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CNN NEWSROOM

Conflict Reports on Whether Osama bin Laden Is Dead; Floods and Tornadoes Tear Across Midwest; Car Bomb Kills Dozens in Baghdad; Exotic Mortgages May Become A Problem For Some; "New You" Resolution Updates

Aired September 23, 2006 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


FREDRICKA WHITFIELD, CNN ANCHOR: "Now in the News," an unconfirmed French newspaper reports that Osama bin Laden has died of typhoid fever. Our CNN reporters and security analysts are working across the globe to get at the bottom of that story. It's based on an alleged French intelligence leak. Our Nic Robertson has come up with new information; he joins us live in one minute.
A car bomb killed dozens of people lined up to buy fuel in Baghdad's Sadr City. Also today, Iraq's military says it has a major terrorist leader and two of his aids in custody. We'll hear from Arwa Damon, live from Baghdad. That's coming up in 10 minutes.

The man reading a paper in this picture may be the new leader of al Qaeda in Iraq. If confirmed to be him, the images would be the first of Abu Ayyoub al-Masri to be released since he succeeded Abu Musab al-Zarqawi who was killed in an air strike in June. The picture is from an insurgent video released two years ago which reportedly shows al-Masri executing a Turkish hostage.

Deadly destructive storms unleashed floods and tornadoes across the Midwest, late last night. In Louisville Kentucky, more than 100 people were forced into shelters overnight. More storms are on the way. Our weather center is tracking them. We'll tell you where they are headed next in about three minutes.

And Nation of Islam leader Louis Farrakhan says he is severely ill. Farrakhan is complaining of an infection he links to an ulcer discovered by Cuban doctors last Spring. Farrakhan underwent surgery for prostate cancer eight years ago. He is 73.

And you're in the NEWSROOM, where we cover the news as it unfolds. I'm Fredricka Whitfield. It is Saturday, September 23.

Straight ahead this hour: Dead or alive? Controversy this morning over a reports on the status of Osama bin Laden.

Severe storms tear through the Midwest. Where are they heading now?

And those interest-free and other so-called exotic mortgages, are they really as alluring to your pocketbook as they sound? You're in the NEWSROOM.

Osama bin Laden dead or alive? A French newspaper reports that, according to French defense ministry documents, the terrorist leader is dead. Is it true? Neither French nor American government officials are confirming the published report. Our senior international correspondent Nic Robertson is digging up details from London.

NIC ROBERTSON, CNN SR. INTERNATIONAL CORRESPONDENT: Well, Fredricka, the longer the day goes on and the more information we have coming in about this. It seems to indicate that most governments are not willing to go close to this report.

Their French president today, when commenting on the newspaper article in France, said that he couldn't confirm it. Pakistani officials say they can't confirm the report that Osama bin Laden died of typhoid there, as reported in the newspaper. U.S. officials are saying that they, at this time, do not have this report, do not have this information.

One senior Saudi official has also said that he's not aware of this particular report. What we have is a French newspaper and a journalist of this regional newspaper who says he has seen a confidential document that is in possession of French officials that it shows that Osama bin Laden died on the 23rd of August inside Pakistan, that Saudi intelligence officials got this information on the fourth of September from a reliable source.

It says that Osama bin Laden died of typhoid after having paralysis in his lower limbs. But, we have spoken to one Saudi source, who is close to intelligence circles there, who says he has not seen the report, but is aware of discussions within Saudi intelligence circles and says Osama bin Laden has had a water-borne illness, has been seriously ill over the past few weeks, but is not dead.

But it does seem, as we stand back and analyze all the information we're getting at the moment, Fredricka, is that most governments -- Pakistan, France, United States, indeed a senior Saudi official now -- cannot confirm any of the content that has been reported today in this French newspaper -- Fredricka.

WHITFIELD: And so Nic, there's a lot of fallout, isn't there, within the French government about this leaked report. The French president, as you said, Jacques Chirac says he wants to get to the bottom of how this report was leaked, if indeed it was leaked and it is official, accord to go this French newspaper, how potentially damaging does the government seem to think that this is that their kind of intelligence would be published?

