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Open House

Foreclosures Across United States Skyrocketing; Eighty-three Percent Of All Fire-Related Fatalities Occur At Home; Bob Vila's "Weekend Project"

Aired September 23, 2006 - 09:31   ET

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

GERRI WILLIS, CNN ANCHOR: Don't let mortgage payments bring you down. Find out what you can do to fight foreclosure.
Learn how to keep you and your family safe from a house fire.

And we're in the gutter this fall with Bob Vila for "Weekend Project."

Good morning, everyone.

I'm Gerri Willis. And this is OPEN HOUSE.

Foreclosures across the United States are skyrocketing. Last month saw a staggering jump in foreclosures, 53 percent. These aren't just numbers we're talking about. These are real families living through this very real nightmare.

(BEGIN VIDEOTAPE)

WILLIS (voice-over): For 15 years the Vanbibbers have lived in this home in Littleton, Colorado, with no plans to ever move. But one bad decision threatens everything they've worked for.

CHRISTINE VANBIBBER, FEARING FORECLOSURE: We only paid $106,000 for this house. And it appraised a month after we moved in for 125,000. So -- and since the properties in this place have gotten so inflated, it now appraises at $330,000.

WILLIS: Despite big paper gains, the Vanbibbers are drowning in debt and fighting off foreclosure. How did this happen? Each time the home's value increased they refinanced their mortgage, taking out cash to maintain their lifestyle.

VANBIBBER: Eventually we ended up in a mortgage situation where we needed -- the mortgage we did was for $297,000. And that paid off one of our vehicles and it paid off some of the credit cards that we had.

WILLIS: They chose an adjustable rate mortgage, commonly known as an ARM, which locks in a fixed rate for a short period of time, after which it can change. And that means monthly payments can move lower or, as in this case, higher, much higher.

VANBIBBER: I pay $173 of the payment, and each month goes to principal. Like, $121 goes to the escrow, $2,063 goes to interest. I've never done an ARM and I will never do it again.

WILLIS: And the Vanbibbers aren't alone. Colorado has had the worst rate in the nation for the past six months, peaking in August with one in every 300 households in foreclosure.

TUCKER HEART ADAMS, COLORADO CHIEF ECONOMIST: Because the recession was so long and so deep here in Colorado, people have just gotten themselves into serious financial trouble. The number of people who are still out of work are making it difficult for many families to handle their mortgage payments, and particularly if the mortgage payment has gone up.

WILLIS: Hard times and rising interest rates have hit consumers nationwide. In August, on average, one in every 1,000 homes was in some state of foreclosure.

OLIVER FRASCONA, ATTORNEY, BOULDER, COLORADO: It's only fair to assume that most consumers try as hard as they can and do the best that they can. Some of them are unsophisticated in the long-term results of the loan that they're taking.

WILLIS: Christine is one of those consumers. In her case, a few missed payments, compounded by a failure to communicate with the lender, put her on the path of foreclosure.

VANBIBBER: The whole dreams that you have -- and it's because you get into things you can't get out of. I just feel sorry for people -- have to happen to them.

WILLIS: Whether the Vanbibbers will keep their home depends on the outcome of their October court date.

VANBIBBER: I'm still ready to fight this. I want to -- I want to not foreclose. I'm doing to do whatever I can to keep this house right now.

(END VIDEOTAPE)

WILLIS: The most important thing is to avoid getting into a situation like the Vanbibbers. You can take steps to avoid foreclosure. Even if you feel all hope is lost, listen up. Sue Hunt is with Consumer Credit Counseling Services in Atlanta.

Sue, welcome.

SUE HUNT, CONSUMER CREDIT COUNSELING SERVICE: Thank you.

WILLIS: These numbers are amazing, I have to tell you. One in 300 households in Colorado. That's amazing. Why are so many communities in trouble?

