REPORTER: Aaron Lewis

This parking lot in Santa Barbara, California, is more than what it seems. It's become a refuge for people who have lost their homes in America's mortgage crisis and now have no choice but to use their cars as a place to sleep at night.


BONNIE: This is basically what I have to sleep in.

Bonnie is 1 of nearly 100 people

BONNIE: Put my legs over there and just sleep right here.

She used to be a successful real estate broker until the mortgage crisis took her job and her two homes worth more than $1 million each.

BONNIE: My home in Topenga had a servants' entrance and a private driveway.

REPORTER: This little 2-bedroom place - two acres?

BONNIE: We had four dogs, sheep, chickens, roosters. That was the house that wouldn't sell and I bought this one without it selling and both houses together were $10,000 a month. I handled the payment for a while.

REPORTER: $1.2 million?

BONNIE: We got an offer, it was a short offer. The bank turned it down. It was 900 and something. That month after they took my house, they accepted a foreclosure offer for almost the same price they turned me down for. They took my home. They didn't have to give me a foreclosure.

Bonnie tries to keep her situation a secret and has asked us not to broadcast her full name. But it's not always possible to hide the truth of where she lives, like the time her car broke down and the mechanic asked to keep it overnight.


BONNIE: I had to tell the man at the place, "You can't keep my car overnight because I sleep in it." That was hard.

REPORTER: That must have been awful. What did he say?

BONNIE: He looked very sad.

Barbara Harvey also lost her job and was evicted from her rented apartment. She moved here, to a beach parking lot, where she's spent the past few months sleeping in her car next to her dogs to keep warm.

BARBARA HARVEY: Ranger would probably sit right here. He would just lie down there. And then Phoebe, she might just lie there, if I'm lucky. But sometimes I didn't get lucky and they had more room back here than I did.

These lots are run by the New Beginnings Foundation. They're a safe place to spend the night for people who have lost everything in the current crisis.

BARBARA HARVEY: I was working as a notary public, notarising signatures on loan documents for people who were refinancing. And that came to a screeching halt really in December of 2007. I think I may have signed one or two loan packages but that was it. And so there wasn't an income.

Entire neighbourhoods in California are becoming ghost towns as families lose their homes, leaving them to face life on the street, often totally unprepared.


BARBARA HARVEY: I had to stay warm. I was shivering so badly that first night that I thought, "Well, now, what I have to do tonight is to be sure that I'm going to be warm." So I retrieved some jackets from storage. I put on an extra sweater and I made sure I was going to be so wrapped up that I wouldn't get cold, and I didn't, I didn't get cold. So we figured that one out.

REPORTER: And the dogs helped?

BARBARA HARVEY: And the dogs helped a lot, yeah, helped tremendously.

REPORTER: You just curled up with them like a blanket?

BARBARA HARVEY: Yeah. I had blankets on me and they were curled up. That was the first night that we were comfortable, well, relatively.


Down the road from where Barbara sleeps, I find Craig Miller living with his wife and two children in a borrowed recreational vehicle. He tells me he was running his own business as a life coach and, when the economy went down, his business went down with it.


CRAIG MILLER: I think what brought me here is once a snowball starts to roll it starts rolling really fast and sometimes the momentum is faster than you expected it to be and then all of a sudden you have this huge catastrophe that you are trying to deal with. Sometimes, if you're not in a hole, you look at the people in the hole and you think, "Why don't they just climb out of it?" But you don't realise that there's a whole other set of issues in the hole. Sometimes it takes a lot of time just to survive.

Miller doesn't blame the banks or the government for where he's ended up. He simply calls this the flipside of American life.


CRAIG MILLER: In America, no-one looks out for you. That's part of our kind of capitalistic thing. Nobody also tells you what to do. So you can go as far as you want to go. But that also means that nobody's got your back, no-one is looking out for you, and so you can go into oblivion and nobody will know.

Nancy Kapp helps to run the safe parking lot program for the New Beginnings Foundation, a homeless outreach organisation.


