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American Morning
Examining How the President's Housing Act Can Help America; Holden's Remarks Spark Reaction; The Cartoon That Set Off the Nation; Bringing Back the Muscle Car? Women Resorting to Bank Robbery; Obama's Plan in Afghanistan
Aired February 19, 2009 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: 7:00 -- 7:00 on the nose here in New York. A look at the top stories this morning.
A Swiss bank helping thousands of American taxpayers cheat. UBS, Switzerland's largest bank, admitted in federal court to helping taxpayers hide cash from the IRS. UBS agreed to pay close to $800 million in fine. It's going to have to name account holder names as well.
President Obama leaves for his first foreign trip in about two hours heading north to Canada to talk with Prime Minister Stephen Harper and other government leaders. Free trade and energy are expected to dominate the talks. Canada is the traditional first stop for a new U.S. president.
And very real fear this morning that a drug-fueled war in Mexico could spill over into the U.S.
(VIDEO CLIP)
The sound of gunshots as that reporter was trying to give a report there on camera. This is just one example of the extreme violence going on just over the border right now. Earlier this week, drug traffickers used a bazooka in a shootout with Mexican soldiers. This happened just south of Texas. ATF agents on this side of the border say that Mexican drug lords are better equipped than the military and that they're backed by corrupt officials.
Well, it's your home and your future and it's the focus of our coverage this morning. President Obama's new multibillion-dollar mortgage rescue plan, the goal to stop the nation's economic spiral by attacking the root of it. It could help millions of responsible borrowers lower their mortgage payments. The president gave details yesterday in Mesa, Arizona. It's a place that's been hard by the mortgage meltdown.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: 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 underwater or close to it, by modifying loans for families stuck in subprime mortgages they can't afford as a result of sky-rocketing 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.
(END VIDEO CLIP)
CHETRY: There were a lot of complaints, though, this morning that this plan misses the mark, that it leaves too many people out. So, who gets what? The administration says five million people whose mortgages are Fannie Mae or Freddie Mac guaranteed will have a chance to refinance. Another four million will be able to modify their home loan terms. And who gets nothing? Well, homeowners who are underwater by more than five percent, they are out of luck.
Stephanie Elam "Minding Your Business" this morning. She's also talking about the part of the plan that deals with modifying your home loan. Other people that are going to be out or anyone who has a jumbo loan because those aren't Fannie and Freddie backed loans.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Right.
CHETRY: And also people that don't have an income source, people that have gotten laid off. You mean, if you can't...
ELAM: Right. You got to show that you have some income to pay for it.
CHETRY: Right.
ELAM: Right. So that's part of the issue there.
Let's take a look at some of the things that are involved in modifying your mortgage. This is people who are at risk of default or are defaulting. This is also people who have high combined mortgage debt versus how much money they bring in, and obviously for those people who are underwater.
Now some people with high levels of debt may qualify. They may just have to go ahead and also agree to some debt counseling from the government. Now, if you qualify, mortgage payments will be then cut to being 31 percent of your gross income. The payments would stay at that level for five years, and then gradually make their way up to conform with loan rates at that time.
Reductions will come mainly through interest rate reductions. That's one thing that they're really targeting here to bring down these rates to make it so that people can afford it. And then we heard a little bit about this earlier but it's an interesting little note here that people, borrowers who do make their payments monthly after going through this plan could get up to $1,000 a year for five years for doing that.
Now, the Obama administration says that overall this plan would help three million to four million homeowners stay in their home by modifying there.
Now, one thing I should also mention here, the people who aren't eligible -- speculators, people who are just going out buying properties and renting them, not going to help them. This is all for people who are owners and this is their primary residence. This is where people are -- that's who they really want to help with this and rates, they're not going to go below two percent.
CHETRY: All right. Stephanie, thanks so much.
ELAM: Sure.
CHETRY: If you still got questions we have answers. Our personal finance expert Gerri Willis is monitoring our Web site, going through your questions about the housing plan, who gets what, who doesn't, and when you could actually see some relief. You can e-mail Gerri, CNN.com/am.
JOHN ROBERTS, CNN ANCHOR: Well, we are "a nation of cowards." Those words from the country's first black attorney general, Eric Holder. He was talking about race relations in his first major speech since being confirmed.
Our Jessica Yellin has got more on the attorney general's blunt assessment and the fierce debate that it has sparked.
(BEGIN VIDEOTAPE)
JESSICA YELLIN, CNN NATL. POLITICAL CORRESPONDENT (voice-over): Stinging words from the nation's first African-American attorney general.
ERIC HOLDER, ATTORNEY GENERAL: Though this nation has proudly thought of itself as an ethnic melting pot, in things racial we have always been and we, I believe, continue to be, in too many ways, essentially a nation of cowards.
YELLIN: He says Americans are afraid to talk about race.
HOLDER: Certain subjects are off limits, and that looks more than risk and at best embarrassment and at worse the questioning of one's character.
YELLIN: And he argues while the workplace is integrated, our private lives are segregated. Conservative bloggers are now slamming the comment as reprehensible and smug.
The facts suggest America is socially segregated. While the majority of African Americans live in central cities, the majority of whites live in the suburbs.
