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CNN LARRY KING LIVE
Democrats Unity Plan: Will it Work?; Dealing With Potential Foreclosure
Aired June 24, 2008 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LARRY KING, HOST: Tonight, home foreclosures -- they're at one million and climbing. The housing market collapse could create millions more.
Can you stop this from happening to your home?
It's not too late. There's hope and help from Donald Trump and other real estate experts.
Plus, has the Democratic healing begun? Is Bill Clinton back in the game?
And does John McCain's campaign team need a shakeup?
All right now on LARRY KING LIVE.
We begin with politics, which in this year is never dull.
In New York, is Andrea Tantaros, Republican strategist, media consultant, is a supporter of John McCain.
In Washington, Hilary Rosen, political director and Washington editor-at-large for The Huffington Post. She backs Obama.
In Fargo, North Dakota is Ed Schultz, progressive talk radio, host of his own program, a backer of Obama.
And here in Los Angeles, and Reed Dickens, former White House press secretary for George W. Bush and a supporter of John McCain.
OK, Andrea, Hillary Clinton comes back to the Senate today, gets applause, gets hugs. She meets with Obama in New Hampshire on Friday.
Are they back together?
ANDREA TANTAROS, GOP STRATEGIST, SUPPORTS MCCAIN: Well, time will tell, Larry. We'll see. You know, I think Hillary Clinton realized for her own reputation and for the good of her party, she's got to come out, she's got to put on her game face for Barack Obama. But we'll see how much she does participate, how aggressively she goes out and campaigns. So far, Hillary Clinton's position has been she is the one that has introduced him to her top donors.
Why doesn't Barack Obama just call them up herself?
She still maintains control over her supporters. We'll see if she relinquishes that control any time soon.
KING: Hilary, Bill Clinton will not be in New Hampshire on Friday with his wife and the presumptive nominee. But his spokesman released this statement: "President Clinton is obviously committed to doing whatever he can and is asked to do to ensure Senator Obama is the next president of the United States."
That statement came less than 48 hours after Clinton declined to say whether he would endorse Obama. That was following a speech at the U.S. mayors conference.
(BEGIN VIDEO CLIP)
QUESTION: President Clinton, will you be endorsing Barack Obama?
WILLIAM JEFFERSON CLINTON, FORMER PRESIDENT OF THE UNITED STATES: (INAUDIBLE). Thank you so much.
(END VIDEO CLIP)
KING: What do you make of that, Hilary?
HILARY ROSEN, POLITICAL DIRECTOR, THE HUFFINGTON POST, SUPPORTS OBAMA: Well, one thing is I think Bill Clinton has stopped talking on rope lines. But as a practical matter, you know, President Clinton knows that this is Hillary's week, that this is -- the big plan is for Senator Clinton and Barack Obama to come together, to do their event on Friday. They're meeting with their donors Thursday night and where she is handing over a significant amount of her donors to him and relinquishing all control, unlike what was said.
And I think that President Clinton knows that he needs to step back a little bit. There's going to be plenty of time between now and November where you can be sure that Barack Obama is going to want him to campaign for him.
But this is Hillary's week.
KING: Ed Schultz...
TANTAROS: We'll see.
KING: Ed Schultz, earlier today, Obama spoke exclusively to CNN about the Clintons and their potential involvement in the campaign.
Listen and then I want your comment.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESUMPTIVE NOMINEE: They're going to want to campaign actively on behalf of the Democratic ticket. I am going to need them. Bill Clinton is one of the most intelligent, charismatic political leaders that we've seen in a generation. And he's got a lot of wisdom to impart. And so we're going to be working very closely with him and Senator Clinton to make sure that not only do we win in November, but we actually govern in a way that delivers on the promise of universal health care, good jobs and good wages, clean energy, lower gas prices -- the things that are really going to make an impact on people's lives.
(END VIDEO CLIP)
KING: Ed, are they all going to come together?
ED SCHULTZ, PROGRESSIVE RADIO SHOW HOST: Well, they are, Larry. And it also shows that Barack Obama has tremendous leadership skills. The past is the past. He's going to implement the Clintons where he needs them. It's the smart thing to do. But I'm not trying to diss anybody here, but we have to point out that Barack Obama is starting to break out in the polls. I'm not so sure that he needs the Clintons to the extent that many Democrats think he might.
I think Barack Obama is a great manager. He proved that with his campaign. Now he's going to manage people. And notice in that sound bite with CNN, Larry, he talked about moving beyond just the election. And he's talking about using the Clintons to get some things done beyond the November election, which I think is forward thinking. And the Clintons know how powerful they are. Nobody has to stroke them.
SCHULTZ: And I think that Obama has got a plan and it sounds like a good one.
KING: Reed Dickens, how do these opponents appear to you?
