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How Stockton, Calif. became nation's foreclosure capital

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    A look the city's fiscal woes and what they say about the economy

  • Duration 3:53
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-- -- in California the unemployment rate is -- -- the national average but that's not all the foreclosure rate is in the nation's top ten.

And there's more are rising crime rate to -- Well that is definitely not an ad from the local chamber of commerce -- the tourism board.

But it is reality in the city of Stockton which filed for bankruptcy last year so what happened to Stockton.

And could happen to your hometown -- Jenkins hit the ground to find out.

-- of the financial crisis that hit five years ago -- cities all across the country.

But never hit harder than this -- -- the foreclosure capital of America Stockton California.

It has a population of roughly 300000.

It is located at eighty miles east of San Francisco there was twice named an all American city.

But today it is the largest city in America to ever file for bankruptcy.

Fighting against -- unemployment rate that exceeds 14%.

A foreclosure rate that ranks it sixth worst in the US and soaring crime that makes it.

The second most dangerous city in California behind Oakland.

So what happened here and why -- what happened here happened in your hometown.

And Johnson it was mayor of Stockton from 2009 until December of 2012.

Her entire term.

Was spent dealing with this crisis -- it -- it accumulation of bad bad choices and bad actions and unknowingly councils gave Cadillac benefits cadillacs salaries.

To employees at the time and there was money.

And secondly there was.

Council and the mayor that wanted to build great infrastructure and they sold bonds to do that lots of bonds at hot at pretty high interest rates.

And it -- then it was a factor is no reserves the city of Stockton didn't have a savings account to speak up and then of course it into put the kibosh on it.

Was see it the collapse of the economy and the housing market here that's what really.

Was the nail on our confidence we don't want any other city in California or nationally to have to go through the angst in the heart break and all of that that you do -- you have to you know go down on this -- the hardest thing in the world for for any of us was to lay people off to reduce.

Health benefits to take away retiree health benefits completely cities.

-- into a trap when they make commitments to public employees.

Or.

When they float bonds you need to understand the true cost of the debt you're incurring.

If you down and its history can just grown grown grown until it crushes you.

There's a lot of other.

Cities and counties nationwide that are wrestling with a lot of the same issues that we have -- the recession basically laid bare.

A creeping cancer that was gonna get many -- sooner or later.

The only question is whether the cities can take quick tough action to reduce their obligations and avert bankruptcy.

Or whether they're gonna go over the -- like -- and -- This is would have been foreclosed homes -- -- -- -- -- -- to -- the notice of vacancies left over flyers materials the yard is badly overgrown.

But you don't see this sign that says foreclosure -- to be in the yard.

In every block here and -- him but it's not anymore because they say it serves as an advertisement for squatters -- criminal.

It's a terrible problem list of people coming into -- vacant foreclosed homes and literally stripping him.

Taking everything -- I mean they weren't ripping the drywall off the walls and taking the -- now in the plumbing and toilets and appliances and -- cabinets -- -- it was horrible.

-- -- is definitely not the only city in this country struggling -- your town doing well one and now so go to Greta are dot com and tell us.

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