A new university of Illinois study shows that white Americans are less likely to find a neighborhood desirable if they see African- Americans living there. And African-Americans have been hit harder by the subprime mortgage crisis and have a five percent higher unemployment rate than the nation as a whole.
HILARY SHELTON, NAACP: What is provocative but is accurate? Very well, we don't talk about race in our country, and he's right, when he talks about even in the workplace, we've kind of learned to get along but we've learned to get along by omitting things.
YELLIN: The attorney general says he wants to start a new conversation.
HOLDER: I think if we're going to ever make progress we have to have the guts. We have to have the determination to be honest with each other.
YELLIN (on camera): The attorney general has also committed to making the enforcement of civil rights laws a priority, and he's calling on Department of Justice employees to help promote racial understanding.
Jessica Yellin, CNN, Washington.
(END VIDEOTAPE)
ROBERTS: And another controversy to tell you about this morning, this one over a cartoon in the "New York Post" newspaper. Civil rights leaders are blasting the publication saying it's likening President Obama to the violent chimp that was gunned down by police in Connecticut on Monday.
Our Anderson Cooper got reaction from a panel of experts last night.
(BEGIN VIDEO CLIP)
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: That cartoon is dripping with racism, you know, and to say anything else is to put a gloss on it but I think it's just not credible. I mean, we all know what the symbol of chimpanzee and baboons and that sort of thing have been used in the past, and unfairly to smear people in the past. That is the history of racism in this country.
RON CHRISTIE, FMR. DOMESTIC POLICY ADVISER TO PRES. BUSH: As a proud black man, I don't look at a chimpanzee as an African-American. I don't look at it as a reflection of who I am and who African- Americans are in this country. And frankly, if it's supposed to be a portrayal of President Barack Obama, the president didn't write the stimulus bill.
ROLAND MARTIN, CNN POLITICAL ANALYST: That was no chimpanzee with a sign underneath it that said Congress or said Pelosi or said "House Democrats." And so to sit here and to say that you can't equate the two, no. We understand that.
There is a history and a legacy and we talk about caricatures of Bush and Reagan, we also understood the criticism of people when it came to sexism with Senator Hillary Clinton in the race. There's a history there. There's a legacy there. That's the whole point.
CHRISTIE: OK, Roland...
MARTIN: I've ran three newspapers. If a cartoonist came to me with that cartoon, I would say, what is this? What exactly are you trying to say?
CHRISTIE: OK, Roland.
MARTIN: Do you understand what this means?
(END VIDEOTAPE)
ROBERTS: The cartoonist calls the controversy "absolutely frigin' ridiculous." As for the White House, Press Secretary Robert Gibbs says while he hasn't seen the cartoon, it's not really newsworthy and he says he doesn't spend much time reading the "New York Post."
CHETRY: A little dig there.
ROBERTS: One of those guilty pleasures.
CHETRY: Well, still to come, a shocking trend is on the rise. More women robbing banks? What turns a woman into a bank bandit? Apparently, it's a different motivation than what motivates men to rob banks. Hmm. The last one just ahead.
ROBERTS: And remember when American cars with big engines were cool, what begging for bailouts could do to your image and your bottom line? The vanishing American muscle car.
CHETRY: Also, Uncle Sam, the marriage broker. Why millions of taxpayer dollars are being spent to drive Americans down the aisle.
It's nine minutes after the hour.
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CHETRY: Live look at the White House this morning. President Obama talking trade and how it affects your job on his first foreign trip since taking office. He's headed to Ottawa. It's Canada's capital on Air Force One in about two hours. Now, both neighbors desperately trying to battle the global economic crisis.
White House correspondent Suzanne Malveaux is live on the North Lawn for us. So what will be the big focus? Of course, we know economic issues but on this trip?
MALVEAUX: Kiran, obviously, the economy is going to be issue number one. It will be interesting to see how these two leaders actually interact. It's the first time they'll meet face-to-face in person in Canada.
President Obama has an 82 approval rate, percentage approval rate here. Obviously, there was a close relationship with President Bush and Prime Minister Stephen Harper, so we'll see how these two leaders actually get through some of these difficult issues.
But first and foremost, you look at the automaker industry, the big three out of Detroit. Two of them, GM and Chrysler, obviously, looking to more money in the billions from our own government but there are plans in Ontario that are looking for the same from the Canadian government more than $3 billion. They have to prove that they can be solvent, that they can be profitable companies. That is one of the items that's going to be on the agenda.
Obviously, trade is also going to be an important one. If you take a look at the economic stimulus package, $787 billion, there is a clause that says "buy American," which requires that some of these projects using the federal dollars actually buys steel or iron that is made in the United States, Canada, nervous about that particular clause, what does it mean for them.
We had heard as well over the campaign trail President Obama, then the candidate, talking about renegotiating NAFTA. We heard that when he was in Ohio, battling it out with Senator Hillary Clinton, that he thought that the trade agreement with Canada and Mexico had to be renegotiated. A lot of concern that it was taking away U.S. jobs, but we heard from President Obama saying that he's going to talk, he's going to sit down and talk with Harper about many of those things. This, among a lot of issues, Kiran.
