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Open House

Rescue or Rip-Off?; Newest Grills on the Market; iPhone Hits the Streets

Aired June 30, 2007 - 09:31   ET

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

GERRI WILLIS, HOST: Hello. I'm Gerri Willis. And this is OPEN HOUSE, the show that saves you money.
Coming up, grilling season is in full swing. We'll show you the best grills and deals out there that won't bust your budget.

And the new iPhone, is it worth it? We'll take a look at what you get for the money.

But first, more and more of us are having trouble making the mortgage payment each month. Foreclosure rates are spiking.

Imagine losing your family's home. What would you be willing to do to save it?

Here's one family's story.

(BEGIN VIDEOTAPE)

WILLIS (voice over): Rhonda Schnitzler (ph) and Hank Gribensk love their home in Loxahatchee, Florida. They hope to pass it on to their children one day, but that day may not come.

HANK GRIBENSK, DEALING WITH FORECLOSURE: It's a worry every day.

WILLIS (on camera): Rhonda and Hank fell behind on their monthly mortgage payments and struggled to keep their heads above water. Then they found what they thought would be the perfect solution in an unlikely place, their mailbox.

GRIBENSK: Countrywide already filed for foreclosure, so that made it public record. As soon as that happened, flyers came in from everywhere. "Stop foreclosure." "We can help." And then the flier from the Florida Housing Council came, and that was the best-written flyer out of all of them.

WILLIS: How did they come off to you in their flyer?

GRIBENSK: Well, as soon as it said Florida Housing Council, I associated that with Florida.

WILLIS: It was safe.

GRIBENSK: Right. And then in the flyer, it said through federal guidelines. So with that, I figured, OK, this is something government-wise that will help. WILLIS (voice over): To Jack Moussa, the company's founder and managing director, the name isn't misleading. In fact, he says it's straightforward.

JACK MOUSSA, FLORIDA HOUSING COUNCIL: It's not a government agency. There's Florida roofing. Does that make them a Florida state company? It's just a name.

WILLIS (on camera): And how does it help people?

MOUSSA: If there is a need for financial restructuring, debt management, we would be called upon, and we provide a service.

WILLIS (voice over): As promised, FHC stopped the foreclosure process, but Rhonda and Hank paid a price. They became renters in their own home.

GRIBENSK: We got a letter which stated that we were now renters and that we were so far behind in the rent that they were going to evict us if we didn't come up with ...

WILLIS (on camera): Wait a minute. So you get a letter in the mail that you are now renters?

GRIBENSK: Right.

UNIDENTIFIED FEMALE: Yes.

WILLIS: And what was that like?

UNIDENTIFIED FEMALE: You wouldn't want to be in this house.

GRIBENSK: We were not happy.

UNIDENTIFIED FEMALE: No.

GRIBENSK: We were not happy when we got that letter.

UNIDENTIFIED FEMALE: I was crying hysterically.

WILLIS (voice over): The tears and the heartache could have been avoided if the couple had read and understood the fine print of the contract they entered into with FHC.

GRIBENSK: He didn't say anything about signing over the house to him, deed-wise. All we were doing was signing a contract to hire his company to help us out of foreclosure proceedings. That was it.

WILLIS: In fact, that wasn't it. Not even close. What they had signed was an agreement to put their home into a trust and to make payments through FHC for one year, after which they had the option to repurchase their home.

DAVID SILVERSTONE, COUPLE'S ATTORNEY: It said that, in order to get their house back after a year, they had to repay a $26,000 fee, plus 50 percent of the equity in the home. WILLIS: According to the lawsuit Silverstone filed on behalf of the couple, this would give FHC a 300 percent return on their initial investment.

SILVERSTONE: We're saying they violated Florida law. We have an Unfair and Deceptive Trade Practices Act. They violated Federal Truth in Lending laws. We have a usury law here in Florida. Those are the main statutes they're violating.

WILLIS: This isn't the first time that FHC has been sued for the way it does business.

