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CNN LARRY KING LIVE
Celebrity Divorce: Brinkley vs. Cook; Financial Advice from Suze Orman
Aired July 8, 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: Divorce wars showdown exclusive.
(BEGIN VIDEO CLIP)
CHRISTIE BRINKLEY, MODEL/ACTRESS: I've always hoped to be able to settle these matters privately, outside of the courtroom.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
PETER COOK, ESTRANGED HUSBAND OF CHRISTIE BRINKLEY: It's a family matter, a private matter. It should stay that way. Unfortunately, Miss. Brinkley doesn't seem to share that view.
(END VIDEO CLIP)
KING: Christie Brinkley's attorney squares off with the lawyer for her estranged husband, Peter Cook, for the first time outside the courtroom. Hear what they think about a psychiatrist's testimony today that both their clients need therapy.
Plus, Suze Orman -- desperate consumers forced to make tough decisions and they want answers.
When will the economic crisis end? How much longer can they go on cutting costs? Can Suze save you from a home foreclosure?
Get your questions ready. She's taking calls next on LARRY KING LIVE.
The headline grabbing divorce trial of cover girl Christie Brinkley and architect Peter Cook continued today in a New York courtroom. Taking the stand, a court-appointed psychiatrist, who testified that while Brinkley should get custody of her two youngest children, both she and her soon to be ex-husband need therapy.
We begin with Norman Sheresky, attorney for Peter Cook.
How is your client hdlg all this, Norman?
NORMAN SHERESKY, ATTORNEY FOR PETER COOK: Well, I think he's pretty sad but he's handling it pretty well. But this -- this is a tragedy, so he recognizes this is no good for his kids. KING: Is this a divorce that he wants?
SHERESKY: Oh, yes. I think it's time. Everybody realizes that this marriage is over. He offered a divorce, you know, Larry, two years ago. He said I did something bad, if you want a divorce, you can have it. And instead, Miss. Brinkley decided that she wanted to have the divorce in public and she wanted to air all of the dirty laundry. And, you know, that's no good for children. It's unusual. But it's here.
KING: Well, what is your client -- what's Peter asking for in terms of custody?
SHERESKY: You know, custody is a funny word. I don't know that Peter wants custody, as a word. He wants a lot of access to his kids. He wants his wife to stop bad-mouthing him. And it's all strange to him. This is a woman who has, for 10 years, in articles that -- in magazines and in letters to him has called him the greatest dad there ever was. And, unfortunately, you know, Peter did something bad and she wants nothing but payback. And she wants revenge. And it's about as vicious a case as I have ever seen.
Explain the two children. One is his biological daughter. The boy, though, is Christie's by a previous marriage, but Peter adopted him, is that right?
SHERESKY: That's absolutely correct. And not only that...
KING: Who is...
SHERESKY: And not only that, but Christie -- this is Miss. Brinkley's, as you know, fourth marriage. She also has a daughter by a prior husband, Billy Joel. And Peter was a stepfather to that child. And, again, in letters, in writing, Christie Brinkley, during the marriage, extolled what a wonderful father and what a wonderful stepfather he was.
Now, of course, she found out about this affair, for which he has apologized again and again and again. And she just wants revenge. She's a scorned woman wanting revenge. It's a sad, sad situation.
KING: Norman, what's your reaction?
The court-appointed psychiatrist, Dr. Stephen Herman, says Peter is "A narcissistic, self-destructive man who needs constant reassurance that he is a terrific guy."
How did you react to that?
SHERESKY: Larry, I think I have a lot of respect for that court- appointed psychiatrist. You're leaving out most of what he said. He said that this guy is a terrific father and always has been a father; that this guy is almost a model for a terrific father and that he should have a lot of access. And that, by the way, the mother, Christie Brinkley, should do a lot of things -- none of which she's done.
She needs a psychiatrist. She needs a psychiatrist for her. She needs a psychiatrist for her children, which she has not -- sort of discontinued. She has not done anything that the psychiatrist said that she should do.
But the bottom line of what the doctor said is that Peter and she are bonded to these children and that it is of the utmost importance -- that's what he said -- that these children have both a mother and a father and that they have a lot of access to each other.
And you know, Christie Brinkley doesn't want to follow anything that this doctor has said. We wouldn't be here if she did.
