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Home Energy Rates Change Depending On Time Of Day And How Much Energy Is Being Used; Mortgage Fraud One Of The Fastest-Growing White Collar Crimes In The Country; The Perfect Home Gym; For Some Folks Home Of The Future Is Right Now

Aired January 20, 2007 - 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: Today on OPEN HOUSE, why mortgage fraud is one of the fastest-growing white collar crimes. And everything you need to know about building an affordable home gym.
But first, winter settles in from coast to coast, and that could mean higher energy bills for all of you. Just how high can they go? Well, guess what? It can be up to you.

We've got you covered this morning, starting first with CNN meteorologist Rob Marciano.

Good to see you.

ROB MARCIANO, CNN METEOROLOGIST: Good to see you, Gerri.

WILLIS: You really exist. Because, you know, the last time we were in the same city together, it seemed to me like I was working really hard. And see the pictures?

MARCIANO: Look at you. You are a weather correspondent. Forget about this staying inside the OPEN HOUSE. You need to get outdoors, and you do a great job. You were absolutely buried in snow, giving the play by play and just doing a fantastic job.

WILLIS: And what happened to you? It looks like a sunny day there in Denver when you're there. And you timed it, didn't you?

MARCIANO: Timing. Timing is everything. I don't like to be covered in snow. Nobody does. But that was quite a big snowstorm in Denver.

WILLIS: No kidding.

MARCIANO: And as you mentioned, winter is settling in just about everywhere now.

WILLIS: Everywhere. Well, OK, so I'm going to make you give us a long-term forecast.

MARCIANO: OK.

WILLIS: That's what we all want. We want to know how much we're going to be paying on our energy bills. So tell me, four weeks out, more snow? Any warm weather? MARCIANO: Well, we'll probably get some snow in the next couple of weeks. I mean, it is wintertime. But, over the average -- and that's what we talk about when we talk about a two and three-month forecast -- you know, the average should pan out to be a milder winter, like what we've seen. It's a very El Nino-like winter.

WILLIS: I love -- that's good news. Love to hear that.

MARCIANO: Well, hopefully, it pans out.

WILLIS: I'll be calling you if it's not.

MARCIANO: Yes. Climate Prediction Center out of NOAA, they put out a forecast like what you asked for. And the northern tier states typically sees a little bit more mild temperatures, like we've seen on average, and then the southern half, near normal. So, the brighter...

WILLIS: That's what this map is, right?

MARCIANO: Yes. The brighter orange you are, the UP of Michigan, the Arrowhead of Minnesota, theoretically you should see on average mild temperatures going forward.

WILLIS: You know, I'm kind of thrilled to see California and Texas have some really cold weather, see what it's like to live in the Northeast.

MARCIANO: A little snow in Malibu. That was something to see for sure.

WILLIS: Yes, absolutely.

Rob, thank you for that.

MARCIANO: OK.

WILLIS: Good news for your heating bills. It seems some home energy costs are going to be lower than originally predicted. The average homeowner in the U.S. will pay about $873 in heating bills this winter, and that is according to the Energy Department. And it's down from the first forecast, which was nearly $950.

Now, if this hold up, it will be the first decline in heating bills in five years. Good news there.

Keeping your home warm can still be costly, but just like cell phone minutes or airfare, energy rates change depending on the time of day and how much energy is being used.

Steve Watson is the host of "Don't Sweat It" on HGTV in Los Angeles.

Good to see you.

STEVE WATSON, HOST, "DON'T SWEAT IT": How are you, Gerri?

WILLIS: I'm excellent.

OK, so how does this work, that energy prices fluctuate? Why?

WATSON: Well, just like your cell phone or just like airline prices, you have peak hours and you have off-peak hours. You have peak times and off-peak times. If you use a lot of electricity when everyone else on the grid is using a lot of electricity, your price per kilowatt hour is going to be higher and your bill is going to be a lot more expensive.

WILLIS: So, typically then, what should I be doing? I mean, typically, is there more energy being used in the morning, in the afternoon, evening?

WATSON: Well, I think, from what I understand, from what I've read, business hours, when people are at work, that is the peak hour. You know, just like with your cell phones.

In the middle of the day, on a hot day or a super cold day, people have their heaters or air conditioners going in the summer time. People are at work. And the grids are getting overused. And because of that, the prices go up. So there's several things you can do to monitor that.

WILLIS: Well, let's get there, yes. So you say, of course, that one of the biggest mistakes people made is they actually turn off their heat during the day.

WATSON: Yes, because just like when you start your car, every time you turn the ignition, your car uses more gas than normal than if it's just running. If you turn off your heat or turn off your AC completely during the day, whenever you turn it on, it's going to be a huge surge in your electricity, and it's going to pull a lot more. So -- and it's going to be more difficult for it to heat or cool your house because, if you have the heat off all day long and your house drops to 60 degrees, well, just to get back up to 72, it's going to run for three, maybe four hours, where if you kept it at 65, 68 degrees all day long, it's been on and off, then it's going to take you a matter of minutes to heat it to a comfortable temperature.