(on camera): Why are so many people suing you and saying your action is unfair and misrepresents your intent?

MOUSSA: Every one of these clients that have sued, they have lived through the terms of our agreement in full, which -- during which time we have subsidized their payments. Every agreement is only entitled to one year. After the year expires and we called upon them to come and resolve the interest in the trust, they have come up with suits that this is illegal and it's coercive, and we didn't know what we did.

ADAM SKOLNIK, ATTORNEY FOR FLORIDA HOUSING COUNCIL: The language is written in plain English. There's no "legalese" in any of the documents. It's actually written on what's been known as a fifth grade level.

WILLIS (voice over): Here's an excerpt from the contract. "For the purpose of acquiring beneficial interest in a title-holding land trust in which a third party corporate trustee shall hold title to the subject trust property," et cetera.

For now, Rhonda and Hank are still in their home. Their lawyer is trying to get the transaction with FHC declared null and void and unenforceable.

GRIBENSK: I get angry. But we'll make it.

(END VIDEOTAPE)

WILLIS: The jury is still out in this case, but mortgage foreclosure schemes are a big problem across the country. Who protects you from folks who would rip you off?

Here to talk about it are Laurie Maggiano, a foreclosure prevention expert with the Department of Housing and Urban Development, and Navid Vazire from South Brooklyn Legal Services.

Welcome to you both.

Navid, let's start with you. This is a virtual epidemic out there. Why?

NAVID VAZIRE, SOUTH BROOKLYN LEGAL SERVICES: Well, it's the combination of rising foreclosure rates due primarily to subprime lending and rising property values.

WILLIS: Laurie, what would you say?

LAURIE MAGGIANO, FORECLOSURE PREVENTION EXPERT, HUD: Gerri, borrowers are scared when they're unable to make their mortgage payments, and they just don't know what their options are.

WILLIS: Laurie and Navid, stay with me. We will have more on this very serious topic in just a moment.

But later in the show, we're going to talk about one of the biggest stories of the week, the iPhone. It's out, but at $500 to $600, is it worth it? We'll check it out for you.

The Fourth of July is right around the corner. We'll show you how to buy the best grill for the right price, and we'll tell you where you need to go to get the best barbecue in the country.

But first, your "Tip of the Day".

(BEGIN VIDEOTAPE)

WILLIS (voice over): Campfires aren't revered for just camping anymore. More and more homeowners are installing fire pits in their own back yards. We teamed up with "This Old House" to show you how it's done.

(on camera): Before you get started, check local and state fire codes. And remember, any fire pit should be located a good distance from your home and trees and anything else that could catch on fire.

(voice over): Start with the circle of interlocking stones. You could get these at your local home improvement store. Next, dig your hole slightly larger than the stone's circle. And here's the key: make sure it's level.

Add some gravel and tap it down. Now it's time to glue your stones together. Use a zigzag pattern with your caulk gun. This will keep stones from getting blown over by the wind.

Of course, you don't want to forget about the fire ring. This will help contain those flames.

And finally, focus on your cap stones. That's the last layer of stone that will complete your fire pit. You can use a chisel or a saw to get that rustic look.

I'm Gerri Willis, and that's your "Tip of the Day".

(COMMERCIAL BREAK)

WILLIS: We're back with Laurie Maggiano, foreclosure prevention expert with HUD, and Navid Vazire from South Brooklyn Legal Services.

OK, I want to start by showing you a map of the foreclosure hotspots across the country. The big states here, Nevada, Colorado, Connecticut.

This is an epidemic of foreclosures. You can see just how serious this is.

Laurie, I want to start with you. What types of scams are going on out there?

MAGGIANO: Gerri, we're seeing three major types of scams. The first one if sort of a fee for service, where a company convinces you that they have some experience or inside track with your lender, and they can negotiate a deal that you can't negotiate on your own.

WILLIS: That sounds crazy on the face of it, right? I mean, you can get in there and do it yourself.

MAGGIANO: Absolutely. That's the first thing that borrowers need to understand, that they need to contact their lender immediately if they can't make a mortgage payment.