HUNT: Well, what we're seeing at Consumer Credit Counseling Service -- in our counseling services -- is there's been a huge increase in the number of people that are just struggling to make their mortgage payments. About 50 percent of the people that we talked to last month were in some kind of adjustable loan. And that seems to be posing a real burden and a struggle for consumers nationally.

WILLIS: Sue, it seems like some people just don't understand their loans very well. What are you telling your clients?

HUNT: Well, what we hope that clients do is they come to us before they actually buy the house. It's a really good idea to get some pre-purchase education about loans and the kinds of loans that are out there before you sign the note to the paper.

WILLIS: Right.

HUNT: For people who have already moved into their houses and are maybe looking down the road and knowing that those payments are going to go up, we try to work with them real closely to get a budget put together that will show them how much more income they have to bring in or find some way that they can reduce their expenses.

WILLIS: Well, Sue, you can actually call the bank. If you've got a problem, you can pick up the telephone and call.

Why don't people do that?

HUNT: Well, interestingly enough, about 50 percent of the people that lose their houses to foreclosure have never, ever called their lender.

WILLIS: Wow.

HUNT: And I think the biggest reason is that they're really just afraid to call the lender. They're afraid that the lender is there to take their house away. And that's really one of the common myths that we find, is lenders really want to work with consumers to keep them in their houses if they can.

WILLIS: Right.

HUNT: And we encourage consumers or help them to make that first step of calling the lender.

WILLIS: Right, exactly. And the last thing the bank wants is to have that house on their books. In fact, they lose something like $40,000 to $50,000 on the average house.

But who specifically do I call? Do I call the fellow who lent me the money in the first place, or is there a specific department to go to?

HUNT: We suggest that usually by the time you have fallen behind on your mortgage you're getting letters from your mortgage company. And many consumers don't open those letters, again, just because they're afraid to see what might be in them. But those letters will really contain some great information for them.

It will usually have the phone number and a contact in the loss mitigation department of their loan servicer. And in some cases it will also possibly refer the consumer to a nonprofit credit counseling agency, where they can get some good housing advice before they make that phone call.

WILLIS: Right. Like your own.

Let's talk about how these payment plans work. What do the banks usually want you to do if you are one, two, three payments behind?

HUNT: Well, obviously what the lender wants you to do is to get caught up on your note as quickly as possible. So, if you're able in some way to get the money you're behind and give that to your lender to get caught up, then that's a quick and ideal solution for everybody. But the truth is that that's not something that really works for most consumers who have fallen behind on the mortgage.

So what the lender is looking for is primarily a budget where there's a positive cash flow in the household. And once they can see that there's positive cash flow and that the homeowner is motivated to stay in the home, then there's a wide range of options that most lenders can offer to a consumers to stay in the house.

WILLIS: Well, that's -- that's great news for so many people out there, particularly people who are in some of these adjustable rate mortgages that are so difficult to deal with.

Tell me, though, how do these plans work as a practical matter in the long term, and how long do you have to turn the situation around?

HUNT: Well, I think the first question -- the last question that you asked is maybe the most important, is how long does a consumer have to get caught up on their mortgage, or at least to set up some kind of repayment plan with the lender? Usually they have at least two or three months. It depends on the laws within the state.

There are many short foreclosure states, like the state of Georgia, where you can lose your home within three months. So act quickly to get in touch with your lender.

WILLIS: So obviously you don't have a lot of time. Is there any line in the sand, so to speak, where there's nothing you can do?

HUNT: I really haven't found that there's a line in the sand.

WILLIS: That's good news.

HAMMER: With one possible -- with one possible exception, and that is the sad fact is that almost every month we have people call us who are actually on the courthouse steps waiting for the sale to happen.

WILLIS: Wow.

HUNT: So we can't usually help people who are that far long. But if you can contact your lender before the foreclosure date and let them know that you're motivated to stay in the home and let them know that you have resources to do that, most lenders want to avoid that high cost of foreclosure and they'll try to figure out some way to work with you. WILLIS: Sue, thanks so much for your help today. We appreciate it.