We're talking about the environment as well as Afghanistan, another really hot issue. As you know, U.S. troops -- more U.S. troops going to the war zone in Afghanistan, where at the same time the Canadian government is pulling out their forces. Their own prime minister making that commitment by 2011. There's not going to be those 2,700 Canadian troops, so these are a lot of issues that these two have to deal with and we're talking about, Kiran, in a matter of seven hours -- Kiran.
CHETRY: All right. A lot going on. Suzanne Malveaux for us this morning, thanks so much.
Also, join CNN and the best political team Tuesday night as President Obama makes his first address to the nation on the state of the economy and more, followed by special post game on "AC 360 and a special edition of "LARRY KING LIVE" at midnight. You can also watch along with your Facebook friends at CNN.com. It all happens next Tuesday starting at 9:00 Eastern.
ROBERTS: President Obama unveils his $75 billion effort to fix the housing crisis, so do you qualify for help and will the plan work? We're asking the president's point man on the issue, Secretary Shaun Donovan. He's joining us live, coming up after the break. Stay with us.
The Barbie bandits were just the beginning.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: It felt powerful, exciting.
ROBERTS (voice-over): Sudden surge in female bank robbers. This one's coming clean.
UNIDENTIFIED FEMALE: I wanted some money, fast, quick money, a whole lot of it. UNIDENTIFIED FEMALE: She just waited patiently.
UNIDENTIFIED MALE: And wait patiently for the teller to say next.
ROBERTS: Brazen women, holding up banks.
UNIDENTIFIED MALE: It's an equal opportunity crime.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
PATTY LEWIS, CNN IREPORTER: My husband is 56. He lost his job in January, 2008. I am disabled since 2003. We adjusted to 35, 40 percent loss of income back then.
Since my husband's been out of work, we used his severance. We cashed in his 401(k) to keep us responsible to our lenders. Unfortunately, now, we have our letter of intent of foreclosure because those funds are depleted.
(END VIDEO CLIP)
ROBERTS: Welcome back to the "Most News in the Morning. It's people like iReporter Patty Lewis that President Obama says he wants to help with his $75 billion housing plan. But who is going to qualify for help? Will you? And can this plan give struggling homeowners the help that they really need?
Still a lot of unanswered questions this morning so we're going to try to get some answers for you.
Joining us now from the White House, the secretary of Housing and Urban Development, Shaun Donovan.
Mr. Secretary, it's good to see you this morning. So this plan is targeted at people who are making payments on their home but their house has lost value or people in danger of foreclosure. Can you explain to folks out there exactly who is eligible for help here?
SHAUN DONOVAN, HUD SECRETARY: Well, there were three parts to the plan that the president announced yesterday. First of all, backstopping Fannie Mae and Freddie Mac. They make more than two- thirds of all the mortgages in the U.S. today, so every American family that's looking to get a loan just about will benefit from that.
Secondly, refinancing that's available to families that are current on their payments but are so-called underwater, meaning that their house is now worth about the same or just more than their mortgage. They haven't been able to refinance to today's record low rates and they will be able to with this plan.
And then third, to help families stay in their homes, we're going to modify mortgages for families that have payments that are too high for their income. And our definition of too high is they're paying more than 31 percent of their income towards housing.
ROBERTS: All right. So you would have subsidies and deals with mortgage companies in order to lower those payments back down to the 31 percent threshold.
Let me focus in on what you just said about people whose homes are slightly underwater, people whose homes are worth slightly less than the amount of money that they owe on it. The figure that you came up with was five percent. So if you had a $200,000 loan and you had a $210,000 mortgage on it, you would qualify.
DONOVAN: Yes.
ROBERTS: Why did you cap it five percent? When you look at the market like Phoenix, where the president was yesterday, home prices have gone down an average of 40 percent there. You figure people -- people financed 80 percent of that, they could be underwater as much as 20, 25 percent. Why not help those folks?
DONOVAN: Well, just to be clear, folks who are more deeply underwater, those are the folks that are very likely to be having trouble paying their mortgages. Those are folks that we're focused on with our modification program so it's not an either/or. We have multiple solutions here that we think can reach seven million to nine million homeowners that are most at risk.
ROBERTS: You've also got some incentives, like $1,000 to mortgage holders if people make their payments on time.
DONOVAN: Right.
ROBERTS: You got a payment reduction which adds up to about $1,000 a year for people who make their payments on time. You've also got subsidized rates. What about people who are sitting there at home saying hey, I've been struggling. I've been making my mortgage payments. I'm in fine shape. Why don't I get a piece of this pie?
I'd love to pay a little bit less or I'd love to refinance for some of these subsidized rates down around 3.5, 4 percent?
DONOVAN: Two things I would say. First of all, our backstops to Fannie Mae and Freddie Mac will make sure that today's record low rates remain and that they're available to millions of families across the country. But the other thing that I think is critically important to remember here is that if you have a foreclosure next door to you, you're paying your mortgage, you're doing fine, but there's a foreclosure next door, a recent study shows that your house drops by nine percent in value. That's about $20,000 for the average homeowner. So the idea here in stabilizing the market and stopping foreclosures is to help all families and communities by making sure that we don't continue to have this really drastic decline in housing prices that we've seen over the last year.