WILLIS: What are the two other scams?

MAGGIANO: Lenders do want to help.

WILLIS: Yes. What are the two other scams, Laurie?

MAGGIANO: The two others are sort of what I call refinance roulette, where someone comes in and convinces you that the way to get out of your mortgage problem is to refinance again. But because your credit's already impaired, you usually get a higher interest rate and a higher payment, and it just delays the inevitable. But the perpetrator gets high fees for the refinance.

WILLIS: OK.

Navid, let's talk about what you're seeing on the ground, because you're actually talking to people who are being scammed in the field.

VAZIRE: That's right.

WILLIS: What are the common ones out there?

VAZIRE: Well, people who are in foreclosure often are solicited within days by these so-called foreclosure rescue experts who are usually after the deeds to their houses and are after the equity that they've built up over decades.

WILLIS: And show me -- let's talk about these brochures, the flyers, everything that's out there trying to, you know, trick people into working with them. Talk about what those look like. We're seeing some right now.

VAZIRE: Yes. Well, they promise to get people out of foreclosure. They often make some allusion to the community in which they live and then something about preserving the makeup of the community. There may be even religious references.

Yes, it's really quite outrageous.

WILLIS: Yes. And the common ones look pretty appealing.

Laurie, are there laws out there to protect people?

MAGGIANO: Well, there are laws to protect people. However, most of those laws are basic consumer protection laws. There's nothing specific to mortgage delinquency fraud.

WILLIS: Navid, do we need more on the books?

VAZIRE: We may need more on the books, but really what we need is more law enforcement. We need regulators and law enforcement agencies to start taking the problem seriously. This is a massive epidemic of theft that is destroying communities.

WILLIS: Laurie, should consumers take some responsibility here as well?

MAGGIANO: Oh, absolutely. Consumers have lots of information available to them. There are many reputable Web sites -- www.fha.gov, for example, has lots of good information, whether or not you're an FHA borrower. So educate yourself about what your options are.

WILLIS: Laurie, thank you.

Navid, thank you for joining us today.

We appreciate it.

Now, if you are worried about foreclosure today, the best step is to call your lender directly, tell them your difficulty making your mortgage payment, and ask for patience. The truth is, most mortgage lenders don't want to own your home. Marketing it and selling it cost them thousands of dollars. By asking for help early, you may forestall foreclosure. So pick up the phone and call the loss mitigation department at your bank.

Still ahead on OPEN HOUSE, get ready to fire up that grill this Fourth of July week and get ready to save money at the same time. Important tips coming up.

And the iPhone is out. But is it worthy of $500 or $600 of your hard-earned money? We'll check it out.

But first, your mortgage numbers.

(COMMERCIAL BREAK)

WILLIS: So you may be thinking about splurging on a new grill this summer, but not so sure if you want to break the bank. We visited our friends at Consumer Reports to test out some of the newest grills on the market and, well, do a little cooking too.

(BEGIN VIDEOTAPE) WILLIS: Bob, you've got to start us off here. Tell us the features we're looking for when we're buying a grill. What are the critical things you want to have?

BOB MARKOVICH, CONSUMER REPORTS: One of the critical things certainly is to take a look at the grates. You want either porcelain- coated cast iron or a good heavy stainless steel.

This is the porcelain-coated cast iron. What's good about that it's probably going to provide better searing and do a better job of keeping the temperature even and consistent.

WILLIS: All right. Well, that's good to know.

Now, everybody uses stainless steel these days, right?

MARKOVICH: More and more.

WILLIS: I mean, that's the thing. But I don't know the difference from good stainless steel, bad stainless steel.

How do you tell?

MARKOVICH: There are two basic grades. The less expensive stainless steel is what's known as 400 grade, and that basically has less chromium, less nickel, and is likely to corrode. In fact, also, it tends to be magnetic, as you can see.

WILLIS: Ah, OK. So this is the test.

MARKOVICH: This is the test.