REED DICKENS, FORMER PRESS SECRETARY, PRES. G.W. BUSH, SUPPORTS MCCAIN: Well...
KING: Are you up against it here?
DICKENS: Well, first of all, I think talking about polls in June is a little bit absurd because I don't think climate in June matters. Also, I think Bill Clinton is going to be a more effective campaigner on behalf of Senator Obama, probably than he was his wife. There's not as much legacy and emotion and complicating cross currents involved here. In this situation, if he wants his legacy intact, he needs to campaign really hard for Obama.
KING: As a Republican, how much do you fear that...
DICKENS: Well, I obviously...
KING: Forgetting polls.
DICKENS: Yes, no. President Clinton is a brilliant political strategist. He's an engaging individual. And I think he knows how to look at an electoral map -- which I think is one of President -- President Obama's -- Senator Obama's weaknesses.
(LAUGHTER) ROSEN: Go. You know, I think that was perfect.
KING: A bad slip.
ROSEN: I think it's pretty clear, though, that Reed is right, that Bill Clinton will be a fantastic campaigner for Obama, without kind of the emotion and the trepidation that he had with Hillary Clinton. After all, he's a validator on the two areas that Senator Obama is going to be appealing to the American people.
TANTAROS: Wait a minute. It's 17 days...
ROSEN: He's going to be appealing on the economy and he's going to be appealing on...
KING: Hold on (INAUDIBLE).
ROSEN: ...foreign affairs and Obama is going to want his imprimatur there.
TANTAROS: It's 17 days...
KING: Andrea, what were you going to say?
TANTAROS: ...after Hillary Clinton drops out of the race. Bill Clinton's enthusiasm for Barack Obama comes through his spokesman by saying that he is committed to Barack Obama?
Come on. I mean if he really was committed, the Clintons would come out, he would have come out more forcefully than going through his spokesperson 17 days later.
ROSEN: I don't think he wanted to be the story. And I don't think he needed to be the story here. I think what this is about...
TANTAROS: Well, I think he's doing Barack Obama favor by being silent.
KING: All right, hold it, ladies.
DICKENS: Yes. This is a -- I think we're reading too much into this. In the D.C. parlor game, people like to endorse on their day to endorse so that they can make news on their day. I don't think it's a matter of whether Bill Clinton will support him, but when.
KING: James Dobson is suddenly back in the picture. We'll talk about him ahead.
Don't go away.
(COMMERCIAL BREAK) KING: James Dobson back in the news today, not supporting either candidate. But he slammed Barack Obama on his Focus on the Family radio show, citing a speech that Obama gave two years ago to a liberal Christian group called "Call to Renewal". That's the name of the group.
Here's some of what Dobson had to say.
(BEGIN VIDEO CLIP)
JAMES DOBSON, FOCUS ON THE FAMILY: What the senator is saying there, in essence, is that I can't seek to pass legislation, for example, that bans partial birth abortion because there are people in the culture who don't see that as a moral issue. And if I can't get everyone to agree with me, it is undemocratic to try to pass legislation that I find offensive to the scripture.
Now that is a fruitcake interpretation of the Constitution.
(END VIDEO CLIP)
KING: Ed Schultz, is James Dobson relevant in this picture?
SCHULTZ: Well, with some people, Larry, but not as much as he used to be. And I think it needs to be pointed out he would have said the same thing about John Kerry in '04. He would be saying the same thing about Hillary Clinton. He's so predictable.
The fact is, he's out of touch with mainstream Americans. Back in '04, it was the G word -- gays, guns and God. And of course, Dobson was on the forefront pushing all that.
But in '08 it's about gas and it's about issues. And Barack Obama, who is a very moral man, has proven time and time again that he has a plan on how he wants to govern for all the people, not just the James Dobsons of the world.
I think the timing of the attack is very interesting. Barack Obama is breaking out in the polls. He's starting to get younger Evangelical Christians on his side, because they're concerned about the environment. And so I think even though he has not supporting McCain, this is what he can contribute to the rabid right.
KING: As a McCain supporter, Reed, how do you look at Dobson?
DICKENS: Well, I think there's two -- there's two different stories going on. One, it's disappointing what Dr. Dobson is doing, because out of one side of his mouth he's saying his values are more important than politics. But then he's being counterproductive and destructive to the party that has defended him and protected his values.
But Senator Obama, in this back and forth with the scripture, which is kind of an inside game, Senator Obama did one of two things. He either blatantly took some scriptures out of context, which isn't going to play well with Evangelicals, or he doesn't know the bible well enough to know he took them out of context.
And so I think if he's going after Evangelicals, Obama needs to be very careful with all this universalistic -- universalism that he's putting out there, because that's -- that's not going to play with Evangelicals.
KING: What do you think, Hilary?
ROSEN: Well, you know, I kind of like where we Democrats are on faith during this election. John McCain is clearly not comfortable talking about faith. He hasn't really demonstrated a history of being comfortable working with communities of faith. Whereas Barack Obama really has.