KING: Who's watching the kids?
SHERESKY: The kids -- well, the kids are in camp right now. But I daresay they weren't in camp all this time. And they're going to come back from camp. And they're going to face this tremendous amount of publicity. This courtroom is open, Larry. And it's open both because the judge was compelled to keep it open, but probably more so because Christie Brinkley said she wanted it open.
Why would you invite your children to your divorce?
KING: What is -- what is Peter's goal, Norman?
SHERESKY: Plenty of access to his children, lack of interference by Christie Brinkley. She should stop bad-mouthing him. That has to stop. She should get some psychiatric help. And the answer is that they were -- you know, they were wonderful parents. They brought these kids up. They were an ideal couple.
What has happened here is that she found out about an affair, she found out that he went on the Internet. And since that time, you know, she has just been bashing him and bashing him and bashing him. Larry, it's been two years now. She has not lessened her hatred or her revenge one bit. Not one bit.
KING: Norm will be back with in segment three.
We'll have Bob Cohen, her attorney, on with us.
They'll not be on together, but they'll respond to each other.
And Norman Sheresky will return in a couple of minutes.
We'll be back with Bob Cohen, the attorney for Christie Brinkley, right after this.
(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: An emotional testimony. The former supermodel repeatedly broke down, crying as she described learning about the infidelity from the girl's father.
Given how sordid the details are, why would they want to take this case to court?
(END VIDEO CLIP)
KING: And joining us now in Islandia, New York is Bob Cohen, the attorney for Christie Brinkley.
Bob, anything you want to say in response to what Norm just said?
BOB COHEN, ATTORNEY FOR CHRISTIE BRINKLEY: Hi, Larry.
COHEN: Yes. I would like to start by saying that I'm fortunate enough to teach at the University of Pennsylvania Law School. And I tell my students -- and, of course, in divorce law, that if you have the law on your side, you pound the table at the law and if you have the facts, you pound the table at the facts. And if you don't have anything, you pound the table. And that's what Norman has just done, Larry.
I mean this case is so one-sided. You asked him -- curiously enough, you asked him what does Peter really want, does he want custody here?
And the fact is this case is where it is today because Peter has asked for custody of these kids. There is nobody that's more unfit to be a custodial parent in the courts today that I know than Peter Cook.
KING: All right. You're saying if he didn't ask...
COHEN: Larry, that's where we start from.
KING: Are you saying, Bob, if he didn't ask for custody, you wouldn't be in court today?
COHEN: That's probably so. Although, he's also trying to get money from Christie. And the fact is -- and it's quite undisputed -- that for 10 years, he never made a penny of contribution to Christie's home for any payment -- for schools, for camps, never a penny. All the while, by the way, as you noted at the beginning of the show, he's a successful architect.
Yes, his greed not only goes with respect to the children, but it goes with respect to money, as well.
KING: But your client, in the past, has called him a -- just the greatest father.
COHEN: Larry, she did that. She did that years ago when she thought he was the greatest father, frankly. But as the testimony has come out in this case, not only did he have an affair -- you know, that's how Norman couches it. This is not an affair. He hit on a woman who was barely out of high school, actually. I think she was still in high school when he started hitting on her. And then started a long romance with an 18-year-old, running all over Long Island and Brooklyn looking for her.
All the while, he was supposed to be such a great father.
So the answer to your question really is that yes, in magazines, in connection with interviews she was giving, yes, she said some nice things about him. But it was before she knew what a tragedy she had with her marriage and what a tragedy, frankly, the whole family had (INAUDIBLE)...
KING: What's your reaction...
COHEN: ...from what Peter did.
KING: What's your reaction to the psychiatrist saying that she needs a lot of help, too?
COHEN: Larry, I have never had a divorce case -- and I've been doing this for a while, not as long as Norman has, but I've been doing it for a while. I've never had a divorce case where I didn't think the people could use some help to get through the process. It's a trauma. It's not easy to go through a divorce, especially where there are kids.
So the answer to that is he said while he thinks she should have some therapy, he thinks he should have some therapy. The children have had some therapy. And we're getting through that notion.
But it can't undo what Peter has done here. So that's just the reality.
