaced. the plumbing was bad. the roof was leaking. >> do you have any savings? >> no. no. no. >> so you're living paycheck to paycheck? >> absolutely. >> writing checks to the contractors and to the bank. >> yep. i used to go out with friends and have dinner, and i just-- i don't do any of those things anymore. >> a few miles away, beverly anderson and her neighbors are the only thing standing between their neighborhood and utter ruin. for them, paying the mortgage is a matter of principle. >> that's just how i was raised. once you, you know-- you sign it, it's a contract. you uphold what you can for as long as you can. >> these folks bought the first homes in what was supposed to be a 100-house development outside cleveland called cinema park. but the developer went broke in the recession, leaving just six occupied homes surrounded by empty acres, roads to nowhere, and fireplugs with nothing to protect. >> immediately when the boards went up, all of our mortgages went underwater-- our hopes, our dreams, our savings. >> norma scott's predicament is typical around this table. $200,000 mortgage, $100,000 house. still, all but one of these neighbors plan to keep on paying, including high school teacher monica hubbard. >> because i signed on the line. i made a promise. i made a commitment, and i can still afford it, basically. >> you know, there are lots of people all over the country, many thousands of people who are mailing the keys to the bank and walking away. they can't figure out how it makes sense to put more money into a mortgage that's underwater. >> can't speak for them. i can only speak for me. and my reputation that i have to uphold. >> your signature means something. >> it does. it does. >> norma scott is the only one throwing in the towel. she stopped paying her mortgage when she got breast cancer and had to stop working for a while. >> i made the mortgage payments for as long as i could. and then the money just ran out. >> and then they sent you a letter last christmas eve. >> yes, and foreclosed on my property. >> it seems to me that you're living day-to-day, waiting for a telephone call or a letter from the sheriff. >> from the sheriff. >> the cuyahoga county sheriff is doing 50 evictions a month. >> mr. waple. okay, unfortunately, you know why we're here. the eviction? >> chris waple owned a restaurant, but when it went under, he couldn't make his mortgage payments, and so waple and his family were evicted from the house that he'd lived in for 23 years. he'd raised five children here. that was more than three months ago that chris waple left this house, and it's still vacant. there's not a "for sale" sign in front of it, because the realtors tell us that if there are too many "for sale" signs in one block, it makes everything harder to sell. just four doors down, graham jarvis learned that the hard way. his house has been on the market six months, but only six people have taken a look. next door, jennifer wylie has seen the value of her home drop 50%. you can't see it in this neighborhood because they're keeping up appearances, but 1/4 of the houses here have been emptied by foreclosure. and on this handsome block in well-to-do cleveland heights, at least four vacant homes are scheduled for demolition. former county treasurer jim rokakis says banks could stop the wrecking crews if they would only reduce the loan balances on underwater mortgages. >> you're gonna have to write down principal balances. because if you don't write down the principal to something that's more realistic, it just guarantees that more people will walk away and more people will default. >> look, you're asking the banks to write down the principal on these houses, to take losses in the millions if not billions of dollars. >> oh, hundreds of billions. >> why would they do that? >> aren't you better off-- oh, let's say on a $150,000 mortgage-- preserving $75,000 in value as opposed to letting that house go vacant, possibly seeing the house vandalized and dropped to a value well below that? i mean, they helped to cause this mess. and it's not gonna fix itself without their cooperation. >> cuyahoga county ripped down 1,000 homes this year, and they have 20,000 more to go. that'll cost about $150 million. all that's keeping other neighborhoods from the same fate are those 11 million underwater homeowners like linda bizzelle who stubbornly refuse to walk away. >> i want to keep my home. you know, when you've worked all your life... to get the american dream, you don't want to just walk away. you don't want to do that. you do whatever it takes to keep what you have. >> in response to our story, 60 minutes viewers were so moved by linda bizzelle's story that their donations helped stop foreclosure proceedings on her home. and as of october 2012, she was still living in her house. [ticking] coming up, the space shuttle's hard landing. >> what did seeing the last shuttle launch mean to you? >> i felt anger. >> anger? >> oh, yeah. because this does not have to be the last launch. it doesn't have to end this way. i mean, it-- it just doesn't make any sense. it doesn't compute. >> and later, we look at the stigma of long-term unemployment. >> what have the last three years been like for you? >> you have those moments, you know, where you're the only one in the house, and you're sitting in front of the computer looking for a job, and you go, "when is this ever gonna break for me?" >> that's ahead when 60 minutes on cnbc returns. 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[ticking] >> in 2010, president obama canceled nasa's plan to replace the space shuttle in favor of a more modest program. and then congress slashed the funding for that. with the end of an era, 60 minutes wondered what would happen to the generation that put america in space. when the smoke cleared from the last space shuttle launch, we stayed behind in brevard county, florida, the home of the kennedy space center. what comes after reaching for the stars? as scott pelley reported in april 2012, for many in brevard county, the answer was a hard landing. >> all three engines up and burning. >> there was nothing like it in the world. >> and liftoff. the final liftoff of atlantis. >> arguably the greatest engineering achievement of man. at liftoff, it weighed 4 1/2 million pounds, its top speed 17,000 miles an hour. >> the space shuttle spreads its wings one final time for the start of a sentimental journey into history. >> it was built by the hands of people like lou hanna. >> it was the experience and the job of a lifetime. i was working on the pad one day with a friend of mine, and he's a crane operator too. and i ask him--i said... "how many other crane operators do you suppose that there are doing what we're doing? there's two--you and me." >> shuttle work wasn't just work. there was enormous pride in doing for america what no other workers in the world could even dare. lou hanna manned a gigantic crane that cleared the platform before launch. he worked on the first shuttle in 1981... >> america's first space shuttle. >> and the last, 135 missions later. what did seeing the last shuttle launch mean to you? >> i felt anger. >> anger? >> oh, yeah. because this does not have to be the last launch. it doesn't have to end this way. i mean, it-- it just doesn't make any sense. it doesn't compute. and i guess i'm still in denial, because i'm thinking they're gonna call me back one day. "we got a launch coming up. we need your help." how can they do that? >> they did it to save $3 billion a year. at the kennedy space center, 7,000 workers lost their jobs. >> main gear touchdown. the space shuttle pulls into port for the last time. >> 50 years of liftoffs are becoming 8 months of layoffs. have a look around brevard county. it's shrinking. lots of people are moving away, taking businesses down with them. >> it was like, bam, gone. gone. gone. >> the work ethic that built the shuttle keeps chris milner fighting to hang on. >> how long did you work at the space center? >> eight years. >> and your wife? >> 29 years. >> both laid off? >> both laid off. >> in the spirit of an entrepreneur, milner planned for the layoffs. he launched a landscape business on the side, and then he added a sign shop in this industrial park. still, there was one thing he didn't plan on. >> seafood--it's gone. yeah, there's nothing there. edwards exterminating is the only one that's left. it's right around the corner. but basically, everything's empty. it's a nightmare. everybody that's been laid off-- it's a ripple effect. businesses closing down-- it affects everybody else, and it affects me. >> the 7,000 layoffs at the space center triggered 7,000 more in the community. unemployment has been close to 11%. >> people are moving away. people are going up north. nothing's happening here. i know people that moved all the way to seattle for a job. left their house. left the key in the front door. "here you go." it's gone. >> milner had 12 employees