Return to Transcripts main page


Foreclosure Crisis: Obama Unveils $75 Billion Plan

Aired February 18, 2009 - 21:00   ET


LARRY KING, HOST: Tonight...


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: I'm here today to talk about a crisis unlike we've ever known.


KING: Barack Obama unveils a plan to keep millions of Americans in their homes and out of foreclosure.


OBAMA: The American dream is being tested by a home mortgage crisis that not only threatens the stability of our economy, but also the stability of families and neighborhoods.


KING: What does the president's $75 billion foreclosure fix mean to you?

And then bombshell court documents in the murder case against Caylee Anthony's mom -- crime scene photos, forensic reports.

Could duct tape found wrapped around little Caylee's skull seal her mother's fate?

It's all next on LARRY KING LIVE.

We begin with a frequent guest here.

In Los Angeles, Ben Stein, the noted economist, "New York Times" columnist, former presidential speechwriter, TV personality and best- selling author. His latest book is "How To Ruin the United States of America".

And a new guest. In San Francisco, Representative Jackie Speier. She is a Democrat of California and a member of the House Financial Services Committee.

Before we start, it's called the Homeowner Affordability and Stability Plan. The price tag is $75 billion.

Here's President Obama outlining it earlier today.


OBAMA: The plan I'm announcing focuses on rescuing families who played by the rules and acted responsibly. By refinancing loans for millions of families in traditional mortgages who are under water or close to it, by modifying loans for families stuck in subprime mortgages they can't afford as a result of skyrocketing interest rates or personal misfortune and by taking broader steps to keep mortgage rates low so that families can secure loans with affordable monthly payments.


KING: Ben Stein, your reaction?

BEN STEIN, ECONOMIST, "NEW YORK TIMES" COLUMNIST, AUTHOR, "HOW TO RUIN THE UNITED STATES OF AMERICA": Well, it's an agonizing problem, because, on the one hand, we don't want people kicked out of their homes. I mean people live in their homes. It's vital to them psychologically and they need shelter. On the other hand, there are an awful lot of people who bought more house than they could afford. It's going to be very hard for some bureaucrat to winnow out the honest borrowers from those who were kind of chiseling around the corners.

And the question I have is why should the honest taxpayer, who lived within his means in a little house in Oklahoma, why should he be bailing out a homeowner in San Bernardino who lived beyond his means?

KING: Congresswoman Speier, is it because we are our brother's keeper?

REP. JACKIE SPEIER (D), CALIFORNIA, MEMBER - HOUSE FINANCIAL SERVICES COMMITTEE: Well, it's because we have an economy that's in shambles. And the first thing we have to do is stabilize the housing market. It's where it started. And that's the very first place that we've got to stabilize it. And, truly, four to five million Americans who have played by the rules are going to be able to refinance their homes now at lower interest rates. And it's going to shave maybe $200 to $2,500 off of their mortgage payments each month.

KING: Is it going to help nine million borrowers?

And if that's true, will that really turn it around, Ben?

STEIN: Well, it can -- I think the number -- you may have made a possible mistake about the numbers, because that sum of money that President Obama spoke about today is enough to rescue a couple of hundred thousand. I mean, the idea that it can rescue three or four or five million, the arithmetic just doesn't add up.

I mean I agree, if a person has played by the rules and he's lost his job, it's very sad for him to lose his home. And he or she should also be able to get a low interest loan from the government.

But to change the terms of the loans, to cram down loan modifications to banks, to tell people that if you bought a house that's more than you can afford, we're going to have the honest guy who lived within the rules or within the boundaries of his income, bail you out, that's a problem.

And, also, I -- I mean, Representative, with all due respect, if they let the prices fall the market will stabilize faster than if they let the prices -- keep the prices at an artificially high level.

Where I live out in Palm Springs, they've let the prices fall. The market is rallying quickly.

KING: Congresswoman?

SPEIER: Well, I would say that for those individuals who have gotten into those subprime loans, who are about to lose their homes, we've got to have some consistent way of looking at whether or not they can stay in their homes. And the cram down is not necessarily going to reduce the principal at all. It's going to reduce the actual payment they make. It may extend the loan. It's going to reduce the actual interest rate.

It's not going to be something that's going to work for everybody. Some of these people are way over their heads and shouldn't be in these homes.

STEIN: Yes, but...

SPEIER: But for those that are on the edge, this second proposal that the president's suggesting is very important. And it will help two to three million other homeowners.

STEIN: Well, as I said, again, I just don't think the math adds up for it to -- that it will help that many people, although I certainly hope it does. But this idea of creating an artificial floor for housing prices is what's going to keep this a zombie real estate market, as my friend Phil DeMuth calls it, and keep there from being enough transactions to get the market revved up again.

When -- if the price falls enough the market will start going in terms of volume and then prices will pick up again. But to stabilize it at an artificial level rarely works.