WILLIS: What about space heaters? Do you like those? Are those good energy consumers?

WATSON: You know, space heaters, they do pull a lot of electricity. If you're going to use a space heater, just like with any small appliance, look for the energy saver logo on it. But, again, you're using a small appliance to heat a huge room, and that could just run for hours and hours and hours.

WILLIS: Programmable thermostats, everybody needs one, right?

WATSON: I would recommend a programmable thermostat. You can get those at any hardware store. They're easy to install.

You can set that so you never have to worry about it again. When you're up and you're around, if you want it to be a nice comfortable 70 degrees, and the hours you're going to be in your house, you set that, and then it knows, when you leave, if you've got it programmed, it can drop down to 65 or 68 and save you a little bit of money, and the hassle of having to walk into the hallway and hit buttons all the time.

WILLIS: Bottom line, how much can I save?

WATSON: Well, depending on where you are in the country -- in certain states like Tennessee, it's like 5.8 cents per kilowatt hour. In California, it's 12 cents per kilowatt hour. New York, it's 14 to 15 cents. And it fluctuates throughout the day.

If you -- if it's 10 cents an hour and you're spending 10 cents an hour for 24 hours, and over a period of 30 days if you cut that down a little bit, you can save yourself $70 to $80 just by being smart and knowing when to run certain appliances at certain times of day, and, you know, stay off the peak hours.

WILLIS: Great.

WATSON: There are programs that most power companies have, if not all, where they can monitor the usage and the price per kilowatt hour. And if you get with them and get with the program, then they can tell you when it's best for your household to use the most energy and save you the most money.

WILLIS: And that's a great idea. Probably contact your electric company to find out if you can get that information.

Steve, thanks so much for being with us today.

WATSON: Thank you.

WILLIS: As you worry about your energy bills going up, your gas prices are going down. The national average of a gallon of gas dropped by 10 cents in the past month. It's due to the quickly dropping price of oil. Almost all states are seeing a significant drop in gas prices except for California, Nevada, and Hawaii.

Coming up on OPEN HOUSE, the number of people falling victim to predatory lending is skyrocketing, so much so that the FBI is taking notice. We'll tell you how to protect yourself.

Plus, building a gym in your home doesn't have to cost you an arm and a leg. I'll show you how to get a great workout without breaking the bank.

And check this out. We'll take you inside the home of the future and tell you why it could be the home of, well, right now.

But first, your "Tip of the Day."

(BEGIN VIDEOTAPE)

WILLIS (voice-over): No matter what kind of TV you're in the market for, the most important thing to keep in mind is screen size. The distance between you and your TV should be two to three times the diagonal screen size. So if you get a 30-inch TV, you should be sitting about 5 to 7.5 feet away.

Next to consider, standard CRT, LCD, plasma, or rear projection. Each has its pros and cons -- viewing angle, response time, contrast ratio, resolution, to name a few. A resolution of 480 denotes standard TV, while 720 and 1080 denote true HDTV.

That's your "Tip of the Day."

(COMMERCIAL BREAK)

WILLIS: Our viewers -- that would be you -- had such a strong response to our "Mortgage Meltdown" program that we want to continue bringing you the latest information on foreclosures.

Mortgage fraud has turned into one of the fastest-growing white collar crimes in the country, with complaints to the FBI doubling every year.

Rachel Dollar is an attorney who writes a blog. She's a blogger -- mortgagefraudblog.com.

Rachel, great to see you.

RACHEL DOLLAR, ATTORNEY: Thank you for having me.

WILLIS: We talk a lot about mortgage fraud on this show, but, of course, these smart crooks, they're always changing their game.

Which is the most common fraud out there right now?

DOLLAR: There's actually quite a few that we're seeing more and more of, kind of with the changing in the economy right now and the reduction we're seeing across the country in some of the housing prices. One of the largest kind of emerging schemes that we're seeing is cash back at closing. Sellers who are...

WILLIS: How does that work?

DOLLAR: Sellers who are left with homes and unable to sell them at the prices that they're looking for are offering to actually increase the sale price of the home to the buyer, and then the buyer is given the excess cash proceeds at closing. Therefore, the seller actually walks away with the asking price that they wanted for the home, and the buyer ends up with cash in their pocket.

WILLIS: But that creates problems for the buyer, right?

DOLLAR: Well, it does, especially if home prices don't continue to increase, which is, of course, not what we're seeing in the economy right now. And a lot of these homes do end up eventually going into foreclosure, and then the lenders are left with properties that, of course, are not worth what the home was sold for and what the loan is on the home.