ROBERTS: And just quickly, Mr. Secretary, how quickly can you get help out to people?
DONOVAN: Very quickly, by March 4th, as the president said yesterday, we will have all the details of the plan out to servicers. We have many of the servicers, most of them in fact, who've already announced that they're going to stop foreclosures, until that march 4th date. So we believe we can get help into the hands of millions of families that need it very, very quickly.
ROBERTS: Good luck. Hope this works because there's an awful lot of people who need help.
Secretary of HUD...
DONOVAN: You're absolutely right.
ROBERTS: Secretary of Housing and Urban Development, Shaun Donovan, good to see you this morning. Thanks so much.
DONOVAN: Great to be with you, thanks.
ROBERTS: Appreciate you coming on.
If you still got questions, we've got the answers. Our personal finance expert, Gerri Willis, is monitoring our Web site, going through your questions about the housing plan, who gets what, who doesn't, when you could see relief. E-mail Gerri at CNN.com/am and she'll try to get you some of those answers.
Twenty-three minutes now after the hour.
CHETRY: When cars were cool. What begging for bailouts can do to your image and your bottom line, and your future?
(BEGIN VIDEO CLIP)
JOHN DAVIS, HOST, "MOTORWEEK": Passion is a key to the American car buyer and to the American car design.
CHETRY (voice-over): Glory days, gone for good?
JIM ACOSTA, CNN CORRESPONDENT: Just sitting in this car, you feel like you're stepping back in time.
MATT HOLTZMAN, GENERAL MANAGER, FLEMINGS ULTIMATE GARAGE: You are.
CHETRY: The comeback of the cool American car. Can Detroit do it? Ahead on the "Most News in the Morning.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
ROBERTS: Nicolas Cage taking the high road in "Gone in 60 Seconds" in a '67 Mustang Fastback. Ah, when the American muscle car was king, when four doors were two too many, when a V8 was more than a tomato juice. But now, with Detroit on life support, carmakers are planning to pull the plug on some of the most recognizable brands.
AMERICAN MORNING's Jim Acosta joins us live from Washington now. I guess Nick Cage is going to be taking the Toyota Prius over that jump in the next film.
JIM ACOSTA, CNN CORRESPONDENT: John, that is exactly what we're trying to talk about here. When you and I were 16 years old, and I don't mean to disparage foreign car owners, we wanted an American car, right? Those were the days. American cars were the best in those days, and Americans bought American cars not to be patriotic because they were the best.
Take Pontiac, the Trans AM, the GTO, the Firebird, they had muscle and they came from a brand that once stirred the passions of car buyers, but now need a bailout to stay alive.
(BEGIN VIDEOTAPE)
ACOSTA (voice-over): If the '70s were good for one thing, it was American cars. They were cool, they were fast. And Hollywood made movies about them.
"Smokey and the Bandit" was just as much about the Pontiac Trans Am, as it was about Burt Reynolds. But today, they're not laughing in Detroit. In its plea for billions of new bailout money, General Motors plans to downsize Pontiac, not quite killing it off as GM says it may do with Saturn and Hummer but close.
DAVIS: Clearly, Detroit lost its passion for cars.
Hello, and welcome again to "MotorWeek."
ACOSTA: For more than a quarter century, John Davis' has hosted PBS' car consumer show "MotorWeek." He says Detroit built cars that defined an era that's in danger of coming to an end.
DAVIS: The American auto industry is in a mess, too much involved with trucks, and the public sentiment changed and they weren't able to change fast enough.
ACOSTA: A V8 is a V8.
HOLTZMAN: Yes. Sounds different, feels different. Brings back memories of when I was a heck of a lot younger.
ACOSTA: Matt Holtzman is the general manager of Flemings Ultimate Garage, a small-scale classic car dealership.
(on camera): Just sitting in this car, you feel like you're stepping back in time.
HOLTZMAN: You are.
ACOSTA (voice-over): The '79 Trans Am Bandit is one of its showroom showpieces. The T-top still works.
HOLTZMAN: It's iconic as a brand.
ACOSTA (voice-over): He hopes the bailout will drive the auto giants back to their glory days.
HOLTZMAN: I hope someday someone will replicate this car exactly as it looks.
ACOSTA (on camera): And put it on the road.
HOLTZMAN: Put it on the road.
ACOSTA (voice-over): GM insists it's doing all it can to get back in the driver's seat.
UNIDENTIFIED MALE: Obviously what we can do on our side is continue to bring out really exciting products and get behind them in the right way.
DAVIS: I think passion is a key to the American car buyer, and to the American car design.
ACOSTA: Something even "Smokey" could appreciate.
(END VIDEOTAPE)
ROBERTS: Good old Jackie Gleason.
General Motors is not quite giving up on the muscle car. It's rolling out a 2010 Camaro that's supposed to -- get this -- get 26 miles per gallon on the highway. That's change GM hopes the Obama administration can believe in.
And, John, a one sad footnote to all of this, GM announced just yesterday it is closing its high-performance vehicle division sending the mechanics, the engineers who worked on those cars to other parts of the division.