And as Ed points out, he has broadened the coalition. You know, we don't have to win all the Evangelicals. We just have to make a significant enough dent to matter. So when Barack Obama divides that traditional dogma of a coalition that has counted on, you know, demonizing gay people and focusing on abortion, with new issues that young Evangelicals care about, like poverty and like the environment and like the economy -- the things that they're facing in their lives -- I think that that serves us well. And I think that Dobson feels the power slipping away and he's getting a little erratic about it.
KING: Andrea, what do you think?
TANTAROS: Look, you know, I think, you know, Barack Obama here has to be very careful. And I know he made a speech two years ago, but he has made certainly religious groups very suspicious about him because of the people he's chosen to surround himself, his own spiritual adviser. That's Evangelicals, that's Catholics, that's Jews.
So it's very tricky. I mean we live in a country where everybody is allowed to interpret the bible differently. They have free speech to do so, which is great. But as a political candidate, it is extremely, extremely risky to bring in your own interpretations of the bible.
Now, I know he's comfortable talking about faith. But I don't think the Democrats should get so cocky about bringing Evangelicals in, because Barack Obama maybe an excellent orator, but Evangelicals and people of faith can see a phony a mile away. And I think he needs to be very, very careful.
SCHULTZ: I don't think that Barack Obama is -- I don't think that Barack Obama is going to fall prey to a cultural attack dog. And that's exactly what Dobson has set himself up to be. Back when Ted Haggard was having an affair with a male prostitute, it was Dobson who came out and attacked the media for doing the story. He was wrong on that.
Why isn't James Dobson telling us how good the Bush administration is?
He supported Bush.
Why isn't he out there talking about how the country is doing real well with the economy?
I mean he attacks where he thinks people are weak.
SCHULTZ: And he attacks where he feels very comfortable with his base.
KING: I have one more key question, but Reed wants to say something.
DICKENS: Yes. I actually don't think Senator Obama needs to be -- I respectfully disagree. I don't think Senator Obama needs to be careful. He's running with the wind at his back. I think that we -- I consider myself an Evangelical -- need to be careful that we are -- we can't pretend this is a Coke/Pepsi Obama/McCain election. There's no option number three. There's no Option C. And so saying that he can't in good conscience vote on McCain is destructive and counterproductive to the party.
KING: The same question for all of you. I'll start with Hilary.
Which of these candidates is better to deal with the housing market crisis?
ROSEN: Well, I think, clearly, you have John McCain, who has voted against helping homeowners, who has bailed out corporate America with tax cuts and refused to look at the mortgage foreclosure crisis for individuals. You know, Barack Obama, I think, is going to take a fresh look at this, is looking at FHA-backed loans, has worked with Congress over the last couple of months on some of their innovative ideas...
KING: All right.
ROSEN: I think Obama is clearly going to be much more progressive on this.
TANTAROS: If progressive means using taxpayer money to bail out people who made bad decisions, no. I don't think, look, over 94 percent of Americans today pay their mortgages on time. So for these people who are acting responsible and taxpayers who are paying their taxes on time, to use that money to bail out people who made bad decisions, there is no personal responsibility. I think it's a huge mistake.
TANTAROS: And look, what needs to happen now, these houses need to be put back on the market...
KING: No... TANTAROS: ...and the market needs to bottom out.
KING: The question is...
ROSEN: Let's hope that enthusiasm for the market tanking...
KING: The question...
ROSEN: ...you know, survives the Republican (INAUDIBLE).
KING: The question is...
TANTAROS: It will correct itself...
KING: Hold it.
KING: Ed, the question is...
TANTAROS: That's Economics 101.
KING: Hold it, ladies.
The question is which gentleman will better able to handle the crisis, Ed?
SCHULTZ: Well, I think Obama is, Larry, and I'll tell you why. You know, these houses aren't going anywhere. Nobody is tearing them down. The answer is a job -- and a good paying job. Whoever can come up with the best jobs program and get Americans back working in a very prosperous manner and turn this Bush unemployment rate around and also reduce the cost of living, that's what's going to help turn this mortgage crisis around.
It's paying for the houses is the key. Now, there has been some legislation that's been passed that has opened the door for predators to come in and prey on people who have got the American dream of owning a home.
KING: OK, I want to...
SCHULTZ: But it's going to have to be fourfold to get this thing done.
KING: All right.
DICKENS: Yes, it's not a president's job to legislate jobs or wealth. It is a president's job to create a climate in which the economy can prosper. And Obama's problem is he doesn't have any fresh ideas. I mean when you listen to him talk, it sounds like the late '70s. Increasing regulation and raising taxes is not an innovative idea.
And I think McCain's pro-growth policies are better.
KING: Thank you all very much.