KING: Congresswoman Speier, your contemporary, your fellow member of Congress, Republican Congressman Jeff Flake of Arizona, says that the Obama plan shifts the debt to the taxpayer and asks

"New York" magazine) "How will borrowing more money to pay for bad loans solve the problem?"

SPEIER: Well, Jeff and I actually agree on a lot of things, including the problem with earmarks in the federal budget. But I will say this, that we have bailed out a lot of industries over the course of the last six months. The average American who's played by the rules, who has made their payments and yet has seen their home now drop in value to less than what they actually owe, is someone that is worthy of us helping out -- to lend a hand.

And for those that have gotten into these subprime mortgages -- I mean there's a lot of finger-pointing that can go around. But meanwhile, we do need to stabilize these communities, because when the foreclosure market is as bad as it's getting in places in California, that means everyone in the surrounding area is impacted. It means that the local community is impacted. That police and fire are impacted. It is a no win solution.

STEIN: But what -- should we bail out people whose 401(k)s have fallen dramatically in value?

I mean should we bail out people whose investments generally have fallen badly in value?

Why -- why should we pick one investment and say we're going to bail that one out?

SPEIER: Well...

STEIN: That doesn't...

KING: Of course, the mortgage is the staple of America, isn't it?

STEIN: I know. But, on the other hand, so is retirement a staple of America.

Why should we say we're going to bail out people so they can stay in their homes, but not bail out people whose retirement is in jeopardy?

Retirement is as basic a part of life as having a home.

SPEIER: Well, I would agree with you, Mr. Stein.

STEIN: Why should we do this?

SPEIER: But I would also say that the truth of the matter is we've bailed out AIG. We've bailed out Bear Stearns. We've bailed out...

STEIN: We -- I agree.

SPEIER: ...all the banks.

STEIN: I agree.

SPEIER: So, you know, it's about time that Main Street gets helped out, too, don't you think?

STEIN: I agree. But the problem is that the numbers are so large to bail out every homeowner who's in trouble, it's just going to add a crushing amount to our debt. At some point we're going to wake up and Standard & Poor's is going to say, you know what, you have so much debt, America, that we're going to downgrade your debt compared to, say, the debt of England or Germany. And then we're going to wake up to a real financial crisis.

I agree these people are meritorious and my heart goes out to them. But maybe there's some other way to do this. KING: The Treasury secretary, Congresswoman, says we're going to see results from this quickly.

Do you agree?

SPEIER: I think we will. You know, FDIC has actually taken this sort of approach already and has been very successful in modifying mortgages through their program. So we've seen some results. We've got to see much more.

But I do think that we can't just continue to wring our hands. We've got to offer up solutions. And, you know, I think back to 9/11. We didn't wring our hands then. What we did is we bucked up, we put our American flag out, we weren't going to be taken on by terrorists. And we shouldn't let this economic downturn turn us away, either.

STEIN: I couldn't agree more. But, on the other hand, it's a lot -- they're talking about spending an awful lot of other people's money.

KING: Quickly, Ben, Alan Greenspan now says that a temporary nationalization of the banks might be necessary.

STEIN: Well, Alan Greenspan works for a person who is an enormous short seller of bank stocks, so I'm not surprised that he says that.

KING: So you say he has a vested interest?

STEIN: I think he might. He's a wonderful guy, but I think he might.

KING: Thank you, Ben.

STEIN: Thank you.

KING: We'll see you again very soon.

Thank you, Congresswoman.

We hope to have you on a lot.

SPEIER: My pleasure, Larry.

KING: Ben Stein and Congresswoman Jackie Speier.

Real estate experts give us insight on foreclosures, interest rates and more, next.


KING: The real estate mess -- it's an apt way to call it. Three outstanding panelists join us.

Barbara Corcoran. She is the founder and former CEO of the Corcoran Group, the New York-based real estate company, and the best- selling author of "Nextville: Amazing Places to Live the Rest of Your Life."

Here in Los Angeles, Michael Corbett, the real estate expert, best-selling author of "Ready, Set, Sold." He's the of Extra's "Mansions and Millionaires."

And in Miami, Don Peebles, real estate entrepreneur, chairman and CEO of The Peebles Corporation and author of "The Peebles Path to Real Estate."

President Obama insisted his homeowner bailout plan will not rescue the unscrupulous or the irresponsible.

Here's more of his comments earlier.



OBAMA: Our housing crisis was born of eroding home values, but it was also an erosion of our common values -- and, in some cases, common sense. It was brought about by big banks that traded in risky mortgages for profits that were literally too good to be true; by lenders who knowingly took advantage of homebuyers; by homebuyers who knowingly borrowed too much from lenders; by speculators who gambled on ever rising prices; and by leaders in our nation's capital who failed to act amidst a deepening crisis.