HUNT: Thank you very much.

WILLIS: There's so much more ahead for you today on OPEN HOUSE.

Next, ways to protect you and your family from fire. You'll learn how to protect your home from going up in flames.

Then, leaving storm gutters clogged. It can be dangerous and costly. We'll talk with home improvement guru Bob Vila about how to clean them yourself.

But first, your "Tip of the Day."

(BEGIN VIDEOTAPE)

WILLIS (voice-over): Turn someone else's loss into your dream can true. Buy repossessed objects at auction. It's a good idea to attend a few auctions before you're ready to make a purchase. Get a feel for what's a good deal.

Ask what, if any, information or identification you need to bring along. Will you need to pay in cash? Is there an entry fee?

Research the items up for auction ahead of time. Check out a car's value on Kelley Blue Book. And search for an accident and history report on CARFAX. If possible, get the item you're after appraised. Make sure you obtain certificates of authenticity on collectibles and antiques. If the deal seems too good to be true, it probably is.

And that's your "Tip of the Day."

(END VIDEOTAPE)

COLLINS:

WILLIS: We're about a week away from October. That's Fire Safety Month. Eighty-three percent of all fire-related fatalities occur in the home, and fire kills more Americans than all natural disasters combined. Fire prevention is serious and it needs your attention right now.

Chief Charlie Dickinson is with the U.S. Fire Administration in Washington.

Welcome, Chief. Good to see you.

CHIEF CHARLIE DICKINSON, U.S. FIRE ADMINISTRATION: Thank you. I appreciate the opportunity to be here.

WILLIS: Well, let's get down to it. I think most people think, you know, "I've got smoke alarms. What else do I need?" DICKINSON: Well, you know, the amazing part is that most people -- and that's part of the fire services battle, if you will, if that's the right term to get most people's attention, that fires are preventable. There's 30,000-plus departments across the country. Not one of them wants a fire to occur.

WILLIS: Right.

DICKINSON: However, last year, just for example, there were 24 million calls for service. Of those, almost a half a million fires were in structures where people either work or they live. And that is the dilemma, because the fire service, when it goes to work because there's a fire, we're already behind the power curve, if you will. We're trying to cut the losses.

WILLIS: Well, Chief, let me interrupt you here a second, and let's get to some of those issues that are in the home.

What is the most common way that a fire starts in a house?

DICKINSON: Well, and I don't mean this to sound disrespectful, but there's still three primary causes of fire: men, women, and children. Everything else you can throw under about 10 percent. It's the human factor.

It's the forgetfulness, it's the not paying attention. It's forgetting what we learned as young people. And it's about being responsible for those that we as guardians and parents, particularly for children and for our elderly family members, is to make sure, for example, if you have -- the products that we use today for entertainment, let's just talk about that for a minute. The proliferation, the number of devices that we have in our home to entertain ourselves, meaning...

WILLIS: Are you telling me that my fire is catching -- my TV set is catching my house on fire? Is that what you're saying?

DICKINSON: No. What I'm saying is, because we added a DVD, we added a VCR, we added a surround sound home theater, a lot of homes aren't prepared for the electrical outlets to carry those kinds of loads.

WILLIS: Right.

DICKINSON: So we run another power cord, a common term in the industry called a zip cord, which is a very light, temporary cord that's way overpowered, overmatched for the load we ask it, and then we hide it and we put it underneath the carpet. And when you add all..

WILLIS: So those are two things you're doing wrong right there, right?

DICKINSON: Exactly.

WILLIS: You're putting -- you're putting these cords under the carpet, you're using the wrong hook-up.

Lots of things people do wrong. Let's give another example. Maybe not as high-tech. How about candles, for example?

DICKINSON: Well, you know, there's a -- there's a belief today by the candle manufacturers, particularly, there's more candles in homes today than this country served and used in the 1800s, simply because they're a decorator's dream. They add a lot of ambience, they add a lot of -- well, just -- it's a comfortable feeling to have candles lit.