ROBERTSON: Well, it's not the first time this regional newspaper has had information leaked from French officials to them. Certainly, trying to find out how a document -- and the French president today interestingly didn't say that this document didn't exist, didn't say that it was a genuine document -- or wasn't a genuine document that had been leaked, and did seem to think that a real document within the hands of French officials had been leaked to this newspaper.

So it would seem to be, from a French point of view, very important to stop that leak, and embarrassing for the government of France as well. If they have put into public domain or caused information to be put into the public domain that could actually be counterproductive to catching Osama bin Laden.

There are many reasons intelligence officials around the world leak information. It is not beyond the bounds of a reasonable debate to consider whether or not intelligence officials have leaked this kind of information because they want to go to Osama bin Laden onto television.

They haven't seen him, and he hasn't released any images of himself for almost -- new images, recent images of himself for almost two years. There have been a number of audio messages, the most recent on the 30th of June. But it could well be there's a sort of a concerted lack operations effort, if you will, to goad Osama bin Laden into appearing on television again so intelligence officials can glean more information about him.

We really have to be very, very cautious at this time, and I think, again, we have to look to what we're hearing from U.S. officials, Pakistani officials, or senior Saudi officials as well as the French president that they cannot confirm the details of this report -- Fredricka.

WHITFIELD: All right, Nic, thanks so much.

French authorities asking a lot of questions, our Nic Robertson on the story asking a lot of questions. And so is terrorism analyst Peter Bergen. He'll be joining us a bit later in this broadcast to tell us what he's learning through his sources. Meantime, learn more about this mysterious terrorist leader. Tonight at 10:00 Eastern, "CNN PRESENTS: IN THE FOOTSTEPS OF BIN LADEN."

Meantime, here in the U.S., severe weather, severe storms ripping through the nation's heartland. Several deaths are blamed on powerful thunderstorms and tornadoes that swept across parts of the Midwest and south overnight and into this morning. This is what it looks like in south-central Missouri, where high winds damaged dozens of homes and a school. The power of that weather system also being felt in the deep South. Officials in Alabama say a possible tornado caused heavy damage in two communities north of Birmingham. So far, no injuries thankfully reported there.

And in parts of Kentucky, floodwaters are on the rise in Louisville. Heavy rain swamped roads and flooded homes. Reports there are linking at least four deaths to the bad weather.

Right now the threat of more severe weather in the South and Midwest. Let's check in with Reynolds Wolf in the Weather Center, deadly weather.

REYNOLDS WOLF, CNN METEOROLOGIST: No question about it. Certainly dangerous throughout the afternoon and into the evening, possibly by later tonight as well. Here's what we have at this time from the National Weather Service, the Storm Prediction Center out of Norman, Oklahoma. (WEATHER REPORT)

WHITFIELD: Well Reynolds, does this seem to be the time of year when we should expect this kind of tornado activity?

WOLF: Not at all. This is actually the type of thing you'd see usually in the late spring or perhaps the early summer, but when you have these kinds of air masses, that cool air coming from portions of the Rockies and Great Planes and interact with this moist air coming in from the Gulf of Mexico, this is what you get.

WHITFIELD: All right, Reynolds Wolf, thanks so much from the Weather Center. We'll check back with you.

Well meantime, in Iraq, a car bomb exploded today killing dozens in Baghdad's Sadr City, and the interior ministry reports the head of a major terror group linked with al Qaeda has been captured. Arwa Damon is following these developments and joins us live from Baghdad.

First Arwa, let's talk about the latest messages coming from the Osama -- the Iraqi al Qaeda leader.

ARWA DAMON, CNN CORRESPONDENT: Well, what we're hearing from the leader of al Qaeda in Iraq -- now mind you this was in a statement that was posted on a Web site, and it is actually posted alongside the re-release of a video that shows the execution of a Turkish hostage. Now there is no way to verify his identity. He is known by two names, Abu Ayyoub al-Masri or Abu Hamza al Muhajer, but in this statement, posted alongside, according to the "Associated Press," some video that shows the beheading of this Turkish hostage.

The individual who we see carrying out the execution is believed to be the man who took over from al Qaeda in Iraq from Abu Musab al- Zarqawi. However, there is no way to verify his identity. But given the timing of this and that it came within hours after the Sunnis announced that today, Saturday, would be the first day of the holy month of Ramadan for them, it could perhaps be perceived as being a message to his followers -- Fredricka.