WILLIS: All right. Let's talk a little bit about flipping. You say that can also be a scam.

DOLLAR: Yes. Property flipping -- first of all, it's not illegal just to buy a property for less than it's worth and to sell it for what it's worth. When we talk about flipping in the context of mortgage fraud, we're talking about a quick resale of property that includes an inflated valuation of the property. And lenders end up holding the bag on a lot of these inflated loans.

The way that it ends up usually affecting the consumer is because they get pulled into these flips in investment schemes, and a lot of these are done through the get rich quick and real estate type seminars that we see. And people are pulled into these, and they're actually sold homes that were purchased in foreclosure for sometimes hundreds of thousands of dollars less.

WILLIS: Not good news. Exactly, Rachel.

Let's talk about straw buyers very quickly. We don't have a lot of time.

DOLLAR: Straw buyers are situations where people are offered money in order for -- to use their identities in real estate transactions. And this is, of course, not legal.

If you're going to purchase a home, you have to intend to make the mortgage payments, not intend that somebody else is going to make them. And we see straw buyers -- they're offered usually somewhere between $5,000 and $10,000 to use their credit.

It's portrayed as a no risk sort of a transaction for them. But, of course, if the people who are actually supposed to be responsible for the mortgage don't make the payments, then it's that ultimate person who signs on the bottom line that ends up responsible, and their credit's the one that's destroyed.

WILLIS: Well, Rachel, of course, people really want to watch out for this. And the targets are typically the elderly, first-time home buyers. We could go on and on here, but we're really out of time.

Rachel, thank you so much for your time.

DOLLAR: Thank you, Gerri.

WILLIS: Still ahead on OPEN HOUSE, breaking into a sweat without breaking the bank. We'll tell you how to build an affordable gym right in your house.

And you see the wild high-tech advances for your home available in the future. Well, guess what? The future is right now. We'll explain.

But first, your mortgage numbers.

(COMMERCIAL BREAK)

WILLIS: Working out is usually at the top of the list of New Year's resolutions, but busy schedules and expensive gym fees, well, it can all make it really hard to follow through. So we put together the perfect home gym, where you can burn calories without burning your budget.

(BEGIN VIDEOTAPE)

WILLIS: Everybody wants a home gym, but what if I don't have a lot of money to spend? Say, only $500. What can I get?

DAVID HARRIS, EQUINOX HEALTH CLUBS: For $500, you can get some very basic tools. You can get, for example, a foam roller, which is really good for loosening up a lot of the muscle tissue around the joint.

WILLIS: Like this?

HARRIS: Right. And put your hips right up here. Put your hips...

WILLIS: This is my kind of exercise.

HARRIS: Put your hips right up on this.

WILLIS: I get to lay down.

HARRIS: This is called a Swiss (ph) ball. And basically, it's a rubberized ball that you can load up with air and you can do a variety of things on it.

WILLIS: You know, I have one of these. I don't really know what you do with it.

HARRIS: OK. You can use it to add a little bit more complexity to a basic exercise. Like, let's say it's a crunch. So why don't you lie down on the ball.

WILLIS: Thanks. I get to do this. OK.

HARRIS: They're very inexpensive. These generally run somewhere around $30 or so.

These are called body bars, and basically think of them -- like barbells but rubberized. So you can lie down on the bench, you can do a basic bench press. That's probably the lowest cost cardiovascular exercise you can do -- next to running, of course, which costs nothing.

WILLIS: Except for the shoes.

HARRIS: Except for the shoes.

WILLIS: Which are expensive.

Let's say I've got a little bit more money to spend. What's the next step up? HARRIS: A step up would include anything where you're going to add a little bit more weight to the equation. So, for example, these kettlebells. And kettlebells were originated in eastern Europe. And it looks like a little bowling ball with a handle on it.

These are called Dyna Disks, and basically you can do movements like squatting on them. They have a little bit less stability. So it just adds a little bit more complexity to a basic exercise like a squat. It's great cardiovascular.

WILLIS: It is.

HARRIS: And a little bit of an explosive workout.

You might want to upgrade to a utility bench, maybe a treadmill or a recumbent cycle or an upright cycle to add a little bit more variety. The most important thing about a treadmill is the platform. So you want to make sure that if you're going to be running at high speeds, you have a platform that's somewhat shock absorbent.

WILLIS: Right.

HARRIS: So you don't want something that's going to be potentially damaging to your joints, and you want a panel that's very easy to use. You know, a very easy stop-start action. And also, it's always good to have a little bit of an emergency release...

WILLIS: Like that.

HARRIS: ... so it automatically stops.

A good utility bench will run you a couple hundred dollars. You want to get one that's adjustable. These are generally sold two ways. You can get an adjustable bench, or you can get a flat bench.

A flat bench is obviously going to keep you in a fixed plane. The adjustable will allow you to bring it from a fixed flat angle up to 45 degrees.