KING: Why, Bob, since it happened quite a while ago, why hasn't that emotion stemmed a little?
And so why is she going so public with this? What -- she wants this public trial. Why?
COHEN: Well, Larry, I think that's a really good question. First of all, there hasn't been a case -- a custody case in New York that's been closed to the public for years and years and years, because embedded in our law is the media's right -- your right and the journalist's rights to have an open courtroom. So it's not Christie that has anything to do with closing the courtroom. It's Judge Cohen and the Suffolk County Supreme Court who is determined -- by the way, not only has the court decided, but the media -- lawyers presented a case to Judge Cohen as to why it should be open.
And now the reason why it's open. The reason why it's open is not only because the law requires it, because for a couple of years, Peter and whomever -- and his team, have been leaking information about this case and giving their spin on the case. And it's very easy to do that. A court of law is a wonderful opportunity for people to tell the truth and for the search for the truth. And so that's all that Christie has wanted from the beginning.
KING: What about...
COHEN: It wasn't a public trial, it was the search for truth.
KING: What about the damage to the children?
COHEN: The damage for the children, unfortunately, occurred not as a result of any publicity. Because the publicity started when Peter's then 18-year-old girlfriend held a press conference in July of '06 to talk about what happened between her and Peter over the course of a long time. And then what happened is -- and talk about closed courtrooms -- Peter wanted not only a closed courtroom, but he paid the girlfriend $300,000. This is a young woman whose only experience before she met Peter, as she testified, was babysitting and working in a toy store in South Hampton, Long Island.
He paid her $300,000 to get a gag order out of her. So, sure he wants it secret. But what he should have thought of -- and the thing that troubles me mostly is what he should have thought of while he was doing what he was doing, not only having an affair with this young woman, but going on the worldwide came. And, frankly, this is a general audience program. And what he did on that Internet, in interactive sex with women and with prostitutes and one-on-one, is -- is so shameful.
And the notion that he never thought -- remember, every time you send a send button on an e-mail, there's a permanent record. Every time you go on the Internet and you get into porn with other people, there's a permanent record.
COHEN: The notion that he would do that and not think about the consequences is, frankly, mind-boggling to me.
KING: Now, what we're going to do now is take a break. And then Norm Sheresky will come back and he'll comment. And then Bob Cohen will return after Mr. Sheresky, as the attorneys respond to each other.
Don't go away.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: All right, talk a little. Come on.
BRINKLEY: No comment. (INAUDIBLE) for my testimony. Thank you.
(END VIDEO CLIP)
UNIDENTIFIED MALE: (INAUDIBLE).
UNIDENTIFIED MALE: It's a family matter, a private matter. It should stay that way. Unfortunately, Miss. Brinkley doesn't seem to share that view.
(END VIDEO CLIP)
(BEGIN VIDEO CLIP)
BRINKLEY: I've always hoped to be able to settle these matters privately outside of the courtroom. And I continue to hope that that will be the case.
(END VIDEO CLIP)
KING: Norman Sheresky now rejoins us.
Anything you want to comment on what Bob Cohen just said, Norm?
SHERESKY: Yes, thanks, Larry, I do.
Well, you know, I hope Bob, who is a very good lawyer, isn't teaching his class to spin a case like this one.
The fact is there has been no publicity in this case for two years. What brought on the publicity was this motion, joined in -- by the way, made by the guardians of the children. The children's lawyer made an application to the court and said if you keep this court open, you might just as well invite these two children into the court with me. Please don't do it.
And Christie Brinkley said no, I want an open court. And she said it again yesterday. She wants, she said, the truth to come out, which is bull.
What she wants to do is to get even with Peter for something that he did two years ago.
And it is the psychiatrist who says this is why she needs a psychiatrist. She can't get rid of her anger.
She will not co-parent with him. She won't tell him about what's going on in the children's lives. She sends him the nastiest e-mails. She's told the children about his affair. She is the epitome of a bad mother.
And what is so strange is that these two were at -- were terrific parents.
What is the stumbling block in this case is simply that Christie Brinkley is really ticked off. And, by the way, she had plenty of reason to be mad. Nobody said she shouldn't be mad. Nobody said she shouldn't -- she'll never talk to Peter again. But she has chosen one path not open to her, which is to put the children in front of her.