WHITFIELD: Meantime, lots of violence taking place throughout the country, particularly in Sadr City with at least 28 dead?

DAMON: That's right. Actually, and actually we just spoke with the Iraqi police, and they're telling us that that death toll has gone up to 34 dead and dozens more wounded. Now, this happened around 10:00 in the morning when a car bomb detonated close to a fuel line. The detonation of the car bomb, though, also causing a fuel tanker to explode. At least 34 Iraqis killed in that incident.

And this does come on the first day of Ramadan for the Sunnis. The Shias in Sadr City is predominantly Shia. It's the home to approximately two million Iraqis. Shias were out in Sadr City shopping for necessities, getting ready for the holy month of Ramadan.

Now Ramadan, of course, is normally a time of peace and compassion, it's a time of forgiveness, a time that is meant to bring families and communities together, but here in Iraq, so many Iraqis are telling us that it is anything but that. Here in Iraq, it is actually a time when they are expecting more violence.

WHITFIELD: Arwa Damon, thanks so much for that update out of Baghdad.

The other top stories we continue to follow this hour. Osama bin Laden dead or alive? That's the question being asked after a shocking French newspaper report. Our correspondents are following this story all day. We'll bring you the latest developments as they come into the NEWSROOM.

Tornadoes and heavy rain leave a trail of destruction in the Midwest and more severe weather may be on the way. A weather update next.

(COMMERCIAL BREAK)

WHITFIELD: "Now in the News," a quarter past of the hour. Is Osama bin Laden dead or alive? A French newspaper that published information from a leaked French intelligence report is sparking that question. It quotes a source as saying Saudi authorities are trying to confirm reports that bin Laden died of typhoid fever in Pakistan last month. A Saudi source tells CNN that credible reports in the last few weeks indicated that bin Laden was ill with a water-borne disease, but was not dead.

Tornadoes, hail, floodwaters all spawned by a powerful storm system that swept through parts of the Midwest and South earlier today and last night. Damage is reported in several states, including Missouri, Illinois, and Alabama.

In Kentucky, several deaths are linked to flooding. Check in again with Reynolds Wolf. We certainly remember the warnings yesterday that there was going to be severe weather, but I don't think anyone expected this.

WOLF: No, it's a bit of a surprise to us this time of year to have this kind of weather. But sure enough, it's here, and we've got to deal with it.

(WEATHER REPORT)

WHITFIELD: All right, look forward to that. Thanks, Reynolds.

Well in Iraq, another round of deadly attacks. A car bombing at a Baghdad gas station just moments ago killed more than two dozen people. In a separate incident in the Iraqi capitol, an American soldier was killed by a roadside bomb.

A new concern today about North Korea's nuclear ambitions. An American scholar says a senior North Korean official told him the communist country plans to speed up its plans for making atomic weapons. That move, an effort to pressure the U.S. to return to talks with North Korea. The scholar recently met with North Korean officials. Good news for spinach lovers. Fresh spinach could be back in the grocery stores just days from now. Investigators have traced the E. coli outbreak from fresh spinach to the California Salinas Valley. Officials say spinach grown from outside that region is safe to eat. So check the labels.

We update the top stories every 15 minutes in the CNN NEWSROOM. Your next update is coming up at 12:30 Eastern.

Let's return now to the most intriguing story of the day and one we are closely following here in the NEWSROOM. An unconfirmed French intelligence report that Osama bin Laden may have died of typhoid in Pakistan. So far, our own Nic Robertson has confirmed from Saudi sources that bin Laden might be at least ill with a water-borne disease.

On the phone with me now from Charleston, South Carolina, is our senior medical correspondent Dr. Sanjay Gupta.

All right, Dr. Gupta, first off, what does it mean to have typhoid?

DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Well typhoid is a bacterial infection and you know, in the United States, most people really don't come in contact with the bacteria that causes typhoid fever, but it is endemic, sort of indigenous, to several parts of the world, including parts of Asia, including parts Africa, as well.

It's bacteria illness that is spread through the water. Oftentimes drinking contaminated water, for example, might give you the infection. One of the symptoms that is most commonly associated with is the fever, giving the name typhoid fever. Oftentimes a very high fever, you can get abdominal cramping and you can become quite ill from dehydration as well.