We'll seeing lots of you, as the campaign still has three-and-a- half years to go. It seems like it.
Need answers to your mortgage questions?
Donald Trump, Robert Kiyosaki and other experts are here to help.
And we'll take you live to a foreclosure auction, where, sadly, business is booming, next on LARRY KING LIVE.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: (INAUDIBLE) 25. Now, I'm just going to stop it quickly to once again reiterate, folks, as I see those bid cards come in, I'm...
(END VIDEO CLIP)
KING: Welcome back to LARRY KING LIVE.
We'll be taking you to a live action when it gets underway.
But first, some new and startling statistics. A new index shows four years of home price increases have gone down the drain in major metropolitan areas. And according to the Case-Schiller 20 city Home Price Index, home prices for April nose-dived a record 15.3 percent from April of the prior year. This puts them back to where they stood in the summer of 2004.
There's one small ray of hope. While every city in the survey posted a year to year price drop, the pace of decline slowed in a number of cities from March to April. Meantime, more than a million U.S. homes are now in foreclosure. That's the highest rate ever recorded. It's also reported that some 10 million homeowners are stuck with homes worth less -- less than the amount of their mortgage.
Our panel, in Phoenix, Robert Kiyosaki, investor, businessman, finance advice expert and author of "Rich Dad, Poor Dad" series of books.
In New York, Barbara Corcoran, real estate expert, founder of The Corcoran Group, the New York-based real estate business, author of "Nextville: Amazing Places to Live the Rest of Your Life."
Jorge Perez is in Miami, a private real estate developer and author of "Powerhouse Principles: The Billionaire Blueprint for Real Estate Success." By the way, that includes a forward by Donald Trump. And here in Los Angeles, Michael Corbett, "Extra's" real estate correspondent, host of "Mansions and Millionaires," author of "Find It, Fix It and Flip It," and "Ready, Set, Stole!" "Sold!," rather -- so --
BARBARA CORCORAN, REAL ESTATE EXPERT, AUTHOR, "NEXTVILLE: AMAZING PLACES TO LIVE": Stole!
KING: So before you know and before you make any decisions, let's see what our panel has.
How bad is it, Robert?
ROBERT KIYOSAKI, FINANCIAL ADVICE EXPERT, AUTHOR "RICH DAD, POOR DAD" SERIES: Well, in any market, the rich are getting richer and the poor are getting poorer. So it's really bad for people who got caught during this cycle and I'm concerned about it. I think it's getting worse.
KING: Barbara, how do you view it?
CORCORAN: Well, I'm seeing this foreclosure mess as a beginning of a turn. And perhaps I sound a little too optimistic, but it's great when a lot of foreclosures hit the market, because it drags prices down not only for those foreclosures, but for every neighboring house around there. And that usually drags other buyers into the market and that begins the action that spells a recovery.
KING: So you say this is good?
CORCORAN: I think it's great. I don't think we're at the bottom. Everybody always wants to sharp shoot the real estate market. You just can't do it. The best can you do is buy at the bottom or within the bottom, so to speak. And I believe right now, with all the bad news out there, it's not going to get anymore bottom than this.
JORGE PEREZ, REAL ESTATE DEVELOPER, AUTHOR, "POWERHOUSE PRINCIPLES": I actually -- I actually agree. I think we're either at the bottom of the market or very close to the bottom of the market. And I think we might still experience some price decreases. But the decreases that you talked about in the last study are really not correct. I mean a lot of that -- a lot of the sample that you referred to is using foreclosure. And foreclosures, of course, reduce the prices.
It is a very bad market, but I think we're getting very, very close to the bottom.
KING: What's the biggest mistake people are making, Michael?
MICHAEL CORBETT, REAL ESTATE CORRESPONDENT, "EXTRA," AUTHOR, "READY, SET, SOLD!": You know, I think one of the biggest mistakes people have made is over the past few years they've been buying these properties with creative financing. And that's what's put us in a lot of trouble right now, is that a lot of people have been buying with zero down, 5 percent loans.
KING: Because that's appealing, isn't it?
CORBETT: Because it's very appealing. And it got people into -- it got people into the market that really couldn't afford the properties that they were getting. These interest only loans that are now coming due is really what's getting a lot of people in a lot of trouble right now.
KING: Was the mortgage holder at fault, Robert, the people who give out the mortgages?
KIYOSAKI: They were partially to blame. But, also, it's a lack of financial education. You know, I mean, between 1995 and 2005 was a great time to be a flipper, but now is not the time to be jumping in, just because foreclosures are in.
Just because foreclosures are in vogue, how do you know a good foreclosure from a bad one?
So you still have got to be educated. So it's the uneducated that are getting nailed right now.
KING: Barbara, is the answer jobs? What? What do people do?
CORCORAN: Well, you know, jobs and real estate are kissing cousins. You have bad jobs, you have bad real estate. You don't need this kind of a bad cycle to recognize that.