If you go to their Web site, those are the hot rods, and those mechanics are now going to different parts of GM, basically like sending Picassos out to paint houses. That's what they're going to be doing.
ROBERTS: Well, I mean, if they paint them very nicely though, it will be an asset. What's your favorite muscle car, Jim?
ACOSTA: John, that Trans Am. And I wanted to drive that thing off the lot yesterday. You know what? Blame it on my dad, he took me to every Burt Reynolds movie that came out. Even when it wasn't advisable for children of my age, I got hooked on those cars.
ROBERTS: I'm a '64 Shelby Cobra or maybe a '63 split window Corvette. Those are really good cars.
ACOSTA: All right. Not bad.
ROBERTS: Jimmy, thanks so much. ACOSTA: You bet.
ROBERTS: Coming up to the half hour now, and here are this morning's top stories. Tornadoes touching down. Hail cracking windshields and trees splitting homes. A severe winter storm sweeping over the southeast.
Georgia Emergency Management says more than 100 homes were damaged and that this could be a dress rehearsal for the spring tornado season.
Panicked American investors are being turned away from Antigua this morning. Some traveled there by private jet to try to get their money back from a bank owned by fugitive financier Robert Allen Stanford. The feds say he ripped off investors to the tune of $8 billion.
Governor Sarah Palin ordered to pay back taxes. Alaska officials ruled that the former vice presidential candidate owes the IRS for meals and other expenses that she billed to the state while she lived in her own home in Wasilla, not the governor's mansion. We don't know the exact amount but the "Associated Press" puts the tab at more than $17,000. Palin spokesperson says the governor will abide by all IRS regulations. Good idea.
The reporter who flung both shoes at President Bush and called him a dog is headed to court and was greeted with applause this morning. An Iraqi judge delayed the trial until next month. The man has been in jail since that infamous news conference on the 14th of December. He faces of charges of assault on a foreign leader - Kiran.
CHETRY: All right. Well, the jury is still out on president Obama's $75 billion plan to save struggling homeowners. Among the economists and financial experts' opinions are split over whether this plan will really work.
In the president's plan, there are two basic solutions helping more homeowners get new low-interest rates and incentives for lenders to make more mortgages more affordable. So joining me now is real estate analyst Danielle Babb, the founder of the Babb Group and the of "The Accidental Landlord," also John Taylor, president and CEO of the National Community Reinvestment Coalition.
John and Danni, thanks to both of you for being with us this morning.
DANIELLE BABB, FOUNDER, BABB GROUP: Good morning.
JOHN TAYLOR, PRESIDENT & CEO, NATL. COMMUNITY REINVESTMENT COALITION: Good to be here.
CHETRY: We want to make it easy for people to understand. Let's tick through at a couple of the highlights of this plan. And I'd like both of you to weigh in and we'll start with you John. First of all, the part that wants to help people who need to find a way to refinance that were previously turned down for this because they no longer had 20 percent equity either because of dropping home values or for whatever reason they owe more than their home is worth.
TAYLOR: Right, so this is a very sensible part of the plan. It takes people who are still working but for the economy and what's happened in the housing crisis, they're stuck in a mortgage that puts them in jeopardy, and perhaps leans them towards foreclosure. It's what the president's done and I think it's a smart move, is to assist those people to get back into the financial services system by having them access mortgages that are going to be more in line with their property value and with their ability to pay. So that makes a lot of sense
CHETRY: And Danni, this is interesting. Because some people say wait a minute I've been on the phone with my bank. I've been on the phone with lenders. I've been trying to make this happen for our household for what seems like months to no avail. What's different now because of this plan?
BABB: Well, lenders have been doing mortgage modifications for some time and those who were unable to get a modification were unable to for several reasons, either they were upside down, too far upside down on their mortgage, maybe 20 or 30 percent or their credit score was simply bad. So in this particular plan, they're able to refinance if they qualify for a Fannie or a Freddie loan. That's the caveat here. So they cannot be a jumbo loan.
If they qualify under the Fannie or Freddie plan, then they're able to not renegotiate but actually refinance their home without having the 20 percent equity.
CHETRY: All right. This is also interesting, John, homeowners that are either in some stage of default or they are at risk of defaulting may qualify to have their monthly mortgage payments reduced basically to 31 percent of their gross income. A couple of things about this. How will this work?
TAYLOR: Well, it's a combination of lender services, the government and the borrower working together to get that down to 31 percent. So the investor, the service that represents those investors, represents the bank, would cut interest rates or principal to get it down to 38 percent, and then the goal really is to get it to 31 percent of income. That only 31 percent of a household's income goes to its housing. So what would happen at 38 percent, is the government would share in the cost of reducing that mortgage, the interest rate, so that it reaches 31 percent, 50/50 with the lender.
CHETRY: And Danni, it seems like a sticky situation in how you figure this out, how do you prove income, who is the agency or the group that's going to be shepherding all of this, would it be the federal government? Would it be the individual lenders? How do you see that going?
BABB: Well, I see it being handled by the federal government which I think is unfortunate. To this 31 percent DTI rule, debt-to- income ratio rule, I think this is a really frightening prospect. Because the sharing between the government and the banks is actually sharing between those paying their mortgage on time, the taxpayers and those banks that are actually out there trying to help people.