Now Fredricka, usually it can be treated pretty successfully with antibiotics if it's started within a couple, three days of the diagnosis. But a couple of things need to happen. You've got to confirm, in fact, that someone has typhoid, start the antibiotic therapy, and then usually people make a recovery from that. But if those things don't happen, it can be quite devastating going through various stages of illness, and then people obviously do die of this as well.

WHITFIELD: So stages of illness such as a type of paralysis to perhaps the lower body, just like Nic Robertson reported from some of his sources that possibly Osama bin Laden may have been suffering some sort of paralysis?

GUPTA: You know, I don't know that's typically associated with typhoid. I mean, I heard those reports as well, Fred. You know, they talk about the -- someone being so -- sort of having such a degree of illness that they really are so of lethargic they don't move anything. They're just basically lying motionless because it is painful to move. Something that affects just the lower body like that -- typhoid isn't the first thing I would think of. I mean, there are other bacteria illnesses that can cause that, including polio. Which is not -- no one is saying that has occurred here, but that is a more common sort of bacteria that could cause this sort of paralysis.

Now, there are lots of other stages of illness, including, you know, the abdominal cramping and subsequently such lethargy that, you know, essentially lapses into coma.

WHITFIELD: All right, Dr. Sanjay Gupta, thanks so much and I will be checking with you again throughout the day as we follow this story.

Another big story affecting you here in the states. Big storms, tracking storms. Hitting the Midwest and the Southeast, more on the severe weather coming up next.

And still, more on Osama bin Laden, dead or alive? U.S. officials say they cannot confirm a French newspaper report suggesting that Osama bin Laden may be dead. We are following this story. We'll bring you the very latest as they come into the NEWSROOM.

(COMMERCIAL BREAK)

WHITFIELD: Saudi intelligence sources tell CNN Osama bin Laden might have come down with a water-borne illness in Pakistan. We'll hear more about this developing story from an al Qaeda analyst in about eight minutes from now. Learn more about the life of the al Qaeda leader tonight at 10:00 Eastern. CNN PRESENTS "In the Footsteps of bin Laden."

Across North Carolina today, dozens of domestic violence shelters are on high alert after a fatal shooting at one. Police say a woman was killed earlier this week when her estranged husband forced his way into a shelter where she was staying along with her teenage son. She was shot to death in the shelter's kitchen. The shelter is in the town of Sylva in western North Carolina near the Tennessee border. Here's part of the call to 911.

(BEGIN AUDIO CLIP)

CALLER: A woman has been shot with a shotgun. He ran out the front door.

DISPATCHER: OK. Is he on foot?

CALLER: He is, and he's got a sawed off shotgun.

DISPATCHER: He's got a sawed off shotgun?

CALLER: Yes, ma'am.

(END AUDIO CLIP)

WHITFIELD: Authorities in more than half a dozen states are now looking for the suspect identified as John Woodring.

Exotic mortgages, code for sometimes getting into a house you couldn't afford with traditional financing? Are they too good to be true? Up next, advice that could help you make the right decision.

And CNN continues to follow unconfirmed reports that Osama bin Laden may be dead. Another update straight ahead in the NEWSROOM.

(BEGIN VIDEOTAPE)

ERIC SCHURENBERG, MANAGING EDITOR, "MONEY": We chose Williamsburg, Virginia, as one of the best places to retire because it is such a unique place. It's one of the most historic cities in America, if not the most historic city.

The whole place say functioning, living museum, and lots of people assume roles of 18th century British colonials are actually retires. Williamsburg is a city of 11,800 people. The tax burden is very low. The cost of housing is low. Sales tax is five percent. The property taxes are very low because the tourism industry generates so much revenue. There are plenty of golf courses nearby, boating on the river, and is the ocean is not far away either.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WHITFIELD: Half past the hour. Here's what's happening right now in the news. The big question: Is Osama bin Laden dead or alive? A French newspaper reports the terrorist leader has died of typhoid. The paper cites a confidential French government document. U.S. intelligence officials say they cannot confirm bin Laden's death, however. A Saudi intelligence source tells CNN he is ill, but not dead.

Severe weather rips across the Midwest and into the south, killing five people. High winds, heavy rain, and tornadoes are reported. This is a scene in Louisville, Kentucky, where streets flooded, prompting evacuations there.

