The House that IndyMac Built (David Ebner,Tara Perkins & Sinclair Stewart)

LOS ANGELES, TORONTO and NEW YORK — Patricia Ramirez's home, which sits on a ragged dead-end street at the edge of East Los Angeles in the shadow of an elevated freeway, cost $445,000 (U.S.) when she and her husband bought it in February, 2007.

Mrs. Ramirez, an office manager at a tortilla maker, and Mr. Ramirez, a truck driver, together make $48,000 a year. When a relative of theirs bought a house a few years ago, his real estate agent told the Ramirezes they could afford a house too. They had dreamed of owning a home for years, and jumped at the chance, scraping together a $5,000 down payment, or 1 per cent.

{xtypo_quote_right} As painful as this will be for some investors, the size of the bank's holdings aren't large enough to threaten the entire economy. But the replayed image of hundreds of customers, lining up outside IndyMac's branches in a classic run on the bank, just may be. {/xtypo_quote_right} 

They moved into the one-storey, three-bedroom beige house in a working-class neighbourhood that was bid up in value during the boom, because while it's on the edges of the rougher parts of town, it's not too far from downtown or the ocean. A pleasant green cemetery is half a block away and the nearby main streets are colourful, lined by eclectic shops and strolling families, most of whom are Hispanic.

Today, the Ramirez home, with its rusted basketball hoop in the driveway and yellowed lawn, is worth just $360,000 – a drop of 20 per cent in less than a year and a half.

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