WILLIS: When I go shopping, I take a magnet with me, and the cheaper grade is the one that's going to hold the magnet, right?

MARKOVICH: Yes. The pricier stuff is the 300 series. The cheaper grade is going to hold that magnet.

WILLIS: Now, I think this one is the Kenmore, correct?

MARKOVICH: This is large. You're looking at about 30 burgers that will fit on here, for a large family, for big gatherings.

WILLIS: That is big.

MARKOVICH: It's big. And you're looking at $800 for this. Once again, stainless ...

WILLIS: An investment.

MARKOVICH: It's an investment.

WILLIS: So this is, I would guess, people would say the Mercedes. This is an expensive piece of equipment, this Viking grill. Oh, man, that's heavy.

MARKOVICH: You're looking at $3,200 for this.

WILLIS: Whoa. That's a lot of money.

MARKOVICH: It's an awful lot of money. And as we found, it didn't cook quite as well overall. It didn't do as well overall.

WILLIS: It didn't cook as well? Wow.

MARKOVICH: It didn't do overall as well as this $800 Kenmore. The $800 Kenmore costs a quarter of what this costs and cooked -- and out-cooked it.

WILLIS: So, I love this little tiny Weber grill. It's so cute. You can take this anywhere.

MARKOVICH: It's great if you're going to NASCAR, you're going to the local baseball game, the big ones. This thing weighs about 30 pounds. It's easy to carry.

WILLIS: Pretty easy to travel with. Now, how much does this cost?

MARKOVICH: You're looking at $180. And what you're also getting with this is much more cooking space than any other portable we've tested and far better performance. This is one of the top -- one of our top-rated grills.

WILLIS: You know, why don't we grill up some food here, Bob?

MARKOVICH: Sounds great.

WILLIS: Bob, how do I know when the chicken is done, for example? I can never tell.

MARKOVICH: 165.

WILLIS: And what about meat and fish? We've got these burgers on. What temperature should they get to?

MARKOVICH: You want to look at about 160 for burgers and about 145 for fish.

WILLIS: I love to have a lot of people over for dinner to barbecue. Can I cover every inch with food?

MARKOVICH: Not if you're cooking fatty foods like fish or, in some cases, rib eye steaks. You really want to leave about 40 percent of that grill surface uncovered in that case to avoid the flare-ups.

WILLIS: We've got a flare-up.

Well, I think these are going to be fabulous. You want some Ketchup?

MARKOVICH: Sure.

(END VIDEOTAPE)

WILLIS: All right. Get out that pen and paper. Time now for the list.

Number one, shop around. I know it's tempting to buy the biggest grill, but consider how much you actually grill and what features are important to you.

Next, test the metal. Stainless steel is a popular feature to many grills this summer, but take a magnet with you to test its grade. Look for 300 series. It's a higher quality than a 400 series.

And avoid flare-ups. If you're cooking fatty foods like fish or steaks, keep 40 percent of your grill surface clear to avoid a burnt meal.

And as always, if you have an idea for a "Weekend Project," send it to us at openhouse@cnn.com. And if you want to check out this "Weekend Project" again, check out our Web site, cnn.com/openhouse.

Are you completely sick and tired of everyone talking about the iPhone? Me too. But the talk is over, and the iPhone has hit the streets. We'll tell you if it's worth the cash next.

But first, a city with a knack for barbecue in this week's "Local Lowdown".

(BEGIN VIDEOTAPE)

WILLIS (voice over): Kansas City, smack dab in the heart of America. It's within 250 miles of both the geographic and population centers of the U.S. But it's barbecue bull's eye, with more than 90 restaurants to choose from.

Each fall, American Royal hosts what it claims to be the world's biggest barbecue contest, as well as livestock and rodeo shows. And to quench your thirst after all that sweet and spicy finger-licking food, the city's tap water was recently rated the cleanest among the 50 largest cities in the U.S.

That's your "Local Lowdown".