KING: Norm, is this settle-able? SHERESKY: So that's kind of...
KING: Is this settle-able?
SHERESKY: You know, there have been some attempts, but we're very far away from that. And I'm like Bob, money is not in the way and greed is not in the way. It's access to the children that's in the way and it's making sure that Christie Brinkley stop doing what she's doing.
KING: Where does this rank among cases you've tried?
SHERESKY: It's about as vicious as any case I've tried. And I guess I've tried as many custody cases as any lawyer in New York. It's just vicious and it's unnecessary. And like all the rest, Larry, it's sad. It's just sad.
KING: Is there now a lot of hatred on Peter's part?
SHERESKY: I don't think so. No. There isn't at all. Peter wants to co-parent. Peter wants to say I'm sorry. Peter has said he's sorry. Peter wishes her happy birthday. Peter -- you know, Peter extends the olive branch every way he possibly can.
The problem is Christie Brinkley wants to punish him. It's payback time. And it's two years, Larry.
SHERESKY: So there is...
KING: All right, Norman, thanks for your time. We appreciate it.
SHERESKY: Thank you so much.
KING: Norman Sheresky, the attorney for Peter Cook.
Now we return with Bob Cohen, the attorney for Christie Brinkley.
When he says that Peter wants to get this over with, he's sorry, he's been sorry for two years, why now, Bob? Why now?
COHEN: If Peter wanted to get this over with, he knew well how to get over the -- over this case. The notion that out of the box he sought custody out of these children -- and, frankly, continues to seek custody and continues to seek significant sums of money.
Look, Norman -- I've made Norman an offer. This is a vicious case. This is, I agree with Norman, the most difficult custody case that I've ever tried.
And I've made an offer to Norman. And he's still on the line. I'll continue that offer. This case should be tried in the courtroom. It shouldn't be tried all over the media. It shouldn't be tried with statements to the press. And it shouldn't be...
KING: What's your offer?
COHEN: My offer to Norman is this -- was starting last week, we both agree there will be no statements to the media, no statements to the press. Let's keep our attention in the courtroom and let's try the case.
I haven't been able to get Norman to agree to that. And I'm prepared to again make that offer to him on national TV and say, Norman, let's stop it. Let's continue the case in the courtroom.
I wish -- I wish we could settle this case. It disappoints me. Every day I ask Norman, can we settle this case?
And I learned today, just a few minutes ago, that we're very far apart and settlement is impossible. Well, that's too bad.
And, Larry, the other thing that I think is very important here is that the forensic psychiatrist's report that was issued -- and the forensic psychiatrist spoke today. And he found significant pathology on Peter's side. He found Peter to be a characterological (ph) narcissist, which means embedded in his very being is the fact that he comes first. His ego satisfaction comes first.
And, on the other hand, he found Christie to be perfectly normal. Yes, he found her to be angry.
But does it surprise you that a wife who had given as she had given -- and Norman called her a wonderful mother and he called her a wonderful wife.
Does it surprise anybody that she would be angry?
He has seen every bit of the access time and the parenting time that he has. He sees the children on weekends. He sees the children during the week. Before all of this started, in the throes of all of this press, he came by and she let him see the children.
This is a spin, the notion that her anger is some way getting involved or in the way of his rights with the children. It's just not happening.
So, Norman, I ask you once again. Let's go back to the courtroom, finish this trial, stay away from the media. Let Larry King have had the real -- the last opportunity to have us on the air and let's go back and finish this case. That's the way...
KING: We had a...
COHEN: ...that's where this case should be finished.
KING: We had agreed that you wouldn't be on together, so I'm not going to ask Norm to break that and come back and respond to that non- public.
KING: But maybe he'll choose to later or after the show or tomorrow and agree with you and not go public anymore.
COHEN: He'll see me in court in the morning. I'm sorry.
KING: All right. Maybe...
COHEN: And he'll see me in the morning and I'd welcome that.
KING: All right.
We've got one other quick thing, Bob.
How do you see all of this ending?
COHEN: I see it ending in 10 days or so. I think what Peter wishes, which is custody, he's the only person that I know that's involved in this trial. Of course, there's the judge. And he's going to make the ultimate decision.