KING: Barbara Corcoran, is he on the money?


Who hasn't he left out?

Of course. But the real issue is eroding home values. If we didn't have the prices coming down, all these mistakes and sins that everybody's committed in the past, nobody would be talking or even worrying about it now. The problem is values came down.

KING: What do you do, Michael?

MICHAEL CORBETT, HOST, EXTRA'S "MANSIONS AND MILLIONAIRES": You know, honestly, Larry, I think that this package that's out there right now, it's a good start. I mean, obviously, prices are taking a nose dive. And as Barbara just said, that's the basis for this crisis right now. If we didn't have the nose dive, we wouldn't have a problem.

I think stopping a little bit of this hemorrhaging by hitting us -- he's trying to do on three different fronts by hitting the people in trouble; also, the homeowners who couldn't refinance previously now will be able to; and then opening up a little bit of credit.

I think it's going to help. KING: If it's just the start, Don, does that mean a lot more than $75 billion?

DON PEEBLES, AUTHOR, REAL ESTATE ENTREPRENEUR: Well, look, I think there's going to be more money that's going to be needed to spend. But this is a very good start.

The president made a commitment today to exercise prevention. And you know the old saying, an ounce of prevention is worth a pound of cure. He's looking to help four million homeowners who are currently paying their mortgages and protect them from going into foreclosure. And the number one thing we have to do with housing prices right now is to stabilize them, because a foreclosure is like a forest fire -- once it gets started, it spreads like wild flowers and it's hard to put out.

And so we've got to stop the foreclosures, because they're affecting all of us, whether we're in foreclosure, whether people are current on their mortgages and not at risk, they still are negatively impacted by foreclosures.

KING: The simple thing, Barbara, is that what do you do if you're facing foreclosure?

What do you do?

CORCORAN: If you're facing foreclosure, it's a little late to be doing anything proactive, because the control is totally out of your hands. You can call the bank. You can try and negotiate at that point. You can try to talk to the right person.

And believe it or not, that's the hardest part of this whole process -- who the heck do you call?

People think they know who their banker is, but who is the banker?

Who do you call?

How do you get an answer?

But you can, of course, solve the problem if you've got a few bucks. But these are the people who don't have the money to solve the problem. It's already done with.

KING: Michael, will the Obama pressure -- the force of the office -- work on these banks to give these people time?

CORBETT: Well, what they've done which I really like in this program is they've actually added in an incentive. So it's giving the banks an incentive to actually -- to loan modify and also to go ahead and refinance on a lot of these people.

So right now, basically, the banks are getting paid per customer that they refinance or they modify.

KING: So why not do it?

CORBETT: So, hopefully they will. That's what this...


CORBETT: That's what this package puts into place.

CORCORAN: Larry...

KING: You agree, Don?

PEEBLES: Yes. In fact, Larry, absolutely. What it does is it incentivizes the banks. It pays them to play. It pays them to let homeowners stay. And what it also does is it promotes responsibility. This is not a bailout plan. This is for responsible Americans who are going to pay their mortgages, who are continuing to pay their mortgages and who have the capacity to pay their mortgages and want to.

The president said today -- and he's said all along -- there are going to be some people that can't be helped. But many, many people can be. And this program starts March 4th. March 4th there will be relief. And this will incentivize both the borrowers and it will incentivize the banks to work things out and keep people in their houses.

KING: And that's right around the corner.

CORCORAN: Can I just say...

KING: We'll be right back and we'll pick up with you, Barbara.

Do you agree with the president's $75 billion home foreclosure plan?

That's the question on our blog at Weigh in.

And we'll be back in just 60 seconds.


KING: We're back.

David Theall is here with your blog comments.

What are they saying -- David?


Do you agree with the president's $75 billion foreclosure plan?

That is the question that we've been asking on the blog, our question of the day.

Most of the people who we're hearing from definitely are not in favor of this plan. In fact, we heard from tonight two guys, same name, opposing views. Sean was one of those guys. Sean B. we'll call him. He was the first. And he agrees with it. He says

"New York" magazine) "I do agree with the plan. But what worries me is it's probably too little, too late."

Now, we also heard from another Sean, who has a very different point of view. Says this Sean

"New York" magazine) "I am so angry at all of this. My wife and I work two jobs each to pay our bills and have a simple home for our children. Now the government is telling me that I was a fool for not living above my means, because they pick up the tab for it all anyway. I am angry, Larry, very angry."

Maria also chimed in tonight. And she agreed with the second Sean. She says

"New York" magazine) "In the '80s, we had to bail out the farmers because it would be ruin -- because it would be ruined, rather -- if we didn't. Then we bailed out people who chose dangerous savings and loans. Now we have to bail out people who lived above their means regardless of their intentions." Says she

"New York" magazine) "I'm tired of always having to fund these fixes."