We already know that banks are taking a lot of resources that were on the lending side into the modification side, that's happening already. It's happening in record numbers and I think we need to keep some standards here with regard to FICO, debt-to-income ratio and so on.
CHETRY: Right.
BABB: So that we don't have people redefaulting again which we are seeing in so many cases.
CHETRY: And quickly, we just to have to make it quick. The people sitting at home, saying wait a minute, this doesn't seem fair to me I'm also struggling. I'm making my payments and giving up pretty much everything else. Why should other people who are not at risk of foreclosure be on board with this plan? Quickly, John and Danni.
TAYLOR: Yes, well for one, many of them will be eligible to refinance but also they're losing their value in their homes as every foreclosure mounts as more and more people go in to distress and our entire economy is suffering for it. So we really need to look at this as we're in this together and the no-brainer things that we ought to do is we need to help those people who are still working, get into the kind of mortgage that they're not going to default on.
CHETRY: All right. Danni.
BABB: Yes, they shouldn't be on board with this plan, in my opinion. We have to expect that homeowners if they are going to go with this plan then we need to demand as taxpayers that they have to put all of their assets on the line when they sign up for the modification, just as a college student has to do when they go get a student loan. That's the bare minimum. Taxpayer out there paying a mortgage should not be happy with this.
CHETRY: All right. Danni Babb as well as John Taylor, I appreciate both of your opinions and insight this morning. Thank you.
BABB: Thank you.
CHETRY: We also have our own financial expert, our personal finance expert Gerri Willis who has been monitoring our website. She's going through some of your questions about the housing plan. And one other interesting thing for Gerri is, what about if you don't have an income. People that have been laid off in this tough financial crisis? Who gets what? Who doesn't, and when could you actually see some relief? E-mail Gerri, cnn.com/am.
ROBERTS: They are Bonnies holding up banks without a Clyde. It's a shocking statistic. Why are more and more women robbing banks?
Why the government wants you to get married and spending a big chunk of change to make sure you get the message on matrimony. And when it comes to race relations in the United States are we "a nation of cowards"? Those remarks from the first African-American attorney general. Is he wrong or is it the ugly truth? We'll find out.
It's 37 minutes after the hour.
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CHETRY: Bank heists are the stuff of Hollywood legend. But when you picture a thief you probably think of a man. Police though say they are dealing with a growing trend, more women getting in on the act. So why do they do it?
Our Deb Feyerick went looking for an answer. You really don't think of women as bank robbers.
DEBORAH FEYERICK, CNN CORRESPONDENT: You don't. A lot of people in law enforcement didn't either. But now they're changing their thinking all together. The woman you're about to meet, she robbed a bank because she was going through a terrible divorce. She hooked up with the wrong guy and felt she had nothing left to lose. Simpler reasons however women need the money and banks, believe it or not, are the safest place to get it.
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UNIDENTIFIED FEMALE: Everybody get down on the ground right now. Get your hands up. Move back.
FEYERICK (voice-over): The film is called "Set it off." Armed women robbed a bank. It's just a movie or is it?
"JANE," FEMALE BANK ROBBER: It felt powerful, exciting.
FEYERICK: Meet Jane, fake name, real life bank robber, who stole $10,000 in her first heist by quietly slipping the teller a note.
JANE: "We are armed and don't say anything, just give us all the money."
FEYERICK: Across the country, police are seeing a small but steady rise in the number of women robbing banks. It's a trend experts say likely to continue.
UNIDENTIFIED MALE: Here's a crime you can commit easily, and it's an equal opportunity crime.
FEYERICK: The most notorious female bank robber of course was Bonnie Parker of Bonnie and Clyde fame. Now, the more memorable are the giggling teen Barbie bandits captured last year in Georgia, Northern Virginia's cell phone bandit caught in 2005, and the starlet bandit still on the loose in Los Angeles.
When you look at this as a female bank robbers, that was you. You had your picture. JANE: That was me. I loved the danger in it. I wanted some money, fast, quick money, a whole lot of it.
FEYERICK: At most banks, tellers are told to hand over the cash rather than put anyone at risk.
She'll get on line and wait patiently for the teller to say next.
FEYERICK: John, who heads up the Nassau Country Robbery Squad in Long Island, said he went from zero female robberies in his career to 15 in the last three years. He says men typically rob for the thrill or to support an addiction. Women are usually different.
They seem to think it out more, doing it more to pay bills, a little extra cash.
JANE: Was it worth it? No.
FEYERICK: Eighty percent of all bank robbers like Jane are caught.
JANE: It's embarrassing to my children. "My mother robbed a bank." You have to think about your children, your friends, your family, their lives and how they feel. You will get caught.
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FEYERICK: Now, "Jane" spent five years in the maximum security prison. She was recently released and is working hard to rebuild her life. In the meantime, the head of the robbery squad says with the bad economy he expects to see more bank robberies, women desperate to get out of financial trouble.
CHETRY: One of the things you pointed out, 80 percent of them plus get caught.
FEYERICK: It's a felony.
CHETRY: You don't really necessarily get away with it very often.
Deb Feyerick, thanks so much -- John.