However, we -- we in the fire service call that the dragon's loose in your home. And you need to pay attention, because...

WILLIS: Chief, let me interrupt you for a second. We're seeing some pictures right now of a room that is erupting in flames. How long does it take the typical room just to go up?

DICKINSON: The typical room can -- can become totally involved in fire if it has three things: fuel, time, and the energy that it takes for it to spread. Every minute, a fire will exponentially double in size.

WILLIS: Wow.

DICKINSON: So, in less than five minutes, that room can be totally engulfed.

Here's the challenge. If you have a smoke alarm and you're asleep on the second floor and you hear something in the middle of the night, are you going to go gamble to get up and run downstairs to see what the problem is? You better not.

Call 9-1-1 and get your family out. And let the professionals, the volunteers...

WILLIS: Right.

DICKINSON: ... whoever is responding, the people who understand how to put out fires, to do that work. Time is of the essence for people to get out.

WILLIS: And, you know, I just have to say, time here, we're looking at, you know, about a minute here on this room going up in flames. Let me tell you, I would be running in the opposite direction.

But, Chief, answer this for me, if you would. What kills more people? Is it fire or is it smoke?

DICKINSON: Oh, it's the smoke. The majority of people -- and there's close to 4,000 people every year that die in fires -- and it's the smoke overwhelmingly 90 percent of the time. Now, some, of course, obviously are consumed by fire, but most of the time it's the smoke that does the damage. WILLIS: And let's talk about kids for just a second, because I know that's what people are really worrying about in their homes. How do I keep the children safe?

DICKINSON: Well, you know, what's amazing to us in the fire service, kids have a tremendous ability to learn at an young age, and particularly the formative years from kindergarten, through third and fourth grade.

Number one is make sure you have a smoke alarm that works, that has a battery in it that works on every level, and particularly close, if not in the bedrooms where the children are.

Number two, practice. Make sure they understand if the alarm goes off in the middle of the night what to do.

Number three, make sure they do hear the alarm. There's some concern by the nation's industry that sometimes children don't hear that, particularly the first hour they're asleep.

WILLIS: Right.

DICKINSON: Number three, have an exit drill in the home. Exercise. Make sure they understand where to go.

WILLIS: All right.

DICKINSON: Number four, practice it. You will be amazed how they remember.

WILLIS: We appreciate your time today, sir. Thank you so much.

DICKINSON: Thank you.

WILLIS: Still ahead, why campus fire safety needs special attention, and steps to keep your child safe.

And the fall season brings full gutters. We'll check in with Bob Vila, who will show you how to take care of the job on your own.

"Weekend Project" is next. But first, your mortgage numbers.

(COMMERCIAL BREAK)

WILLIS: Fall is here. Cool temperatures, back to school, football. But fall also means the leaves come down, and gutters at your home can get clogged. Cleaning those gutters can be done by yourself, though.

For some advice, we turn to none other than Bob Vila.

(BEGIN VIDEOTAPE)

WILLIS: How does it look?

BOB VILA, HOST, "BOB VILA": Well, it looks like a gutter that was put on two or three years ago with roof guards. And roof guards keep out all this detritus for the most part, but they don't keep the granules off the shingles from washing off and running. So you've got a sludgy, junky half inch of stuff in here to clean out.

WILLIS: Bob, how many times a year should I be cleaning these out?

VILA: Oh, just once in the fall.

WILLIS: Once in the fall is enough?

VILA: And remember, at the end of the fall.

WILLIS: So after all the leaves have fallen, right?

VILA: Right. Yes.

WILLIS: You want to wait, definitely?

VILA: Yes. Let them all fall and then clean the gutters out.

WILLIS: I guess my big fear here is this is not entirely safe, getting up on this ladder, trying to get the leaves out. And if you don't have gutter guards, it's even harder.

What do you suggest to keep safe?