And at least 28 people were killed in Iraq this morning when a car bomb went off at a gas station in Sadr City. That's the predominantly Shiite district of Baghdad. The carnage comes as the Sunnis begin observing the Muslim holy month of Ramadan. Shiites begin Ramadan tomorrow.

New sign that North Korea may be enhancing its nuclear weapons program. A visiting U.S. scholar said senior officials told him North Korea plans to unload fuel rods from its nuclear reactor to obtain more weapons-grade plutonium. He says it's Pyongyang's way of trying to force the U.S. to return to negotiations.

A nationwide manhunt is underway after a woman is killed at a domestic violence shelter, a place she was trying to find refuge. Police say the woman's husband forced his way into the North Carolina shelter, shot her. The suspect is John Woodring. He's considered to be armed and dangerous.

We update the top stories every 15 minutes on the CNN NEWSROOM on the weekend. Your next update is coming up at 12:45 Eastern.

Here in the NEWSROOM, we continue to focus on Osama bin Laden and reports that the al Qaeda leader might be ill with a water-borne disease.

Our Nic Robertson nailed that down about two hours ago from a Saudi intelligence source who said that he is ill but very much alive. On the phone with me now from Singapore is Rohan Gunaratna author of "Inside Al Qaeda."

Glad you could be with us. So if any of this is true that either bin Laden is sick, he's a dying man, or he is dead, given that he is the leader this powerful terrorist group, how much would al Qaeda want to publicize the fact that this man, their leader, is sick or is dead?

ROHAN GUNARATNA, "INSIDE AL QAEDA": Dr. Ayman al-Zawahiri, the deputy leader of al Qaeda, on September 11 this year referred to bin Laden. And I believe that bin Laden is still alive. Ayman al- Zawahiri wouldn't make a statement referring to bin Laden if bin Laden is dead.

WHITFIELD: Really? Why wouldn't he even just so at least you have this mystical, mysterious man, even if he were dead, the world to believe that he was still were living, thereby still helping to empower this group as a force?

GUNARATNA: Today, the threat of terrorism has moved beyond bin Laden. Even if bin Laden is killed, the threat of terrorism will be very significant because the ideology of global jihad has become so widespread that bin Laden is not an absolute necessity to drive the current momentum of terrorism.

WHITFIELD: OK, Rohan Gunaratna, thank you very much, author of "Inside Al Qaeda." That's a very important point that Mr. Gunaratna is making.

We want to turn now to our terrorist analyst Peter Bergen on that very note. Peter, you joining us from Washington. Mr. Gunaratna saying that bin Laden, his existence, is nearly insignificant, that that group doesn't necessarily need him as a leader. Do you agree with that?

PETER BERGEN, CNN TERRORISM ANALYST: Well, we've had something like 20 videotapes and audiotapes from bin Laden, five alone this year, and these videotape and audiotapes are the most widely distributed political statements in history. Every time he releases one, they're seen and heard by a lot of people.

And to most people, bin Laden's statements may just seem like a lot of the same old stuff, but to his followers, they incite attacks against westerners, against Jews, against Americans. And so, in my view, in fact, it's actually very important that he remains -- that the fact -- that he remains alive. I mean, just to stop here for a second because -- let's assess the truth or veracity of this one source in a French intelligence document which was repeated in a provincial paper in France. We know from the past few years that a single source of intelligence can often be wrong.

I mean, one of the reasons we had a war in Iraq is there was a single source of intelligence, a guy with the wonderful name of "Curveball" who suggested that there was an active WMD program in Iraq and that there were links between Iraq and al Qaeda. Well that, of course, turned out to be total nonsense.

And so I think we need to be A, very careful about these kinds of single source intelligence from another intelligence agency. We've got ourselves in a huge paroxysm about this story on CNN and other networks. And if -- let's step back a minute and see what is the truth of this story right now.

We have several U.S. intelligence officials telling CNN that there's nothing to substantiate this. We have two -- one senior Saudi official and another Saudi official saying there's nothing to substantiate the report he's dead. I've talked to members -- people very close to the bin Laden family just 15 minutes ago. The bin Laden family, his immediate family, says there's nothing to these reports.

WHITFIELD: But is his immediate family still in contact with him?