NANCY KAPP I have women who are living in their vehicle who... One lady is 79 years old. She should be retired and relaxing in a nice place. But she's living in her vehicle and going to the bathroom in a jar at night. This is not the way it's supposed to be. There's something really wrong here.

TOM MATHESON: I love this whole area. I sold the land here.

Real estate broker Tom Matheson does business in Santa Barbara. He knows just how much money there is to be made, and lost, here.


TOM MATHESON: We can go from $800,000 to Montecito, which would be $47 million. That's the price range we have within a 20-minute drive. So you have $800,000 - this is regular residential home, not a condominium - up to $47 million on the beach.

The financial crisis that's rattling America is hitting top-end real estate as well - millions in property value lost overnight.


TOM MATHESON: There's been properties that have been offered at $28 million sold for $16 million. There's been properties at $23 million sold at $14 million.

Matheson says that families who couldn't afford to buy in Santa Barbara were still given loans with no down payment, and high interest rates, now to devastating effect.


TOM MATHESON: It makes me want to cry. It's hard. It shouldn't happen. I think as a responsible father and parent you don't want to see that happen. But society works on you a little bit where you want to have something better and you see that happening and it's just really hard.


NANCY KAPP The death of the American dream is here. People who had houses, they're looking at them and it's like looking at smoke and ashes. And no-one is there to help them pick up the pieces. It's like these people... The thing we need to be preventative in this country - don't let people become homeless, because once they hit the streets, that's going to be the death of us.


BONNIE I feel alone. I feel abandoned. I just feel bad about myself. It's like, "Who are you? Where are your personal things?"  Nothing.

For some, the parking lot is just a stop on the road. And a few days after we first met, Barbara Harvey has received good news. An old friend heard that she was sleeping in a parking lot and has offered her a place to stay.

BARBARA HARVEY: Hello. Good to see you. Come on in.

Barbara greets me at the door of her new home, along with the Labradors who kept her warm on so many cold nights on the street.

BARBARA HARVEY: This is my bedroom and obviously the doggies' bedroom. Ranger sleeps here. Phoebe likes to sleep either on my bed in the corner here or else she'll sleep in the cupboard. I put a pillow in there for her in the cupboard.

Today Harvey looks like a different person but she doesn't feel different. Harvey believes that being homeless gave her a new perspective on middle-class aspirations, along with the ability to survive loss.


BARBARA HARVEY: The problem is that the people who feel broken by being homeless were dependent on their homes for their identity. They were dependent on all of their belongings and possessions as their identity. And that isn't who they are.


CRAIG MILLER: I'm a big believer in the American dream, but maybe not traditionally how we think of as the American dream being you know, two kids and a dog and whatever, a 3-bedroom house. I'm a big believer that people should have the freedom to follow the God-given design of their life and who they are and not try to fit into what everybody else thinks they should or shouldn't be or do, and that that ought to lead to abundance.

For Miller, life in a parking lot has redefined what abundance really means. He says that it has all woken him up to what's important.


REPORTER: Are you happier now than you were five years ago?

CRAIG MILLER: Oh, yeah, hands down.

REPORTER: Right now, in this parking lot?

CRAIG MILLER: Yeah. Even with the daily frustrations that may come. I'm less encumbered. And then I feel like when I was happy I was pretending to be happy so everyone around me was much happier, it seemed like, than me and they were pleased with my performance and who I was but I wasn't pleased, and I'm very pleased now and I become more pleased, obviously, with each new step.

For Barbara Harvey, finding a new beginning at her age will not be easy. But tomorrow morning, she'll see the sun rise through something other than her car window.

BARBARA HARVEY: I see actually a very positive future. I don't know what I'm going to be doing to earn a living, quite honestly, but it's OK because, whatever it is, that will be the right thing for me to do. That's the way I see it. If I get hired, then that's the right place to be. So that's an adventure too. If it's all an adventure, it makes it simpler.


Reporter/Camera
AARON LEWIS

Editor
WAYNE LOVE

Producer
PETER CHARLEY

Original Music composed by
VICKI HANSEN