But people today have many more options -- even people facing foreclosures that are on the brink of jumping out of their house and just leaving the house behind. People have so many options. And if they just remember one simple principle, which is the bank does not want your house back. It's so empowering for people to know that, because banks will deal with needy buyers today, because they don't want your house.
KING: Do you agree, Michael?
CORBETT: Yes, absolutely. And, you know, I was speaking with someone at the Housing and Urban Development Department. And it's a shocking statistic that 57 percent of people who receive default notices don't do anything. It's really amazing that people have a lot of options, as Barbara was saying.
KING: Because the bank doesn't want it?
CORBETT: The bank does not want it back. And there are -- there are a lot of options for people out there.
KING: Jorge, we have an e-mail question from S.O.S. In California. A pretty good way to write it: "I got a condo in April of 2005 for $500,000. Now it's only worth about $400,000. Could I refinance it to get a better interest rate or should I try to negotiate with the mortgage company to adjust the payment? PEREZ: I would definitely negotiate with the mortgage company. I think what they said previously is the correct thing. I mean lenders are having tremendous problems right now. They have a huge amount of REOs, you know, real estate owned properties, and they do not want your house or condominium.
We are advising all the people that we know that have those problems to go talk to their lenders and they will talk to their lenders.
I think one of the biggest problems, nevertheless, is that a lot of people borrowed on variable rate interests when they had come-on (ph) mortgages at 1 and 2 percent that grew up over time. And their jobs have not gotten better and now they're paying much higher interest rates than when they got their mortgages. And this is a big, big problem in real estate today.
But definitely go and negotiate, renegotiate with your lender.
KING: Good advice.
Next, Donald Trump joins us. And wait until you hear what he has to say about this. He will not pull any punches.
You're watching LARRY KING LIVE.
KING: Have you or are you in danger of losing your home to foreclosure? Just go to CNN.com/larryking and cast your Quick Vote. Tell us all about it.
Joining our panel now on the phone, my good friend Donald Trump. I have to tell you who he is, you have major problems.
Donald, what's your read on what's happening?
DONALD TRUMP, REAL ESTATE MOGUL: Well, the market is absolutely terrible. Outside a place like Manhattan, where for some reason it continues to be good, and I think that's really the cheap dollar, the low dollar. If the dollar becomes stronger, perhaps Manhattan has problems, perhaps it doesn't. It's unique. But the Manhattan market continues to be strong.
A place like Palm Beach, Florida, is unbelievably strong but that's a little sub-market, relatively speaking. Generally the market is absolutely terrible throughout the United States.
KING: And what's the cause?
TRUMP: Well, I think the cause to a certain extent is leadership. The cause is the fact that oil is hitting record highs every day. And, you know, I just got back from the Middle East and places like Qatar and Abu Dhabi and Dubai are booming. We just opened a new building. We were doing a building in Dubai that is setting records. And, you know, outside of the United States places are doing very well. You go to Russia, India, China, they are setting records and this country is like a laughing stock.
KING: Why, Donald -- I'm a neophyte here. Why would a mortgage company give a mortgage to someone who can't qualify?
TRUMP: Well, because they were looking to make deals. They are getting paid percentages based on the amount of output that they put out, and these people were making a fortune. But now all of a sudden it comes home to roost. And what's going on, I've never seen anything like it. I will say this, however, that's not a big majority cases, but there have been plenty of those deals made. You can go out right now and see your bank and negotiate a new deal. The last thing the bank wants is your house.
And as George said, and as the rest of your panel -- and I know the panel. They are all friends of mine. They are great. But as they have all been saying, this is the time. Go to your lender and make a new deal. You can all make a new deal with the lender. They do not want your house.
KING: In other words, you have power?
TRUMP: You do have power, you know. It's interesting when they were first taking over the houses and they had some -- they had some power and they said, oh, we're going to take over the house and we're going to sell it. Well, the fact is those houses were taken over. Vandals came in. You know, the first thing they do is hire security and then the security robs the house. And if the security doesn't rob it, somebody else does. So they want you staying in your house and you can go and now make a very good deal with your lender.
KING: Is it true that you sell a house for 100 million dollars?
TRUMP: Yes, just last week, in Palm Beach, Florida. I bought a house at a bankruptcy a short while ago for 39, 40 million dollars, and I just sold it for 100 million dollars.
KING: All right. Robert, I know that you've written with Donald Trump and you're a close friend. What do you make of what he has to say?
KIYOSAKI: Well, you have to understand the messenger. Donald Trump has spent his life as a real estate developer, investor. He's a very smart man and I think you've got the fact of that in. My whole point is, if you don't know what you're doing, this is really not the time to jump in, because this is same as people jumped in when you could get a loan for anything.