The conversation continues, Larry King -- Look for that blog link, click it, jump into the conversation. We look forward to hearing from you -- Larry.

KING: Thanks, David.

You know, the home the octo mom is living in could be going on the auction block. The mortgage hasn't been paid in 10 months. She's one of our topics tomorrow night. Right now, we'll be right back.


KING: We're back with Barbara Corcoran, Michael Corbett and Don Peebles.

Here's an e-mail question from Adrian in Hyattsville, Maryland

"New York" magazine) "Why have banks been so resistant to refinancing mortgage loans to lower interest rates?"


CORCORAN: The reason is they're not in charge. The middleman is in charge. The guy who's financing the mortgage you have is in charge. And if he deals too generously with a particular homeowner, he's going to get sued by his bond holder. And this is so complicated, I don't even understand it. And I read about at all the time -- all the time.

The fact of the matter is you pick up your phone, you call your banker, you want to deal with someone who can help you out here, forget about it. You don't even get a return phone call. And I might say, the only complaint I have of this new Obama package -- and I'm all for many of the incentives there -- is that it's totally optional -- totally optional -- still -- as to whether the bank wants to return your phone call. Sure, there's little incentives that Mr. Obama has put in the plan.

But you know what they are?

A thousand dollars if you renegotiate someone's loan. Another thousand dollars a year, a $500 bonus here and there. It's not enough. I can't believe that the banks haven't been mandated to be forced to renegotiate loans on good paying people who have no reason not to be listened to.

So I, for one, am not that excited about this plan.

I'm sorry I talked so long.

KING: Michael, do banks want to own homes?

CORBETT: No, they really don't. But one of the problems, as Barbara was just saying, you can't get someone on the phone up until this point, mainly because they're overwhelmed -- the phone calls they get. And up until this point, banks would not deal with you unless you were already in arrears -- unless you were facing a foreclosure.

KING: What would you -- you'd get a machine when you call?

CORBETT: You would get whoever you would get. You'd normally have to get to the loan modification department. They won't talk to you unless you already owed money. Now, hopefully, that will change. That's sort of the intention of this plan.

KING: Is one of the ways...

CORCORAN: It's not going to change

KING: Hold it, Barbara.

Is one of the ways out, Don, to try to sell the house?

PEEBLES: Absolutely. One of ways is to sell the house. But that's provided they have equity in it. The banks don't want this -- their houses back. They don't want to take property back.

And Michael made a good point here. Up until right now, the lenders would not deal with their borrowers unless they're delinquent. And under the president's plan, the lenders will be incentivized to catch their borrowers before they go into delinquency. So there is no pre-qualification, if you will, about being delinquent.

Right now, you need to be 90 days delinquent before you get the bank's attention, partially because they're overwhelmed. Also, they want to have this test as to whether the borrower has the capacity to pay, because if they do, then they're not talking to them.

Under the president's plan now, the lenders will be talking to people and they'll be incentivized.

And it's more than a few thousand dollars, Barbara. For example, it is 30 -- the government will insure and take the risk from 38 to 31 percent to bring down the ratio of debt to income levels. And that is a big step.

KING: All right...

PEEBLES: And that's a big risk. So it's shared responsibility.

KING: Barbara...

CORCORAN: Yes, but I just wanted to say...

KING: Barbara, do you...

CORCORAN: Can I just say something?

KING: Go ahead.

CORCORAN: Sure, the government will jump in with the lender to bring it down from 38 to 31 percent.

But guess whose job it is to bring it down to 38 percent?

It's the lender standing by himself.

So what guy is going to want to do that?

I don't get that.

KING: Michael, do you...

PEEBLES: The same lender that (INAUDIBLE)...

KING: Go ahead, Don.

PEEBLES: It's the same lenders that are doing this right now for commercial borrowers. And they do it for more sophisticated borrowers right now. Restructuring debt is not unusual here. The lenders don't want their property back.

KING: Michael, do you see any flaws in this plan?

CORBETT: The flaw I see is mainly, right now, especially, you know, from the blog and the things that we've just heard, is in the perception of this plan. Everybody, what they're hearing now is bailout. And one of the things -- there's really three prongs to this plan. And only one of them really involves the bank and the taxpayers kicking in money from the funds.

One is about allowing homeowners who were not qualified now to be qualified at a lower interest rate and let them pay their bills, but just in a structure they can. And the other is about the government going in and trying to shore up the credit issue, where now more credit becomes available so people can buy. That's been a big issue. So on those two fronts, it's not as much of a bailout, it's more of a stimulus.

KING: But perception is reality, though.

CORBETT: Perception is incredibly important. And, as you hear, there's a lot of anger about it.

KING: We'll be back with more.

And we'll go to some of your phone calls, too.

Are TV shows about houses responsible for the economic mess?

