bankrupt hedge fund

yesterday they announced that 2 hedge funds at Bear Stearns went bankrupt. These hedge funds were highly invested in mortgages and credit. I know that hedge funds use a large amount of margin but I dont understand how they could go from 10 billion$ to zero. Underneath it all there is a house with some value to it. any ideas?

http://www.msnbc.msn.com/id/20075984/

let me know your opinion.

I wonder if the fund managers can be held personally responsible in some way, so that they PERSONALLY feel the pain of losing billions of dollars that wasn't theirs.
I mean, come on! At some point of losing a few billion on a downhill ride, don't you throw you hands up, fess up to the boss that you appearantly don't know what you're doing and need some help... BEFORE the fund is worthless?!
Unreal.

some one broke it down for me and explained how it could go to zero.

If you are 100$ in and you invest with a margin of 10:1 then your investing 1000$. If that 1000$ now looses 10% thats 100$. Since your investing 100$ of your money your now down to zero. And who ever loaned you the funds wants to make sure their money is secure so now the bank that loaned the money is coming for their equity. These leaves the investors with nothing but the shirt on their back. Every one is protected except the investor. that sucks