Donald is a very smart man. He knows what he's talking about, as do most of the -- as does the panel. So I would listen to their advice, but you still have to look at yourself in the mirror and, you know, do you know what you're doing? If you don't know, don't jump in right now.
KING: Barbara, do you not compete with Donald?
CORCORAN: How could I not compete with his ego? I'd have to be born maybe three or four times and beef myself up and get a new hairdo. How could I compete with that man? Thanks to him, I sold more property in Manhattan. And he single handedly -- and I don't like to give him too many compliments, because he sure doesn't need it. But he single handedly turned the whole image of Manhattan around back in the 1970s, when nobody wanted to live in New York. How can I compete with a guy like that? Besides which, he's a heck of a lot richer.
KING: Do you agree with what he's saying?
CORCORAN: You mean, about that big sale he made. I'm sure it's exaggerated. Donald exaggerates everything he talks about. Let's say it's half true. OK, so it's half true. All right, but he's a wheeler dealer and to Mr. Kiyosaki -- and I mispronounce your name every time. Forgive me. Use say it, I'll mimic it, OK. To his point, not knowing what you're doing is suicide in any real estate cycle. But right now, I believe any guy on any street knows his own marketplace well.
If he looks to the towns that he knows, that he lives in, that he knows what the good block is, the bad block is; this is a time for opportunity, where you can buy your neighbor's house on the cheap if only you're alert enough to hear the bell ringing that you got cheap money, tons of inventory and there's nothing to stop people from make the fortunes Donald was able to make, because these are the good old days that we've all been hoping for and dreaming about.
KING: Got you. Jorge, do you agree with Donald?
PEREZ: Yes, I agree with everything that Donald said. I think the market is terrible. You know, I'm partners with Donald in a couple of projects that we're doing quite well. So different markets and different people, there's differentiations. Nevertheless, I don't agree with the statement that was saying that this is the time to stay away from the market. I think the best time to go to the market is when the markets are down. And as I said before, the markets have either hit the bottom or they are very, very close to hitting the bottom. And I think today is the time where you can make deals with lenders and you can make deals in buying.
KING: Everybody is saying that. Michael, do you agree?
CORBETT: I agree and I've worked with Donald where I've actually heard him say, buy when everyone sells selling, and it's really true. I think in the next coming months, the next six months, there's going to be a lot of opportunities out there.
KING: Donald, can you stay with us a little while?
TRUMP: Yes, I can.
KING: Next, what you must know before you make any decisions about buying, selling or walking away from a home. And still ahead, a live foreclosure auction. Don't go away.
(COMMERCIAL BREAK) KING: We're back with our group. Donald, we have an e-mail question from Debbie in Orlando, Florida: "What's a family to do if they lose their home to foreclosure? How can they find a suitable place to live? Aren't they going to be rejected as renters on grounds of poor credit?"
TRUMP: I think that's an over-exaggeration because so many people are worried about their reports and the reports are that you have to live. And as George was saying, George Perez, or as Barbara was saying, this is the time to go out and buy something.
This is now the time to go out and try making a deal, try buying a house. The banks are there. It's already financed. You don't really need the money because it's already financed. They are already in. They are already wet. So this is the time to go out, whether it's rent -- and I don't recommend renting now. I recommend now is the time to buy. Buying is much better than renting.
KING: Even if you've been foreclosed?
TRUMP: Absolutely. You can make deals. So many people are being foreclosed, Larry, millions and millions of people. It's no longer got that horrible stigma. This is the time to go out and make a deal. The money has already been put in. It's not like they are putting in new money. The money has already been put in. They own a house. They want somebody to live in that house.
KING: In view of all of this, I don't know if you have, have you endorsed a candidate?
TRUMP: Well, I'm going to very shortly. They have been asking me that question quite a bit, actually. And I'm going to very shortly.
KING: Want to give me a hint?
KING: Robert, I have an e-mail question -- thanks, Donald. We have an e-mail question for Robert from Tim in Little Rock; "I know people who bought new homes with no money down and no job. Should we reward this kind of thoughtlessness, irresponsible action with sympathy or any kind of financial bailout?"
KIYOSAKI: Well, we should have sympathy, but I don't think we should reward stupidity. So that's basically my big thing. You know, right now I agree with everybody. It's really a good time to get in if you know what you're doing. But it's not a time to get in just to try to get rich. That's not the time. And it's not a time to reward people for incompetence.
So I agree with Donald. If you have bad credit, which I have had -- I've had my own financial trials. But if you go and sit down with a banker and you're a responsible citizen, I think they will allow you to buy. But if you're still irresponsible and still unknowledgeable, they shouldn't lend you any money. KING: Barbara, is this a good time to sell a house?
CORCORAN: Come on, Larry. You could answer that and you can ask anybody. Of course it's not a good time to sell a house. The question is, if you must sell a house, how do you unload it, considering the enormous competition that's out there.