We're going to ask the host of one, Jeff Lewis.

He's next.



OBAMA: All of us are paying a price for this home mortgage crisis. And all of us will pay an even steeper price if we allow this crisis to continue to deepen -- a crisis which is unraveling homeownership, the middle class and the American dream itself.


KING: We now welcome in this segment Jeff Lewis, real estate speculator, star of Bravo's reality series, "Flipping Out."

Jeff, in a recent list of 25 people to blame for the economic mess, "Time Magazine" suggests that television shows about the housing game helped inflate the real estate bubble. "New York" magazine cited you by name as one of the real villains of this financial crisis.

Your response?

JEFF LEWIS, REAL ESTATE SPECULATOR: Well, you're right, Larry. I'm completely responsible. I am sorry, Larry and I'm sorry America.

KING: You're the cause of all this?

LEWIS: Absolutely.

KING: You've got so many (INAUDIBLE)...

LEWIS: I'm the cause of the world financial crisis.

KING: Give us $75 billion and you're even.

LEWIS: I basically flipped 60 houses in the last nine years, none of which went in foreclosure, but I'm responsible. I mean this is ridiculous. It's -- there's no personal responsibility in this country. People need scapegoats. I mean obviously, you know, people are devastated. People have lost their homes. They've lost -- you know, I lost 35 percent of my net worth last year and I feel like one of the lucky ones, you know?

I mean there's people that are really in dire straits. And my...

KING: Were you shocked by this?

LEWIS: Absolutely. Absolutely.

KING: What about their reasoning?

LEWIS: Well, I mean I don't really understand it, because I'm not giving any of these -- giving these people the loans. I mean what happens is I put a house on the market, I get three or four offers. I get my purchase agreement and I get my pre-approval letter. I'm not verifying these people's income. I'm not verifying their credit. There's -- nobody is validating what they're making.

And so, you know, when they do go in foreclosure, you know, people want some -- somebody to blame. But that has nothing to do with me. I buy a house for 600. I put in two hundred and I sell it for a million.

KING: Is it the television aspect that promotes it?

LEWIS: I think so. I think because I'm out there and because I have, you know -- I have kind of a loud personality. So I think people -- I'm not the most likable guy in the world, Larry. So I think people just want to blame someone and I'm in front of their face and they blame me.

KING: You're not likable?

LEWIS: My mom used to like me.

KING: Who do you blame? Who is responsible for all of this. Got to be somebody, some thing.

LEWIS: We all are a little responsible. Yes I re-fied my house a few times. I go a few equity lines. I spent money that wasn't used for my home. I bought a car. I took a vacation. I think we all did that. Assuming that the following year a home is going to be worth 15 percent more and we can re-fi again.

We all were a little greedy. We all were a little irresponsible. I wish I was a little more conservative with my money. I'm sure other people were too.

KING: You think this Clinton plan -- Clinton? I was with Clinton last night. He's on my mind. Do you think the Obama plan's going to work?

LEWIS: Well, I don't think that plan on its own will work. I think that we need to develop a few other plans simultaneously. Because, I mean, I believe if we -- first of all, I agree with Ben Stein. I think the math is completely wrong. I don't see how 75 billion dollars is going to help nine million people. I mean, I think that Ben is right, that the numbers are going to be significantly smaller.

But I believe that if we do -- if we do implement this particular program, that it will prevent the situation from getting worse. But my question is, how do we actually reignite the real estate market? How do we defrost the frozen credit market?

You know, Larry, I'm not just an observer, I'm a participant. I'm out in the trenches every day. I'm talking to buyers. I'm talking to loan brokers. The fact is that people are having trouble getting loans. I can name ten names right now of people who have five to 10 percent down who are willing to buy homes. The problem is, they need 20 to 30. These are people with good credit, strong incomes.

I think that if we can develop -- if we can pull up these -- we can loosen these restrictions, and we can develop more attractive loan programs, I think we can stimulate the real estate market.

KING: Do you see good news out there?

LEWIS: You know what? It's like doomsday. Every time I turn on the TV and read a newspaper -- I just choose to be positive. I see a lot of people out there that are -- they're willing to buy. The problem is that they're scared. There's so many people just lined up along the sidelines, waiting for someone to tell them, it's time to buy. And I do believe that the worst is behind us.

Do I think it's going to go down a little bit? Possibly five, 10 percent. But do you really want to pass up on your dream house in the location that you want, in the school district you want, with the square footage you want, for five or 10 percent when you know you're going to stay there long term, and that you can buy it right now when interest rates are historically low, and you can take the write offs?

KING: Did you get much flak from the criticism?

LEWIS: I'm always being criticized.