(END VIDEOTAPE)

(COMMERCIAL BREAK)

WILLIS: iPhone, need I say more? Well, I'm going to.

The ads, they're everywhere. It's a buzz all over the Internet, the radio, TV, even in our news room.

With all the hype, is it really worth it or just all talk?

Lance Ulanoff is with "PC" magazine to tell us if the iPhone is a bust or a must.

Welcome.

LANCE ULANOFF, EDITOR, "PC" MAGAZINE: Thanks. Thanks for having me here.

It's -- nothing could live up to this kind of hype, nothing.

WILLIS: Right, exactly. And you know what I'm obsessing over? Is the money.

I want to show you some numbers here. If you buy the 4g version of this, you're going to end up paying a ton of dough -- $499 for the phone, as you can see, $36 for the activation fee. Ultimately, $1,200 for the whole thing. If you get the 8g version, it's even more, $1,800.

If you get the family plan, I don't know, you're going to have to finance it with a mortgage or something.

So we did some interesting numbers to find out what else you can do with the same amount of money. I want you to check this out.

The kinds of things that you could buy if you took the money that you're going to spend on this iPhone and bought, oh, say, a four-night stay in Maui with airfare, 100 hours of baby-sitting.

You're getting -- you're getting the idea here. Eighty-three nights of Domino's Pizza. That's not bad. And instead of a 3-inch plasma screen, how about a 42-inch plasma screen?

ULANOFF: Look, that is true. That is true. At the uppermost level, when you factor in the phone, you factor in the plan, you factor in the activation fee, it is a big chunk of money. But the fact of the matter is, when you buy a phone, you don't always get it for free.

You get it from anywhere to 0 to $400, depending on the phone that you want. OK?

WILLIS: Right.

ULANOFF: And everybody is paying for plans.

WILLIS: Plans. You've got to tell me, though, we're not -- you know, the plan here is one thing, but the phone itself, do you really like it?

ULANOFF: Well, but this is -- well, I had an opportunity to touch one, to play with it. OK.

It kind of lived up to expectations. It was very sexy, felt good in the hand, very responsive.

And actually, sexier than this thing. But not a lot thicker than this, honestly. And the screen, the interface is going to be the really exciting thing. This baby has what's called multi-touch. All right? So you're going to be accessing things, but it's also going to be a screen that, if you turn it this way, it's going to reorient itself. If you have a photo on the screen -- and I did this last night -- you take it, you take your two fingers, and you do this, you pinch, and it gets smaller.

WILLIS: OK. I've got to interrupt you here. This isn't really an iPhone. I just have to point it out.

We made one of these. There's actually cardboard in the middle. It's not a real phone.

OK.

So ultimately, though, Lance, it's got a lot of cool features.

ULANOFF: It does. It does.

WILLIS: What are the downsides?

ULANOFF: Well, here's the thing. I saw the keyboard, the virtual keyboard. And I went to the notepad and I'm like, "Oh, let's type on this." And of course people will be using this for SMS texting as well.

It's very small. I could not type a word. I could not type a sentence.

Now, I know people say over time you'll get used to it. But the thing is, the tactile response is not there. When you have a real keyboard, you feel it. You'll never feel this thing. So you're going to have to be very, very good with your thumbs.

WILLIS: Well, let me ask you this, because some people say this is a great fun phone for the weekends, but not for business.

Do you agree?

ULANOFF: There's no enterprise support. Now, you're not going to have BlackBerry support.

You can't get your BlackBerry e-mail, your exchange e-mail. You're not going to get that kind of support.

You will be able to get your Yahoo! e-mail, and if you can find a way to get e-mail through there, you can do it. But it's not going to be -- it's not going to be easy.

WILLIS: That's too complicated.

ULANOFF: But this is a phone for people who want a phone and a music player.

WILLIS: OK, Lance. Thank you so much for helping us out. We appreciate it. Thank you for spending part of your Saturday with us. OPEN HOUSE will be back next week, right here on CNN. And you can catch us on "Headline News," every Saturday and Sunday at 3:30 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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