KING: Suppose you have to sell, you're moving.
CORCORAN: There's one way you can always sell a house in any old market. You can intentionally under-price it. If you go out to your own marketplace and intentionally under-price your home 20 percent to 25 percent less than you think it's worth, or that a credible appraiser tells you it's worth, you will sell that house within the week. There's no such a thing as an unsellable house. It's always a question of numbers.
KING: Are you optimistic, Jorge?
PEREZ: Yes. I think in the long run I'm optimistic. The Baby Boomers are here. The basics, you know, of the U.S. economy is good. I think Donald mention that had we have to become a lot more competitive in the world market. But the United States has always been able to bounce back, you know. I'm not saying that I'm not concerned. I'm very concerned. I'm concerned every day. But I think that the numbers are there.
We oversupplied. We had probably the best seven years that I can remember in the real estate business. And every time that we had boom periods, they are followed by busts, you know. So this is something that anybody in the real estate business has to have been expecting, you know. I think we are going to see, you know, the slow down take care of itself in the next two or three years.
And I think afterwards, you know, demand is still going to be there. I think people are looking to invest in the United States, you know. So particularly in places like Florida, you know, I am very optimistic over the long term.
KING: Michael, who by the way is extra celebrity real estate correspondent, want to get that, what's the biggest mistake people facing foreclosures make?
CORBETT: One thing I actually want to address, Barbara made a really good point; you can sell your house if you need to. You can sell a house in this marked. And the biggest mistake people make when trying to sell it is in pricing. Absolutely, you want to price under the market. But the biggest mistake that home sellers are making right now is they are pricing their house compared to what's on the market. The key is don't look at what hasn't sold, look at what has sold. You cannot compare what's on the market sitting right now to make your pricing. You have to compare with what has sold.
KING: We'll get some calls in, too, right after the break.
(COMMERCIAL BREAK) KING: We're going to go now to a foreclosure action that's being run by the Real Estate Disposition Corporation in Bakersfield, California. That's a company that Donald Trump knows pretty well because you've been involved with them, haven't you Donald?
TRUMP: I've known them and done some work for them and made some speeches for them and I hear they are excellent.
KING: Down there is Tracy and Daniel Stewart. Trace is the only one that's mic'd, so we'll talk with her. What are you doing at the auction, Tracy?
TRACY STEWART, HOME BUYER: We're trying to buy a house. We're looking to buy a house.
KING: Well, I don't hear Tracy. We're having trouble -- I'll try to reconnect. I can't hear Tracy. We'll reconnect with that. There's one question I asked, Michael, that we didn't cover and that's what's the biggest mistake people facing foreclosure make?
CORBETT: You know, the biggest mistake right now is when you get that default notice, if you ignore, biggest mistake you can make. People think that if they just ignore it, it will buy them more time. It's absolutely the opposite. The first thing they should do when they get those notices is contact either the lender or go to HUD, get a certified counselor. There's free counseling out there for people, because if you just go ahead and ignore these notices, they automatically trigger legal action. And that moves it faster. If you want to buy some time, call the lender, call a counselor.
KING: Let's get a call, Phoenix, Arizona -- hello.
CALLER: Hi, I'm in a variable rate and I have an attorney telling me to pay him 3,000 and he'll negotiate the fixed rate, versus me dealing with the lender. What's the way to go?
KING: Robert, what should she do?
KIYOSAKI: Probably get another attorney. I really don't know. She would have to get a second opinion.
KING: Does that sound like a rip off, Barbara?
CORCORAN: It sounds like a rip off to me. And I think just by virtue of the fact that she's questioning this tells me that she knows it's a rip off. So why even go there. You can call the bank. The key to calling the bank, however, is not speaking to a loan officer but asking for the work out department. Those are the people there that can make the decision as to whether they are going to renegotiate your loan. So you can pick up the phone and do it yourself, so there's no need for the attorney in that position.
KING: Donald, you deal with banks all the time and have all your adult life. There's a general fear on the part of the average person, fear to deal with a bank. Is that warranted or not? TRUMP: Obviously, some banks are not good, and they are not nice people. And other banks are very good and they are very nice people and they want to see something positive happen. It's a very tough position people are in. Two years ago, their house was worth a half a million dollars and today it's worth 250,000 dollars, and then you ask a question about selling. And psychologically, it's very hard to sell something for half. You felt rich two years ago. All of a sudden, they are getting killed.
So, you know, it is a very, very tough hurdle. But I say call up your banker. This lawyer, whoever it is asking for 3,000, he ought to do a great job and get some kind of a bonus if he does a great job. But I would absolutely get rid of this attorney, although probably a great negotiator if he can negotiate as well for you as for himself.
KING: Tuscaloosa, Alabama, hello.