KING: That recent one sort of --

LEWIS: I took it personally. I thought it was absurd. You know, the 60 houses I sold did not put us in a financial crisis. I think they're comparing me to these people that were going in and buying houses for 400 and they were putting in 7,000 dollars and they were selling it for 800,000. And they had a lender in their pocket. They had an appraiser in their pocket.

That's not the kind of business I do. I was going in, I was putting 200, 300, 600, a million dollars; I was actually improving the properties. What I do is a little different than what other people do.

KING: Banks are supposed to lend, right?

LEWIS: Yes, that's what I thought. KING: Why aren't they lending?

LEWIS: I think they're scared. They're looking for any reason not to lend. And, you know, I was just talking to my mortgage broker this morning. She has a doctor, she's been trying to get a loan for ninety days. They look for any reason. He's got a 760 FICO score. He's got a contract with the hospital. He's got money in the bank. And they said, at the very last minute, they want to see his 2008 tax returns. Well, it's February the last time I checked. I mean, who does that? So now he's running to his accountant to get his tax returns.

KING: Jeff, thank you. We're going to have you back. Jeff Lewis, real estate speculator, star of Bravo's reality series "Flipping Out." More of your questions with our real estate experts coming back next.



OBAMA: Solving this crisis will require more than resources. It will require all of us to step back and take responsibility.


KING: We're back with Barbara Corcoran, Michael Corbett and Don Peebles. From our blog at, James asks, how will the Homeowner Affordability and Stability Plan help homeowners with VA- backed loans? Michael, you want to take that?

CORBETT: Yes, any of the VA-backed loans -- it's basically the ones right now -- what you asked me before, what are some of the flaws in this program? Really, the only people that are going to qualify for this are people that have Freddie Mac and Fannie Mae loans. And they have to be conforming, which means they can only be at 417. IF it's over that mortgage amount, you're not going to fall into this, in a sense, rescue plan.

so if you're conforming with those specific requirements, then you're going to have a shot.

KING: Barbara, you take this. An e-mail from Gena in California: "why don't lenders sell foreclosed homes for the amount left on the mortgage note? There seem to be thousands of foreclosed houses for sale for way more than what's actually owed. Why not price them to get the market moving?"

CORCORAN: Because banks or lenders, like everybody else out there, they want to come away from the table with as much cash in their hand as they possibly can. They will aggressively reduce the price again and again until they get the darn property sold. You know what's great about buying a foreclosure property? You're buying from someone who couldn't care less about that house. It's not a passionate homeowner who's losing their home. It's the bank. That truly is where you get your best deals today. KING: Well said. Don, we'll take this call from you. It's from Greenville, North Carolina. Hello.

CALLER: Hey, how would you know if you would qualify for these restructured loans? How would you apply for them?

PEEBLES: Actually, what would happen, in this case, is that, starting on March 4th, you would contact your bank. You'd get your documentation in place. And you would essentially make an application. You qualify for it if you have a mortgage and if your mortgage is at a level that conforms to Fannie Mae and Freddie Mac, and that you are current on your mortgage right now. Then you have the capacity to go in and prove to the lender that you can continue making payments.

The number one thing here, you have to prove that you can make payments and that you are able to be able to make responsible decision going forward.

KING: Seminole, Idaho, another caller.

CALLER: Hi. Actually, it's Seminole, Florida. But I just wanted to ask, I have always played by the rules and have always kept up with my mortgage payments. And I want to know -- I just was recently laid off. And I want to know how we're supposed to pay this debt off with all of us losing our jobs and trying to reconstruct this, you know, payment plan with the banks, and try and save our homes?

KING: Michael?

CORBETT: Well, what this restructuring plan is doing is that it's allowing people like this young lady that said -- has lost their job. Those are the people at risk. And what the -- what this plan is going to look at is -- not everybody is going to be bailed out on this. There has to be an availability for this person to jump in and say, OK, I can find a way to continue to pay my loan -- there are no free lunches here. You have to continue to pay your loan. But you do have to show you do have some income coming in. Not everybody's going to be able to qualify.

KING: Barbara, are you optimistic about this?

CORCORAN: I'm optimistic about the housing market. I've learned in all the years I've made a ton of money doing it, high markets, low markets, that in the end, buying a house, over the long haul, is a great investment. Am I optimistic about the new plans coming out? I can't honestly say I am. And I want to be. Believe me, I've been waiting with baited breath to see what was coming down the pike here.

But here's what I have a problem with, it's complicated. I've read through this stuff again and again. It's so complicated. I feel like I should go back to school and get some fancy degree so I can understand it. For that last caller who came in, who says what do I do, I just lost my job, how do I deal with my bank? Guess what, that bank's not going to deal with you. You're going to hope and pray that on March 4th, when all these little details finally come out on this plan, that you're going to actually be able to understand it.

And chances are good you're not going to understand it. Because once those politicians start writing this stuff, it gets so complicated, the guy sitting at home who just wants a helping hand and deserves it, doesn't get it. And that's what my biggest concern about -- this is complicated. You need to be a rocket scientist to figure this one out.