But I think Peter's not going to get custody of these wonderful children.
COHEN: I think he's going to get time with the children, which is just what Christie wants. And the money issues are complicated.
KING: Thank you. Thank you, Bob.
And thank you, Norman, for being with us.
COHEN: Thank you.
KING: A fascinating half hour.
TV judges Joe Brown and Christina Perez have been watching all of this and we'll get their take on this incredible case next.
KING: Tomorrow night, Ingrid Betancourt, exclusive first American television appearance, on this program tomorrow night.
Let's get back to the Brinkley case. Judge Joe Brown, he presides over his own reality court room show, as does Judge Cristina Perez, an Emmie Award winning host of "Cristina's Court."
OK Cristina, is this as bad as it gets?
CRISTINA PEREZ, "CHRISTINA'S COURT": I think, unfortunately, it could get worse. But in this case, I think we've seen this, what possible justification does she have to punish her children this way? In both of them, it's very sad to see. We see these human dramas, these tortured souls. We see them on "Cristina's Court." Every day we see this. But what she's doing here is that -- enough, you made a mistake. You picked him. You lived with him. Live with that mistake. KING: Is the judge between a rock and a hard place, Judge Brown?
JUDGE JOE BROWN, HOST, "JUDGE JOE BROWN": I think the judge should have kept this closed. For the interest of the children, this shouldn't have been allowed to go public. I think Cohen either is trying to drum up future business, I'll be candid, or else he's done the class if you let your client get out of control. You don't let that happen. This should not be exposed to the public.
Everything that's come out these children will eventually wind up seeing. And that's not the type of thing you will need to let them see. And the plaintiff, Ms. Brinkley, Mrs. Cook has enough going against her from what people used to think was a scandal, with models appearing like that in the sacrosanct "Sports Illustrated." There's still a lot of feedback on it. So don't have both parents with --
KING: Would you have had -- if you were presiding over this?
PEREZ: I think my first priority would have been those children. New York, we know it's a fault based system. He admitted the affair. He admitted the pornography. That's it, end of story. Let's close this and let's take care of the children. What is in the best interest of the children? That by law has to be the most important thing that we look at.
KING: That's the main court interest, isn't it?
BROWN: My colleague has the right of it. Counselor, this has been stipulated too. Let's move on. There's no need to go into these scandalous and impertinent details. We have the children to think about. Let's move on. If you want to come back in chambers and go off on anything that may have a particular bearing on the outcome of your custody battle or the distribution of assets, we can do that.
PEREZ: And, you know, think about it. It's a sad thing to say, but adultery is not something that we are shocked by in today's society. It's something unfortunately that happens every day in most marriages. I shouldn't say most, but a lot of marriages in America. Once you have that, and it's painful, of course -- we understand what she must be going through. But let's take care of these kids. And that is the primary thing. There's not even that much of a dispute over the assets. So for me, it's gotten to the point where --
KING: Out of hand?
PEREZ: Yes, out of hand. Completely out of hand. The kids will have an asterisk on them for the rest of their lives.
KING: And that's caused by the mother?
BROWN: Actually, it's caused by Mr. Cohen here. He's the mother's lawyer, and he's supposed to keep his client under control. And he's not supposed to have pushed this in front of the judge. In fact, he should have said look, now, if you want to do this, I think this is highly improper. And if you want me to continue as your attorney, you'll cease and desist. If you do not, then I'll have to withdraw.
PEREZ: We have to lay blame on both of them, Larry. If you think about it, the father's the one who had an affair. Nobody put a gun to his head. And she is the one who has decided to make this public. They're both equally responsible. They need to be accountable for what they've done. They need to think of their kids and just move on.
KING: One other quick thing. The A-Rod divorce case, how big and bad do you think that's going to get? She's filed.
BROWN: I don't know. Are there any children involved? You got baseball players --
PEREZ: Kids. They have a prenup, but he's going to do a nice little settlement.
KING: I read today in Florida they're famous for throwing out prenups.
PEREZ: Yes, it's true. But I think that if they both agreed to that prenup, and both parties agreed to maintain it -- I have heard that he is going to be very generous with her in giving her some kind of settlement. It might behoove her to just keep that prenup and take the settlement. We don't know all the details of the prenup. But pretty much, if it's a good prenup --
KING: Concerning adultery, there were reports -- they polled a bunch of public relations people, and it says adultery now won't affect your career, doesn't affect endorsements. A-Rod will not be hurt by this.