CALLER: Hi. I have a loan with Countrywide and they will not refinance our interest only loan, because they say our debt to income ratio is too high, and their work out department won't even look at us because we've never been behind on our mortgage and we're not currently behind. It's going to reset in August. What can we do?
CORBETT: Unfortunately, Larry, a lot of the mortgage companies and the banks don't want to talk to you. It's very sad, until you're actually in arrears. They really -- their loss mitigation or their workout department, they don't want to help you until you're two months or three months in debt.
KING: Work out doesn't mean a treadmill.
CORBETT: No, it doesn't. It's sometimes called the lost mitigation.
KING: Barbara has a solution.
CORCORAN: I have a solution and it's a fall back solution, but it sure gets attention. You can make an appointment or not make an appointment, go over there with the deed to your property and the keys to your front door and say, OK, I've had it. Here's my deed. Here's my keys and you'll get attention.
One other thing, you should always put your requests by certified mail. By law, the banks don't have to answer phone calls. But by law, they have to answer certified mail, and a lot of people don't use it.
KING: Barbara is on a roll here tonight. Barbara touched on it. Is there an upside to the down housing market. We'll ask. Let's hope so.
KING: Jorge, do you agree with Barbara there's an upside in a down market?
Jorge? OK, Jorge doesn't hear me.
Donald, do you agree?
TRUMP: I do agree with Barbara. I think that this is a great opportunity to buy. And, unfortunately, not everybody is in that position because they have seen erosion. But if you're out there and you have some cash, this is a fantastic time to buy. And even if you don't have cash, this is the time to buy because you can make deals with banks.
KING: Well put. Bow, New Hampshire, we'll take another call. Hello.
CALLER: If you would like to make a call --
KING: Mother told me there would be nights like this and I'm experiencing it. We've lost Jorge. We don't have the woman in the foreclosure woman. We've got Donald on the phone. We've got Barbara here and Michael here. All right, can government, Michael, do anything?
CORBETT: You know what? I think it's really important, as Robert was saying earlier, it's really -- it's not correct to actually help the people that have made the mistakes in the past. It's -- but, unfortunately, now we need to, because we're -- we need to bail people out, because what that does, it's a domino effect, and it trickles down to the rest of the market.
KING: Do you agree, Robert, or not?
KIYOSAKI: Well, I have a more positive attitude towards it. Back in the '80s, I got my butt kicked in the market. That's when interest rates were about 18 percent to 20 percent and I was trying to make deals at 18 percent to 20 percent. And it really taught me a good lesson that I had to get smarter. So when I got pounded in the late '70s and early '80s, I at that point said I better get smarter and today I have made millions of dollars because of a bad experience.
But if you're not -- if you don't learn from the experience and you think the government is going to bail you out, then you've wasted a big opportunity to learn something.
KING: Donald, what can government do?
TRUMP: Well, I think the market is correcting itself, Larry, and government is very big and very complex. But the project and the problem is very complex. And I actually think government really has to stay out. There's not a lot they can do. The market is correcting. It's going to work out. It's a great time to buy. It's a great time to make deals.
KING: Jorge, can the state of Florida do something?
PEREZ: Yes, I hate to disagree with my good friend Donald. I'm a Democrat, and I think that one of the problems that we have with housing is that housing prices have out-paced the ability for many, many, many Americans to afford it. And I think that government has to play, both the federal government and the state government, a very, very crucial role in making housing affordability a reality for many Americans that can't afford it.
CORCORAN: Yes. Can I say something.
KING: Sure, go ahead, Barbara.
CORCORAN: OK, I happen to differ with everyone on just that single point. I happen to think that people who are having foreclosure problems are not free loaders. They are not reckless people. They are responsible people, the large majority of them. And I think it's the total obligation of our government to come in and join hands with the banks and figure a solution, even if it's nothing more than guaranteeing the mortgage to the bank if they will only renegotiate quickly with all these homeowners to keep the homeowner intact.
I just don't see these people as irresponsible or bad people or bad guys in any way. And I think the government should be ashamed that these programs haven't been approved and move out of Washington and help the people really where they need it immediately in reworking their mortgages. I don't get it. I just don't get it.
CORBETT: Larry, the other part of where it really will be a silver lining in one way is, just as Robert was saying, how in the '80s he learned a lesson. What this is going to do for the home buyer, home investor and the real estate investor, it's going to teach people we have to be smarter when we're buying. We can't be doing it with these old rules. There's a new set of rules out there in how to buy and how to buy smart.
This is a correction in the market. When there are people that cannot afford the average home price, it needs to come down so people can get in the market and start buying again.
KING: Donald, we're almost out of time. How is commercial real estate doing?
TRUMP: Well, in Manhattan, again, it's doing very well. In certain other locations, it's doing very well. It's not in the same problem as residential real estate, not nearly as bad.
KING: Thanks Donald.
Thanks to all our guests.
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