KING: We'll try to uncomplicate it next time. Thank you all very much. Barbara Corcoran, Michael Corbett and Don Peebles. Five hundred pages of court documents were released today in the Caylee Anthony case. When did she die and what evidence were found near her remain? Inside the case in 60 seconds.


KING: Welcome back. Five pages of court documents were released today in the Caylee Anthony murder case. The documents list evidence recovered from the location where Caylee's body was found, as well as Casey Anthony's car. And there are more questions about the duct tape allegedly found on the body and at the Anthony home. Caylee's mother Casey has been charged with first degree murder.

Our outstanding panel, in New York, Jane Velez-Mitchell, the host of "Issues with Jane Velez-Mitchell" on HLN, in Denver, Dr. Lawrence Kobilinsky, forensic expert who has consulted with the Casey Anthony defense team, in Miami, Stacy Honowitz, the Florida assistant state attorney who specializes in child abuse and sex crime cases, and in San Francisco, Michael Cardoza, defense attorney.

Michael, I am not an attorney, but it's not evidence until the court puts it in -- until the judge puts it in evidence. Right? So are we prejudging here? How do we know it's going to be admitted?

MICHAEL CARDOZA, DEFENSE ATTORNEY: Well, of course we're prejudging here. I think the whole country has prejudged this case. That's going to be one of the most difficult things in this case. How are they going to get a fair jury in Florida? I think it's going to be near impossible. She is right now, in my opinion, presumed guilty until she proves her innocence. You're right, the attorneys have to put -- and that would be the prosecutors down there -- have to put that evidence in before a jury, and let them decide what inferences they're going to draw from that. Right now, I got to tell you, everybody that hears this thinks she's guilty.

KING: Stacy, does he not have a point.

STACY HONOWITZ, FLORIDA ASSISTANT STATE ATTORNEY: He absolutely has a point. I would never agree with anything Michael has to say, especially in something like this. We've been talking about this case every single night ever since she was arrested. The discovery rules in Florida are very liberal. This discovery was turned over. A public records request was made in order for everybody to know what was going on. But not all of this evidence is always going to be admissible. It has to be relevant evidence. Are we prejudging the case? Most of the country is. It is going to be difficult to find a fair and impartial jury, based on everything we've been speaking about.

KING: I know you're in the business, Jane, but is that one of the tragedy -- may be a harsh word -- the tragedies of around the clock news channels and tabloid television shows that this has occurred? This makes the British system, where you can't discuss it, look a little logical.

JANE VELEZ-MITCHELL, "ISSUES WITH JANE VELEZ-MITCHELL": Well, remember, Larry, Michael Jackson and all the coverage that that case got and he was acquitted. Look at O.J. Simpson, all the coverage that case got and he was acquitted. So I don't necessarily think all this information is going to mean that this woman has no chance in a courtroom in front of a jury.

This information, however, is very incriminating. There's a lot of evidence that links the crime scene, where little Caylee's remains were found, to the Anthony home, heart stickers, duct tape, the canvas bag in which the remains were found is the same make and the same color as a canvas bag found in the Anthony home.

So this is very incriminating evidence. And the detectives concluded that little Caylee Anthony was killed between June 16th and the 27th. And they say that there's nobody they can point to other than this woman, the mother, Casey Anthony.

KING: Doctor, a lot of this evidence forensic?

DR. LAWRENCE KOBILINSKY, FORENSIC PATHOLOGIST: Of course, Larry. This is really a forensic science case. The evidence is there to be analyzed and to tell a story. The prosecution would like that evidence to tell the story that the prosecutor wants the jury to believe. There are two sides to every coin. I think the public has not heard both sides of the story.

You know, regardless of what this evidence says, we still don't know how she died, when she died, when the body was deposited in that location, whether she was moved. There are so many outstanding questions. And that first issue about whether it's admissible or not, whether it's reliable evidence, that's a key to this whole picture.

KING: Let me get a break and come right back. What happened when Casey Anthony found out Caylee's remains were found? Information from court documents when we return.



KING: We're back with our panel. OK, group, documents released showed that Casey Anthony hyperventilated and asked for medication when she was notified that her daughter's body was found last December. Stacy, doesn't that show some concern -- obvious that the defense has a point here? HONOWITZ: Well, you mean the prosecutors want to try to get that in, because it shows that she had this whole exasperated look about her. You know, this is all depending upon whether the judge finds that evidence to be relevant to the case at hand. The defense attorney is going to say she had this type of behavior because, my god, they're telling her the remains of a child were found and it could be her child, doesn't necessarily mean she's the one that did it.

So I think you can take evidence bit by bit. There is mounting evidence here that does point to her. But if you take it separately, you're going to see the defense is going to be able, at some point, to counter everything the prosecutors are trying to get in.