VILA: Especially if you have a two-story house, hire somebody to do it for you. But if you are going to attempt to do it by yourself, always wear sneakers or rubber-soled shoes that are going to be -- you know, provide a non-slip kind of situation.

Learn how to use a ladder. Position it sufficiently away from the house so that the angle is a good, safe angle.

When you've got roof guards like this, obviously the purpose is that -- gutter guards, the purpose is that they're going to keep all the leaves and debris from getting into your gutter. But as I was saying, if you remove them and take a look inside...

WILLIS: Yes.

VILA: ... you're going to notice that...

WILLIS: Ooh, there's a lot of muck here. Look at this.

VILA: That's right. It's muck.

WILLIS: Yuck.

VILA: It's a combination of natural stuff, rotten leaves, and some of the mineral granules from the top of the shingles. You can work on -- on a gutter like this with a simple nylon brush like that.

WILLIS: Like this?

VILA: Go in the other direction. You want to head -- move the muck towards the conductor pipe, towards the downspout.

WILLIS: Oh, because then it will just obviously go the right way, right?

VILA: Obviously, you want to get it to go down the conductor pipe. You take it down there and force -- force some more water down to the end.

WILLIS: Here we go. Gutter guards.

Are they -- are they worth the price?

VILA: Oh, absolutely. When you live like this house, surrounded by trees right on top of the roof, having these guards makes all the difference in the world, keeps all these leaves from falling in there and clogging it up and rotting in there.

WILLIS: Now let's talk a little bit about what happens if you don't do this.

VILA: If you have a lightweight metal gutter like this -- and they're not the strongest if they're overloaded with weight of -- with the weight of all this rotted debris -- and believe it or not, when you add to that the weight of water that then freezes, and so you've got big chunks of ice up here, that's enough to start prying them away from the house or bending them out of shape so that they don't look right.

WILLIS: Is there anything that you need to do to your gutters other than clean out the muck every year?

VILA: Well, cleaning out the muck is important. And if they're water gutters, you want to oil them, linseed oil once a year to keep them from rotting out.

WILLIS: That's a lot of work.

VILA: The other thing that you want to figure out, even with lightweight gutters like this is, are they firmly attached? If any of these attachment points are loose, you want to figure out how to tighten them back up again before winter.

(END VIDEOTAPE)

WILLIS: As always, if you have an idea for a weekend project, send us an e-mail to OpenHouse@CNN.com. And you can watch past weekend projects on our Web site, CNN.com/OpenHouse.

Straight ahead, getting serious about campus fire safety. Important tips for you and your child when OPEN HOUSE comes right back.

(COMMERCIAL BREAK)

WILLIS: More than 10 million students went to college this fall. Now, these young adults, though, face a risk of fire in their new homes. And experts say they may not be sufficiently prepared.

According to the Center for Campus Fire Safety, more than 80 people have died in both on and off-campus fires in the past six years. Over 75 percent of these fatalities occurred at off-campus housing, where schools often lack jurisdiction and cannot impose safety regulations.

Now, this means students renting houses and apartments on their own have to be proactive. Students should always ask their landlord when their home was last inspected and if it met local fire codes.

If you have any concerns, contact your local fire department to learn how you can get an inspection on your own.

Many college fires involve alcohol consumption and smoking. So drink responsibly and dispose of all smoking materials safely.

Finally, students must check their fire alarms and make sure fire exits like windows and doors remain unobstructed and can be opened easily in an emergency.

If you have any questions or tips you want to share with your fellow OPEN HOUSE viewers, send us an e-mail to OpenHouse@CNN.com. And you'll find more on today's guests and topics on our Web site, CNN.com/OpenHouse.

As always, we thank you for spending part of your Saturday with us. OPEN HOUSE will be back next week, right here on CNN. And you can also catch us on "Headline News" every Saturday and Sunday at 5:30 p.m. Eastern Time.

Don't go anywhere. Your top stories are next on CNN SATURDAY.

Have a great weekend.

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