BROWN: No, it's gotten quite prevalent. In fact, they have had surveys that show basically four out of five of all married men have had some outside affair, and somewhere between one-third and three- eights of the married women have had some outside affair after their first child was born.
KING: The public looks at it --
PEREZ: Well, I read an article today where it said that maybe him having an issue with pornography, child pornography would affect him, a different type of relationship, a homosexual relationship would affect him. But, unfortunately, I think it goes back to what we said before, adultery, having affairs is such an --
KING: Common place.
Thank you both very much, as always, Judge Joe Brown, Judge Cristina Perez. When we come back, Suze Orman takes on the problems of finances. She's the calm in the financial storm. She's next.
KING: We're back. Well, the stock market rose today. It's novelty day. Although it's still in bear territory, the price of oil has gone down by more than $9. The dollar inches up a bit. The housing market, long slump that continues.
How bad is it, Suze Orman, our financial expert in New York?
SUZE ORMAN, FINANCIAL ANALYST: Well, Larry, how many time haves you asked me that question? How bad is it? Today it's --
KING: Every time you're on.
ORMAN: Today it's good. Three weeks from now, it may be bad. The markets are going to continue to go up and down and up and down. And nothing is going to turn around for a long time really, until we solve the financial dilemma of are our banks solvent, what's going on in our credit industry, and things that we really still have to address, that truthfully haven't been addressed yet. So while today is a good day, overall, we're still not doing as great as we should be.
KING: In late March, you said things were not as bad.
ORMAN: That's right. They're not as bad as they could have gone. If Bear Stearns had been allowed, which is when I said that, to have gone under, if the government had said, we don't know what to do, if the Feds had said, I don't know what to do, and if JPMorgan hadn't stepped in and saved them, who knows what could have happened. It could have gotten incredibly bad.
But because they did step in, things weren't as bad then. And they started to get better. And they're not as bad as they obviously could be. But they're still not as great as they should be.
KING: We hear stories that people are trimming their spending, trying to budget, less use of a car. Are we changing the psyche?
ORMAN: I think we're changing the psyche temporarily. Until people get used to $4 a gallon for gasoline, until they're used to the price of food, and then people seem to adapt, and then they kind of just forget about what it was like when gas went from two to $3 to $4 a gallon and they get used to it. And then, before you know it, their old habits come right back and there they are using the credit cards again, spending money they don't have.
The only thing that will stop them, in my opinion, Larry, is if the credit card companies stop extending credit to people. If we stop saying to people, here, spend money you don't have, just so that you can ruin the rest of your life so that you can enjoy having something that really you can't afford today.
KING: How is it the National Association of Realtors pending home sales index dropped 4.7 percent in May? Is it going to get worse?
ORMAN: I think it is going to get worse, depending on the area that you live in. There are obviously some areas that are doing relatively OK today. North Carolina, relatively OK. The state of Washington, relatively OK. But you have Las Vegas. You have Nevada. You have Florida. You have Arizona. All states that really aren't doing very well, and they probably aren't going to be doing well until about 2010.
KING: OK, Suze, the treasury secretary, Henry Paulson -- I want to get this right. He says that many of today's unusually high number of foreclosure are not preventable, that there's little policy makers can or should do to compensate for untenable financial decisions.
ORMAN: You know, that's what he may think. I have to tell you, I wish somebody would do something. Like right now, in the Senate, they've postponed any housing aid that were supposed to happen. If the government had acted, if the banks had acted more quickly, if they had allowed people to refinance out of these loans that were horrific loans that people never should have been in to begin with, maybe we wouldn't have had as many foreclosures.
You know, we're about two and half foreclosures this year, one and a half million last year. We're at four million foreclosures, four million people so far who have lost their homes, many of them due to the types of loans that they never should have been given to begin with.
So if we had just stepped in and said, let's refinance them. Let's let them stay at the mortgage payments they were at, we could have prevented this some how. But nobody is acting. The Hope program, while they say it's helping some people, it's not helping enough. I still think there are things we could have done that we're just not doing.