BERGEN: Well, I'll give you an example. They may not be in contact with him, but in Islamic culture, A, it's very important to bury somebody within 24 hours of their death; and, B, it's important to announce it to the world. And I'll give you a concrete example of this.

Ayman al-Zawahiri, al Qaeda's number two, his wife was killed in a U.S. airstrike shortly after the beginning of the war against the Taliban. The family took out a public announcement in an Egyptian newspaper to announce this fact.

And so, you know, by now, if this report is really true that bin Laden had died back in late August, I think the bin Laden family, his immediate family would know because it would be something that they would need to know and that people in bin Laden's circle would want them to know.

WHITFIELD: And, Peter, underscore the significance of this skepticism because this isn't the first time that reportedly Osama bin Laden is dead or facing an illness.

BERGEN: Well, almost every -- I mean, there's been a tsunami of total nonsense about bin Laden's health, about his state, whether he's alive or dead. We've had President Musharraf, the president of Pakistan himself saying at one point that bin Laden was dead. We've had reports of kidney disease, all of which turned out to be total nonsense. So at the beginning, as soon as this story hit, I was skeptical anyway because so much of what's been said about this is nonsense. Now we actually have U.S. officials, Saudi officials, and people close to the bin Laden family pouring a lot of cold water on it this.

WHITFIELD: And so quickly, before I let you go, if there were true, if there was any truth to his death, you think that U.S. officials, French officials, anyone would be quick to boast about his death?

BERGEN: This is not something you can keep a secret.

WHITFIELD: Yes, Peter Bergen, we're going to be talking again throughout the day as we continue to cover this story about these unconfirmed reports about his death or at least that he is suffering from a deadly illness.

Now perhaps you in the country here are in the market for buying a house. And you'll do almost anything to get into one, such as take up on the offers of some fancy financial offerings. They call them exotic mortgages. Are they the best route to get you into a house? We're going to talk to an expert coming up right here in the NEWSROOM.

(BEGIN VIDEOTAPE)

GERRY WILLIS, CNN ANCHOR (voice-over): If inflation has you worried, there are options around the house to cut costs. Let's start with the yard.

(on camera): Keep a good layer of mulch around your flowers and your shrubs. That way you can keep the moisture in, and the weeds down.

(voice-over): You won't spend your time or pay a gardener to keep your garden weed-free.

Back inside, make sure your toilet was purchased after 1992. While an older toilet can use up to 14 gallons per flush, newer models use only 1.3 gallons per flush. That's extra money you won't be flushing down the drain.

And if you have an older washing machine, replace it with a new, front loading model. They use 40 percent to 60 percent less energy and water. Plus, some utility companies will actually give you a rebate for buying these high-efficiency models up to $100.

Gerri Willis, CNN, New York.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WHITFIELD: A top story we continue to follow here. A Saudi intelligence source tells CNN Osama bin Laden has a water-borne illness. That account disputes a report in a French newspaper that the terrorist leader has died of typhoid. U.S. intelligence says it cannot confirm the French report of bin Laden's death. We're following this developing story all day right here on CNN.

Well, something that is very much a reality for a lot of Americans right now, trying to buy a home. And your dream house can turn into a nightmare if you finance it in a risky way. A lot of people have been tempted lately by so-called exotic mortgages such as interest only loans, and there are others. Well, these can backfire if the market seems to be reflecting that a lot of these home values are dropping.

John Lowry is a lender with American Home Mortgage. He's here to tell us what to look out for. And so, John, we're talking about mortgages, fancy ways of getting people into homes that they want. So let's explain, what are exotic mortgages first off?

JOHN LOWRY, LENDER, AMERICAN HOME MORTGAGE: Well, the term exotic mortgage actually came from Alan Greenspan a few years ago when he was talking about all these creative financing ways where people can afford all these exorbitant houses with low payments. And he said these exotic mortgages could cause a problem in the future. And so the name's been tagged.

WHITFIELD: And the future is now.

LOWRY: The future is coming. That's right.

WHITFIELD: It's happening now because we're finding that a number of homes, a significant number of homes out there which had a certain market value at the time of people making these purchases, now the market value is dropping. So what does that mean? You're paying more than your home is worth?