ROBERTS: President Obama trying to pull the root of the recession right out of the ground. A new multibillion-dollar housing rescue plan. There's help for millions but who is left out? Our Gerri Willis is here taking your questions. She'll have the answers for you coming up.
It's 42 1/2 minutes after the hour.
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ROBERTS: Welcome back to the Most News in the Morning.
President Obama's new housing rescue plan is the focus of our coverage this morning. We're looking at the fine print to find out what's in it for you. Our personal finance editor Gerri Willis has been checking our website.
A lot of people have been sending in their thoughts and a lot of questions. She's been responding to your e-mail.
Good morning to you.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Good morning John. Good morning, Kiran. Good to see both of you. Let's get that first question, Haq from Virginia asks "I pay my mortgage on my house but now it's getting hard. Does this new loan modifying plan, can it help me or not? What should I say to my banker? Should I stop paying my mortgage?"
Well, Haq, don't stop paying your mortgage. Not yet anyway because help is on the way. You may be eligible for this new loan modification program that the government has put together, it announced yesterday which could drive your costs each and every month to 31 percent of your income. Think about it. Your monthly income, 31 percent of it will be going to your mortgage costs, this would be much more affordable to you. You may be required to get some counseling, debt counseling to qualify for this program. Devil is in the details here.
We'll also have more details on the 4th of March. Let's get the next question in, Mehdi from California asks "Can you please explain how the new housing bill will help homeowners who have paid their home off? Do we somehow get rewarded for being proper? Can you suggest a way for example to refinance to benefit from this bill?"
Well, Medi, if you paid your house off, there really is no direct program for you in this particular program. But I have to tell you, if there are a lot of foreclosures in your neighborhood, there is a plan in the stimulus bill to help those neighborhoods out by spending money there, to take care of those homes, bring them back. You may get some help from there but in terms of getting new money, sorry, you're out of the loop.
ROBERTS: All right. OK, well, at least you've got some answers for some people out there.
WILLIS: That's right. Well not everybody gets money out of this program.
ROBERTS: Yes, exactly. All right. If you've got a question, you can send it to Gerri. E-mail her at cnn.com/am. She'll be answering more of your questions coming up in our next hour here.
CHETRY: Well now that President Obama has announced the deployment of 17,000 additional troops to Afghanistan, could it turn the war around? We're going to talk to the chairman of the Atlantic council, former Senator Chuck Hagel.
(COMMERCIAL BREAK) CHETRY: Welcome back to the most news in the morning. "I do." It's really easy to say but the federal government thinks that many people are forgetting what those two words really mean. So it's spending millions on an ad campaign to promote healthy marriages. A lot of people are scratching their heads and saying, wait a minute, is this money well spent?
AMERICAN MORNING's Carol Costello joins us live from Washington this morning. Hello, Carol!
CAROL COSTELLO, CNN CORRESPONDENT: Hi, Kiran. It is a head- scratcher, isn't it? But did you ever realize how many jokes there are about marriage, like the secret of a happy marriage remains a secret? And my wife and I were happy for 20 years! Then we met. Those are jokes.
Well Uncle Sam wants you people to know marriage is no joke and he is using your tax dollars to tell you marriage is good for you.
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COSTELLO (voice-over): Many studies show marriage is good for you. A good one generally makes you healthier, wealthier and happier. But if you take a look at Hollywood, marriage is war, even before the "I dos."
UNIDENTIFIED FEMALE: Your wedding can suck it.
COSTELLO: In the movie "Bride Wars," two young women buy not for love and a happy marriage but for the perfect wedding. Some say that's a terrible message sent at a time when more young people than ever are rejecting marriage.
Federal statistics show 7.1 marriages per 1,000 people in 2008. That's down from 10 per 1,000 people in 1986. And the government wants to reverse that trend.
PAUL AMATO, PENN STATE UNIVERSITY: Young people in the United States are somewhat confused about marriage. Marriage has changed a great deal in the last several decades and the old rules really no longer apply.
COSTELLO: Paul Amato wrote "Alone Together, how marriage in America is changing" and is an adviser to the National Healthy Marriage Resource Center which is government funded and designed to extol the virtues of marriages for 18 to 30-year-old.
It means 5 million of your tax dollars will pay for pro-marriage ads on youtube and myspace and a website called twoofus.org, designed to get a conversation going about what marriage is. It's an initiative that was born in the Bush era.
GEORGE W. BUSH, FMR. U.S. PRESIDENT: Marriage is critical to the well-being of families.
COSTELLO: And one that will be launched by the Department of Health and Human Services, even though President Obama has yet to name someone to run HHS. As for how such an initiative might lure more young people to the alter? Well, we asked.
UNIDENTIFIED MALE: Is his something the government should be doing?
UNIDENTIFIED FEMALE: No.
UNIDENTIFIED FEMALE: That's not really the federal government's business.
UNIDENTIFIED MALE: If people are going to get married, it's like, yo, let's get married!
UNIDENTIFIED MALE: I would laugh if I saw an ad that said Americans should be getting married.
UNIDENTIFIED FEMALE: You should want to get married because you want to. You don't need someone to teach you the value of -
UNIDENTIFIED MALE: OK. It's not like they are telling you get married, you know what I'm saying?