KING: We did a panel show a while back, Donald Trump was one of the panelists. And they all said if you get a home foreclosure notice, don't panic. There are a lot of things you can do. Is that true?
ORMAN: Well, there's a lot of things you can do if you can somehow figure out how come up with the money to pay the bank or the mortgage company --
KING: But the bank doesn't want to own your house.
ORMAN: No the bank doesn't want to own your house. They will postpone it. Foreclosures will go longer today than they used to. A few years ago, you were two or three months late, foreclosed. Now you can go six or nine months, and they're still saying, please try to come up with something. Obviously, you can do a short sale. Obviously, there are all kinds of things that hopefully you can do to save a foreclosure.
The truth of the matter is, Larry, if you are really behind on your mortgage payments, if you have no money to catch up, if your interest rates are still adjusting upwards, what are you going to do? I have to tell you, when that happens and you're that far behind, you're nine months behind, you have credit card debt, you don't know what to do, you're maxed out, I have to tell you, you need to throw in the towel and say here's the house back, bank.
KING: We'll take a break and come back with Suze Orman, get some of your phone calls, have a King Cam as well, e-mails too. Don't go away.
KING: We're back with Suze Orman.
Let's take a call or two. Austin, Texas, Hello.
CALLER: Hi, Suze, love you.
ORMAN: Thank you.
CALLER: I'm thinking that right now would be a great time to jump in the market because I can buy low and I'm essentially buying at a discount because things will eventually go up. Am I correct in thinking this?
ORMAN: Depends how you're going to buy. If you're simply going to buy with one lump sum -- let's say you have $10,000, $12,000, and you're going to put all $12,000 right now into the market, and then that's it and you're going to wait to see what happens, I personally think you're going to make one of the biggest mistakes out there. What you should be doing is dollar cost averaging, take that $12,000, divide it by 12, put $1,000 in every month.
While you may see the markets rally here, and go up one or two months from now, don't be surprised if you see them turn right again like they used to do, and go right back down and then where are you? Be very careful, make sure you are diversified, what sectors are you going to buy?
These are very, very tricky markets here. It's not we're at the bottom and they're just going up from here. These are going to go up and down and all over the place. You need to know what you're doing.
KING: Next call is from in Miami. Hello.
CALLER: Hi, Suze, how are you?
ORMAN: I'm good, sir. And you?
CALLER: Good. My question is I recently purchased a condo as my primary residence. And I've had it for three months. And although I do have it as my primary residence, I want to rent it out, and then take out a loan for another place that I can make that my primary residence. The question is, with the banks being strict on extending credit, how would they see me as far as credit worthiness in purchasing another home.
ORMAN: The first thing they would ask you are what are your FICO scores? If your FICO scores are high -- remember the FICO score is that three digit number that they are looking at, that determines if they're going to lend you money or not, and what the interest rates happen to be, if they're going to lend it to you. If they're 760 or above, you have a lot of cash and you have a lot of money behind you, they might look OK upon it. However, if you're putting everything you have into this one condo and you're going to take it out of this condo to buy another condo, I don't think they're going to look very favorably on you at this point in time. I would have to question why you would even want to be doing that right now in the Miami area. Be very careful of condos. What you have to think about isn't what you're buying, it's what happens if you buy into a condo where there are people who are foreclosed upon. They now aren't living there and you are stuck with the maintenance. You don't have the services that you should be having. Be very careful of condos. I'm not sure I would be doing that if I were you, sir.
KING: We have a King Cam question about foreclosures and the future of home buying. Take a look.
(BEGIN VIDEO CLIP)
CALLER: Hi Suze. My name is Debbie. I'm just wondering, with all the mortgage foreclosures, is there any hope for my children who are in their early 20s to ever own their own home?
(END VIDEO CLIP)
ORMAN: Debbie, the good news about what's happening is real estate prices are coming down. If real estate had continued to go up like it had been going up, your children never would have been able to buy their own hand. They wouldn't have been able to buy a fence around a home. In some areas, because prices are coming down, and they're coming down pretty dramatically, there should be hope for them.
You know, if they grow up and they save for a down payment, there's always hope and a way to do something legitimately, which is what a lot of people didn't do, which is why we're in the problems we're in right now. That's besides the point.