LOWRY: Well, it's kind of a double -- excuse me -- kind of a double whammy. One of the more creative exotic loans was one where you actually didn't even make enough payment to cover the interest that was due. So your loan balance increased instead of decreased. So instead of paying your loan down, you actually went negative. You had a negative amortization loan, and you now owe more than you even borrowed at the beginning.

And if your house went down, and then that's usually only for a temporary period of time, you get these so-called teaser payments, and then when it comes time to pay the piper, all of a sudden your payment can double. People aren't ready.

WHITFIELD: So what's the moral of the story now? Does if mean that if you're out in the market right now looking for a home, you'd better stick with traditional mortgages, or what is the advice? How do you navigate all these options?

LOWRY: It's not necessarily that it's terrible and everybody does one. I mean, there are certainly places where it makes sense. You need to understand what you're getting into and you need to be very educated.

The problem was that these loans were sold to the masses usually through telemarketers or e-mail ads. You can't turn one on without getting three Viagras and two, you know, low mortgage payment hits. And now these people didn't understand what they were getting into.

WHITFIELD: But these lenders apparently are now reminding them.

LOWRY: Oh yes.

WHITFIELD: They're getting some shocking notices, aren't they?

LOWRY: Yes, as a matter of fact, the largest lender is now sending out notices to all of its people that took these loans out in the last few years as an early message to say, oh, you're not going to really have your payment adjusted for another year, but we thought we'd better warn you now. If it adjusted today, your payment would go from $1,200 to $2,400. So you need to prepare, because a lot of people are just playing ostrich. They just put their head in the sand.

WHITFIELD: So if you have one of these mortgages now, and you feel like you're kind of stuck, you're really not. It means that -- or are you? Does it mean that you need to start looking into how do I get myself into something more stable?

LOWRY: Yes, you can do a couple of things depending on the kind of loan you have. If you have one of these option mortgages, where they can go negative am, you can start making the heavier payments now. You can at least pay all of the interest that's due so your loan balance doesn't keep increasing.

WHITFIELD: But nothing's down on your principal.

LOWRY: Right, or you could actually start sending in the 30-year payments, start wielding it down, and that will lessen the impact when the rates change. Otherwise, if you don't think you can handle the increase, you need to start looking around for refinancing now or switching. Don't let it sneak up on you is the moral.

(CROSSTALK)

WHITFIELD: Great advice. John Lowry, thanks so much.

LOWRY: Thanks so much.

WHITFIELD: We're all smarter now when we try to figure out what to do about our home mortgages.

LOWRY: OK, you're welcome.

WHITFIELD: OK, the other top story we continue to follow throughout the day here, damaging storm systems moving throughout the Midwest and even in the deep south. Where might it be heading next? We'll find out.

(WEATHER REPORT)

(COMMERCIAL BREAK)

WHITFIELD: Welcome back to the NEWSROOM. A panel that advises the government on health policy says the Food and Drug Administration needs more money, more power, and more people. A report from the Institute of Medicine says those changes are necessary so the FDA can do a better job of tracking the safety of new drugs. The study comes two years after the painkiller Vioxx was withdrawn from the market amid concerns about heart attacks and strokes.

Still on the health beat, here's an update on a story we've been following all year. You may remember the "New You" resolution? We followed the progress of several individuals making a determined effort to lose weight. Well, nine months later, we've decided to check on how they're doing today.

Here's CNN senior medical correspondent Dr. Sanjay Gupta.

(BEGIN VIDEOTAPE)

GUPTA: When we began the "New You" resolution at the beginning of the year, we had thousands of people who signed up. We picked three power pairs who are trying to do something relatively simple: change their lives, exercise more and eat better. Within the eight weeks that we followed them, they had a 100 percent success rate. The question was, how would they do six months later?

Our twins, Stuart and Mark, an E.R. doc in New York and a lawyer in D.C., were competitive with each other about losing weight. Stuart started at 169 pounds and after eight weeks, 157. He now weighs 161. Mark was 205, dropped to 185, and is now 199.

UNIDENTIFIED FEMALE: He likes this too much.

GUPTA: And then you remember the Rampollas? They're a military family from Wyoming. They are of the Wyoming Air National Guard, and they were starved for time. They wanted to eat right. They wanted to exercise more. So with diet intervention and a trainer, they hunkered down for twice weekly workouts, substituting fast food for fresh and frugal.