It's circumstantial. Every piece coming together forms a puzzle. If you can put all the pieces together, you can prove the case beyond a reason of every reasonable doubt.

KING: Michael, what makes this case so fascinating?

CARDOZA: Well, what makes it fascinating is you've got a little girl. You've got a mother that immediately after Casey -- or Caylee went missing, she goes out and parties. That certainly didn't bode well for her. I tell you what, Larry, one thing I learned in my over 30 years of practice in trying cases in front of juries, you got to have a defendant that the jury likes. I know Jane talked about Michael Jackson. And in that case, the jury -- and I sat through a lot of that -- the jury did not like the accusers in that case.

In O.J. Simpson's case, the jury liked O.J. Simpson. In this case, nobody is going to like Casey. And that is a big thing, because every bit of circumstantial evidence is put -- that's put in front of them, they're going to interpret against Casey, just like the evidence that we were talking about, Stacy was talking about. Her reaction? You can infer from that two different things. She was upset, as any mother would be, or she was upset because the body that she hid was found. It depends whether you like her or not. Nobody likes her.

KING: Jane, the deck does seem stacked though, doesn't it?

MITCHELL: Well, I'd like to say, Larry, that I think one of the reasons why that piece of information is so incriminating is that they told her the remains were found at that location near her family's home. And she hyperventilated before those remains, my understanding is, were identified as her daughter. Now there had been numerous other sightings and possibilities of finding remains, where she did not have that reaction. So to me, that shows some consciousness of guilt.

I don't think it's necessarily stacked against her. Her defense team is a dream team. Linda Kenny Bodden (ph) is a fabulous defense attorney, who, remember, got a hung jury in the Phil Specter case, which is currently being retried. So I think that there are going to be a lot of surprises in this trial. It's going to be absolutely fascinating.


KING: Hold it.

HONOWITZ: You're not going to be able to overcome one piece of unbelievable evidence against her. That is the very first thing we heard, 31 days she doesn't report her daughter missing. She's not even the one that does it. It's her mother.

KING: I'll as Doctor Kobilinsky what the defense does have when we get back.


KING: Dr. Kobilinsky, you mentioned the defense will have things they have to offer as well. Do you want to give us a clue?

KOBILINSKY: Very quickly, the defense has a spectacular legal team. They have good experience, the scientists. And all they need to do is raise reasonable doubt. And so every item of evidence will be questioned as to whether or not it's reliable, and what conclusions can be drawn. Remember that the National Research Counsel issued a report just today indicating problems with many areas of the forensic science. I have a feeling that that will come up during the trial as well.

KING: Stacy, would that concern you as a prosecutor hearing that?

HONOWITZ: You know, I don't think any prosecutor ever walks in and says they have a locked case. They can walk in and say, I have a lot of good evidence. I hope it's admitted and I hope I can prove it beyond a reasonable doubt. But forensics are going to play a very big role in this case. Some of the things are going to be a battle of the experts. But I think, when you hear all of the evidence, when you fit all the pieces of this puzzle together, it is going to be one answer.

You never say, I have a locked case or a great case. You have to wait to see what unfolds in the court.

KING: Will evidence -- will that out -- will it come down to that?

CARDOZA: It absolutely will come down to that. This will be a forensic type case. The defense will attack it by taking each piece of evidence, putting their expert on, and giving reasonable innocent explanations to that one piece of evidence. They will attack every piece. At the end, they will say the prosecution has nothing.

On the other side, and Stacy knows this, what the DA is going to do and the prosecutor is going to do is step back and say, yes, but look at the entire picture. Look at all the circumstantial evidence. It all points to guilt when you put it all together.

KING: Jane, when is trial scheduled?

MITCHELL: Oh, it's going to be a long time. It was supposed to start in January. It keeps getting postponed. They think it could be a year from now. So we're certainly going to have more time to debate and discuss all this. And I can tell you, more evidence is going to come in.

KING: And she was not entitled to bail?


HONOWITZ: No. Capital offense, not entitled to bail.

KING: Even though she had no prior record?

HONOWITZ: First-degree murder charge.

KING: So even without the body being discovered, she was in jail, right?

HONOWITZ: Right, they indicted her without the body being found. So what happened was the prosecutors, when they took it to the Grand Jury, there was evidence enough for them to indict without having all the evidence that we're speaking about today.

KING: Got you. Thank you all very much. And, of course, you'll be hearing more about it. Are you a fan of "The Office?" You may known Rain Wilson as the hilarious Dwight. But he's getting political. Rain has written a special commentary. You can see it at And while you're there, download our podcast or sound off on our blog. It's all at

Tomorrow night, Joy Behar and Ann Coulter. And here's Anderson Cooper and "AC 360." He's here. Anderson?