UNIDENTIFIED FEMALE: No.
UNIDENTIFIED MALE: They are just like, you know shedding light on the values behind it.
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COSTELLO: It's a conversation-starter, that's for sure. Paul Amato, the marriage researcher I talked to says promoting the virtues of marriage is important. He says divorce costs us $100 billion a year for things like family court and aid for single mothers. Marriage, a good marriage generally means you're happier and more likelier to accumulate wealth but it will cost you $5 million in tax money to get that message out there -- Kiran.
CHETRY: Carol, that's why we love having you, you always find those stories for us. All right. Thanks so much.
COSTELLO: Sure.
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CHETRY (voice-over): Street battle. Where bullets fly in broad daylight right over the border.
Plus, name-calling.
ERIC HOLDER, U.S. ATTORNEY GENERAL: A nation of cowards.
CHETRY: Hold on, Mr. Holder.
UNIDENTIFIED MALE: For goodness' sake, we have an African- American president and attorney general. Let's say something positive about race relations in this country.
CHETRY: Backlash over the attorney general's harsh words. You're watching the most news in the morning.
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ROBERTS: A month into his presidency, the Obama administration is pushing ahead with its new military plan for Afghanistan. The President ordering 17,000 more troops to the war zone this spring and summer. Mr. Obama saying in a statement, Afghanistan, "has not received the strategic attention direction and resources it urgently requires." The general in charge of the campaign expects the new troops to be there for the long haul.
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GEN. DAVID MICKIERNAN, U.S. & NATO CMDR. IN AFGHANISTAN: I would reinforce what I said that this is not a temporary force uplift that is going to need to be sustained for some period of time. I can't give you an exact number of the year that it would be, but I've said, I'm trying to look out for the next three to four to five years.
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ROBERTS: Joining us now from Washington to talk about the new strategy, former Nebraska Senator Chuck Hagel, who is the new chairman of the Atlantic Council. Congratulations on your new position. It's good to see you, sir.
CHUCK HAGEL, FMR. NEBRASKA SENATOR: John, thank you very much.
ROBERTS: President Obama sending 17,000 troops to Afghanistan and the General David McKiernan says he would like to have 10,000 more. What do you think of this initial surge? Is it too little, is it just right?
HAGEL: Well I think first we have to recognize where we are. We are now in our eighth year in Afghanistan and by any measurement, things have gotten worse over the last two years. With the additional 17,000 troop commitment, we're going to have over 60,000 American troops in there, more than 30,000 NATO troops and we'll have close to a 100,000 total troops in there by the end of the summer.
As you know, the president has asked for a review of our policies in Afghanistan going forward. I thought he said it exactly right yesterday, John. We're not going to solve this problem. The bigger problem here, the regional problem of terrorism in that South Asia/Central Asia area with troops. The Russians found that out. The British found that out before the Russians did. But I think the appropriate approach here is caution, be careful. I think the president had no choice but to inject more fire power in there.
But we need to figure out what is the goal here? What is the objective? Because the future of Afghanistan is directly connected to the future of Pakistan with Iran on the other side and I think this is another reason why we have to engage Iran.
ROBERTS: So what do you make of this deal that the Pakistani government has been trying to cut with the Taliban in those federally administered tribal areas to allow them to practice Shariah law? Our understanding is that this agreement has not been finalize that the Taliban has not signed off on it and may not sign off on it. But just - I mean just as a symbol, what does that say?
HAGEL: Well, I don't have all the details to start with and the facts. So I would give you my observation based on very limited knowledge of really what they're doing.
First, the Pakistani government is in deep, deep trouble. They're bankrupt. They have a huge agenda of problems. We know that area between Afghanistan and Pakistan, that area that the S.W.A.T., the northwest territories, the Fadir area has been ungovernable for centuries. There is going to have to be some accommodation made with the Taliban whether this approach is the right approach or not.
I don't know. But we're going to have to find some new ways to do this, John, because we're going backward. We're losing. Everybody is losing in that area. And the stability and the security and the future of the Pakistani government is at risk here, too.
ROBERTS: Yes, you sort of alluded to this a little bit, a couple of seconds ago. Afghanistan is known as the graveyard of empires. There is no outside force that has been able to tame Afghanistan. You look at Russia. You look at Britain, you know, throughout the ages. Is the U.S. destined to fail there as well or could our experience there actually be different?
HAGEL: Well, it could be different but I think we should not dismiss history. We should not dismiss the reality. For example, the Soviets had 160,000 troops in there at one time. You can't lose the people, John. We learned that in Vietnam, throughout history. You have to have the people with you. And I fear that's not the case in Afghanistan.
I don't think it's too late. But this is why a reappraisal of our policies in Afghanistan are very appropriate and very real. Everyone is looking at that reappraisal and the president is going to have to make, I think, some difficult decisions later on this summer on this.
ROBERTS: Former Senator Chuck Hagel now, the chairman of the Atlantic council, it's great to catch up with you again. I hope that we can make this a regular occurrence.
HAGEL: Thanks, John.
ROBERTS: All right. Appreciate it. Kiran.
CHETRY: Coming up on 8:00 here in New York.