Finally, our D.C. lobbyists Donna and Frank say their biggest foe was actually the M&M guy who used to stroll around their office. Donna first weighed 167 pounds. Her net loss, eight pounds. Frank lost a hefty 35 pounds. And that M&M guy? Well, he was shelved.

So they're all doing great six months later. Now it's time for a new you yourself. Here's some tips that they learned along the way and some things that could help you at home.

DONNA WATTS-BRIGHTHAUPT, NEW YOU PARTICIPANT: I think he says after I met Dr. Gupta, it was all over for me.

GUPTA (voice-over): With a sense of humor, nutritious meals, lots of exercise, and a dash of healthy competition ...

STUART RASCH, NEW YOU PARTICIPANT: He's been doing a lot more exercise, upper body work, than I have, so he actually looks pretty slim. Still I think his cholesterol is higher than mine and still I think his weight loss isn't as dramatic as mine.

GUPTA: Our three couples agree they have accomplished a lot. After a few setbacks, they're confident they'll be healthier from now on. Nine months after starting their "New You" resolution, our participants now have some of their own useful tips.

WATTS-BRIGHTHAUPT: M&Ms are, what, 11 calories each.

UNIDENTIFIED MALE: If you make a plan to have a good diet during the course of the day, if you make a plan to ensure you get your exercise in, if you make a plan that, when you're going on the road, you bring your exercise clothes, good things can happen.

MARK RASCH, NEW YORK PARTICIPANT: A lot of people have treadmills. They make wonderful stands for your clothes. Unless you're using it, it's not doing any good.

UNIDENTIFIED FEMALE: Paying attention to what you're eating. You are what you eat.

GUPTA: Sandra Garth is a "New You" veteran. She graduated in 2005.

SANDRA, 2005 NEW YOU PARTICIPANT: It's been a year since my last "New You" resolution checkup, and I am happy to say everything is going great.

GUPTA: Sandra lost 60 pounds in last year's challenge. The weight stayed off because she continued to eat healthy and exercise. To encourage her "New You" successors, Sandra sent a videotape message. Her advice -- workout consistently.

SANDRA: No excuses. We've all got time. It may seem like you don't have enough time, but somewhere within the 1,440 minutes that we all get every day, squeeze in 30 minutes for some workout time.

GUPTA: Good advice from a successful "New You" veteran.

Dr. Sanjay Gupta, CNN, the "New You" resolution.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WHITFIELD: Saudi intelligence sources tell CNN Osama bin Laden might have come down with a water-borne illness in Pakistan. We're learning more about this developing story and unconfirmed reports of the al Qaeda leader's death.

Details ahead in a special edition of the CNN NEWSROOM coming up throughout the day. And learn more about the life of the al Qaeda leader tonight at 10:00 eastern. "CNN PRESENTS: IN THE FOOTSTEPS OF BIN LADEN."

Updating a story we're keeping a close watch on also in the NEWSROOM here. Several deaths are blamed on powerful thunderstorms and tornadoes that swept across parts of the Midwest and south overnight and into this morning. This is what it looks like in south central Missouri, where high winds damaged dozens of homes and a school.

The power of that weather system also being felt in the deep south. Officials in Alabama say a possible tornado caused heavy damage in two communities north of Birmingham.

And in parts of Kentucky, floodwaters are on the rise. In Louisville, heavy rains swamped roads and flooded roads there. Reports are linking at least four deaths to this bad weather.

And it would be nice to say, Reynolds Wolf, in the Weather Center, that it is all behind us.

(WEATHER REPORT)

WHITFIELD: All right, thanks so much, Reynolds.

More on the weather, more on the reported fate of Osama bin Laden.

And also in our 2:00 Eastern hour, my conversation with singer Aaron Neville and how much he misses being home in New Orleans.

A look at our top stories in a moment. Right now, "IN THE MONEY" is coming up next. Here's a preview.

JACK CAFFERTY, CNN ANCHOR: Thank you.

Coming up on IN THE MONEY, hitting the gas versus hitting the brakes. We're going to see if the Fed's making the right calls when it comes to dealing with interest rates.

And the immigrants nobody is shouting about. White collar immigration to the United States. We're going to tell you how much.

And lost in space. We'll look at whose money works better in zero gravity: Washington's or the private sector's. All that and more coming up right after a quick check of the headlines.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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