KING: We'll be back with Suze Orman and more of your phone calls on this edition of LARRY KING LIVE. Don't go away.
KING: We're back with Suze Orman.
Get another phone call, Colombia, South Carolina, Hello.
CALLER: Hi, Suze. I have -- I own a condo that I live in at present time, and I have about 125,000 in equity in it. And then I own another condo with only about 40,000 equity in it. And then I have in mutual funds about 47,000, and I have 12,000 in savings. But that's all I have for retirement. And I don't know what I should be doing to maximize my money now.
ORMAN: How old are you?
CALLER: I'm -- God, 57.
ORMAN: Don't say that. So am I. You make me feel old here, girlfriend.
KING: I have ties older than both of you.
ORMAN: And Ringo is 68. Here's the thing, you need to look at your situation and you need to see, what will it cost it to you live a life that you want to live? Do you simply want to keep one home, maybe sell the other condo and take the money out of that and pay off the mortgage you have on the one that you want to stay in. Put yourself in a situation that no matter what happens in the economy, that you're OK.
If you're dependent on other people paying your rent, on other things happening that way, and you're approaching retirement, I have to tell you, I would take myself out of that situation, eventually, maybe not right now, because the markets, as you know, with condos aren't so great. But eventually, get yourself in a place where you own everything outright. You have income coming in from other things, and, you know, relatively you should be OK.
KING: Milton, Delaware. Hello.
CALLER: Hi, Suze. Thank you for taking my call. I'm a huge fan of yours.
ORMAN: Thank you so much.
CALLER: I have a question for you this evening regarding foreclosure. I have a new construction home that I've been trying to sell as a short sale for more than a year. I have it priced $100,000 less than my builder, and no luck. My question for you is, should I allow the home to just go through the foreclosure channels or would it be in my best interest to once again approach my lender, who, by the way, is in bankruptcy themselves, and ask them to take the home back with a deed in lieu or should I just persevere along the lines that I have already?
ORMAN: Are you behind in your payments whatsoever?
CALLER: Yes, I am. I'm behind since October of last year. I have approached my lender before I was even late, and they kept patting me on the back.
ORMAN: The truth of the matter is, since you've been late for a long period of time, we're going on almost a year it will be that you're late on your payments, you're FICO score is already showing that. So you've already been hurt that way. You're not going to get any money out of it if you sell it, because you're selling it for under what you owe. So I have to tell you, if I were you at this point, I would either approach the lender and say, here's the deed in lieu of foreclosure, or let them foreclose on you and just walk away from it, because at this point, it makes absolutely no sense.
However, it's new construction and you're not even living in it, correct? She's probably not living in it. So she could just give it back to them and walk away and forget about it.
KING: Couple of other things; is this a good time to invest in money? In other words, don't buy anything, put it in the bank.
ORMAN: You know, here's the thing, and I just want to be very clear with everybody. If you're in a 401(k) plan and you've been investing every month and you've been watching the markets go down, the biggest mistake you could make is stop investing now. You should continue to do it every single month in a good quality stock or mutual fund. Don't make the mistake and just stop.
For new money, however, money that you haven't yet put in the market, you don't know what to do with it, unless you are going to continue to invest every single month from now for a long time, you're better off just leaving that money in a savings account, in a CD and forget about it. The big mistake people are making right now is they're buying.
Maybe they're buying a good no load index fund. It starts to go down and they just stop investing and just watch it go down. If you're going to invest, the way to do it is every single month, just keep doing it. If you're a lump sum investor, you're going to get yourself in trouble.
KING: You keep doing your thing, Suze.
ORMAN: I'll keep trying, Larry.
KING: You're always welcome at LARRY KING LIVE. It's great seeing you. Suze Orman, she's on "TIME" magazine's 100 most influential people list for 2008.
Tomorrow, a big exclusive, Ingrid Betancourt is here. She was freed in a miraculous rescue operation less than a week ago. She'll talk about her life as a hostage in the jungles of Colombia. It's her first on-camera interview with an American since her release. Will she try to run for president of Colombia again?
We're honored she'll be with us. Ingrid Betancourt live on LARRY KING LIVE Wednesday night.
Time now for Anderson Cooper and "A.C. 360" -- Anderson.