As far as setting up a home gym space, you want to be concerned about ventilation, make sure that there's adequate air in the room, so it's not a closed space so you're going to feel like you're suffocating. You also want to make sure that you're working out on a floor that's somewhat shock absorbent and that it's easy to clean.

(END VIDEOTAPE)

WILLIS: OK. If you want more information, you can find a list of the items and more about this and other topics on our Web site at CNN.com/openhouse.

And if you have an idea for a "Weekend Project," send us an e- mail to openhouse@CNN.com.

Coming up, living like the Jetsons. This futuristic faucet is just one of the many gadgets in this high-tech home. We'll take you on a tour. That's coming up next.

But first, your "Local Lowdown."

(BEGIN VIDEOTAPE)

WILLIS (voice-over): Park City, Utah, was founded as a gold, silver, and lead mining town way back in 1869. More people call Park City home in the late 1800s than they do now. Fewer than 8,000 people call it home today, and at any given time, the tourist population is bigger than that of full-time residents.

During the winter months, tourists hit 343 ski and snowboarding runs. And during the summer, they can bike, hike, and run on more than 75 trails. The U.S. ski team does just that. It's called Park City its year-round home since 1974.

And the original home of Mrs. Fields Cookies? Right here in Park City. Yum.

The 10-day Sundance Film Festival kicks off on Thursday and continues through next weekend.

That's your "Local Lowdown."

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WILLIS: You always hear about the home of the future, but for some folks, the future is right now.

CNN's Renay San Miguel shows us how to get the latest in high tech right now.

(BEGIN VIDEOTAPE)

RENAY SAN MIGUEL, CNN CORRESPONDENT: Gerri, there are a lot of great next generation products for the home, but we thought we'd show you a next generation home.

Michael Seamons, with Exceptional Innovations, is our tour guide.

And we start with the living room, which is the focal point of many a home, right?

MICHAEL SEAMONS, EXCEPTIONAL INNOVATIONS: That's right. The TV becomes the dashboard for the digital home through products that we make called Life/ware.

You can see everything from cameras on the television, I can see things like shades, lights, security systems. And when I navigate with the simple remote control, I can see TV, music, pictures. Everything comes to life on the television.

SAN MIGUEL: Got you. I mean, everything is just like a PC and in the TV as well. In the next room, I know that there is an Xbox 360 that is more of a set-top box than just a video game console. There's TVs actually in every room of the house, isn't there?

SEAMONS: There are. And because the TV becomes the place that we experience all the things that happen here in Life/ware. You'll even see in the kitchen there's an appliance that's really fit for the kitchen environment, that gives us not just entertainment and automation, but it gives us a whole organizational system to manage the family.

SAN MIGUEL: And we go to, once more, a touch screen PC here made by HP. And this is what powers the kitchen.

SEAMONS: That's right. It's a touch screen, very easy to use.

I can hit -- if I want to touch the kitchen shades, it will close the shades, it will open the shades. Everything can be done simply with my finger here.

I get to control everything that you see in the house, but it also has this whole feature where I can touch the calendar, the family brain of the home. This really becomes the refrigerator where -- kind of Post-It Notes that go up magnetically, things that I touch with my finger and just make my family more organized like this.

SAN MIGUEL: Much more easy. You hope you make the family more organized. Some families, you know, that's going to be a challenge.

You have to show me the faucet here, because this really speaks, you know, high tech to me.

SEAMONS: Yes, this is very cool. This is actually the Brizo Pascal faucet. It comes -- comes out of the countertop, starts the water up. I can put it away.

It's not the only smart appliance in the kitchen, though. LG has brought a new line of appliances that are Life/ware connected so when the washer finishes, it actually sends a message to all the TVs that says, it's time to change the wash from the washer to the dryer.

SAN MIGUEL: OK. Or tell it to empty the dishwasher because everything is done.

SEAMONS: Yes. These are all the things that are coming about with Life/ware and all these new connected technologies.

SAN MIGUEL: All right, Michael. Thank you very much.

One other quick note here, Gerri. All of this can be installed in the home, hardware and software, for a price tag of about $15,000.

I'm Renay San Miguel, reporting from the Consumer Electronics Show in Las Vegas, CNN.

(END VIDEOTAPE) WILLIS: Well, $15,000 won't buy you this next piece of technology -- 225 carats of diamonds. Well, that's pretty excessive, but this is way over the top. Take a look at the new Philips 42-inch plasma TV, complete with well over 2,000 individual diamonds and a whole lot of security.

It's the company's way of celebrating its one-millionth plasma sold.

If I had that many diamonds, they sure wouldn't be on my TV set.

And in case you were wondering, this particular TV is not for sale, but Philips says it will auction it off later this year with the proceeds going to charity.

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 in the CNN NEWSROOM.

Have a great weekend.

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