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Tips on Coping with Foreclosure; Hundreds Attend D.C. Job Fair; Where is Stimulus Money Going?; Program Helps Low-Income Youth to Help Others; More Details Emerge about AIG Bonuses; White-Collar Workers Turn to Other Employment after Layoffs

Aired March 17, 2009 - 13:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Next stop on the "ROAD TO RESCUE." That's us. It's your own front door, as well. Recovery begins at home, and a big push forward in construction just may be a start.

Push back to stay put with the "CNN Survival Guide." Fighting foreclosure. This hour Gerri Willis shows you how to keep your house.

Hello, everyone. I'm Kyra Phillips live at the CNN world headquarters in Atlanta. You're live in the CNN NEWSROOM.

Desperate times call for unprecedented coverage. All week long, CNN is covering the economic meltdown as only CNN can. The "Road to Rescue" begins with a simple idea: knowledge is power. Power to find or keep homes, jobs, savings and hope. For the big picture, the family snapshots, the starts and the stories, stay on "The Road to Rescue: The CNN Survival Guide" all week long.

Up first this hour, breaking ground and raising hope. From the depths of America's housing crisis comes an unexpected surge in construction. Housing starts shot up 22 percent last month with new apartment projects leading the way. Building permit applications rose, too, a little. In both cases, economists expect it to climb.

And none of this matters if you're on the brink of foreclosure, as more than two million of us were last year alone. By some estimates, a house is lost to foreclosure every 13 seconds. But it doesn't have to be yours. Gerri Willis joins me now with a page from the "CNN Survival Guide."

Gerri, why don't we go ahead and start with the time line? And how does the trouble start?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: OK. Well, to understand foreclosure; you've got to understand how it works. Right?

Here's a time line. Remember, this all varies by state. But typically when it goes through the court system starts when you miss a payment. Your lender starts reporting you to credit bureaus. Your credit score, it takes a hit with every missed payment.

And after three months of this, your lender will probably file a letter of intent to foreclose or a notice of delinquency. You'll get this as certified mail. Now, two months after that, if you continue not to make payments, your lender will file a formal foreclosure lawsuit. This is when the deputy or the local sheriff walks up your sidewalk and hands papers over to you at the front door. And this is when the legal process starts.

In some states it can take up to a year or more to have your home sold. In other states, the process is faster. It depends on where you are. But I have to tell you, these are the basics. These are the basic guidelines -- Kyra.

PHILLIPS: All right. Well, let's go ahead then. Then how can people modify their mortgages?

WILLIS: All right. So one out for you out there, if you're worried about foreclosures, try to get a new loan. Modify your existing mortgage is a good option. It's basically a change in your loan terms. A modification can lower your monthly mortgage payments or allow you to skip a few payments. Sometimes your loan is simply extended and made longer.

Nearly all the big banks have some sort of modification program in place, and the government has outlined two programs designed to help homeowners. Now, they call it the Homeowner Affordability and Stability Plan. Part of it helps people who are current in their loans to refinance under fixed-rate loans. The other one is a loan mod program for delinquent borrowers. There's some loan forgiveness, assistance. If you want details go to FinancialStability.gov.

And Kyra, I have to say, if you don't get into one of the government programs or your lender won't help you out, you can always try to find a buyer on your own. Remember, though, if the house is simply too expensive for you, you're either going to have to try to find a loan that helps you out or sell it, get out of it, get rid of it. It's not worth having this albatross around your shoulders.

PHILLIPS: Especially when we don't know what's going to happen for months to come. All right, Gerri, appreciate it.

Sky-high mortgage and a plunging income add up to trouble for one Virginia family. Gerri is actually going to rejoin us a little later this hour with a Nicole Botkin, a wife and mom who still hopes to keep her home for life.

And we want to know what you want to know. Whether you're buying, selling, saving, staying or moving, send us your questions about housing. Our address is CNNnewsroom@CNN.com. Gerri Willis has answers for us next hour.

The foreclosure crisis may have started with subprime mortgages, but the latest wave of lost homes is tied to lost jobs. And that brings us to a job fair under way right now in Landover, Maryland. We're already getting iReports. Here they are.

(BEGIN VIDEO CLIP) CHARNITA TYLER, IREPORTER: My first job fair, and I'm just hoping for the best like all these other people. You know, we have bills and mortgages and families to take care of. So it's really scary to me. But like I said, it's only been a week for me, but I never thought I'd be in this situation but here I am.

(END VIDEO CLIP)

PHILLIPS: It's being called a diversity employment expedition. And diverse describes the employers, too, from Avon to the U.S. Secret Service. Our Barbara Starr is actually there.

Barbara, how's the turnout?

BARBARA STARR, CNN CORRESPONDENT: Well, Kyra, as you can see behind me, this line several hours into this job fair is just stretching around FedEx Stadium, the home of the Washington Redskins here in the metropolitan Washington area.

But today, here, it is all about jobs at this diversity job fair. Hundreds of people still hours later continuing to arrive, making their way inside the stadium to talk to some of those employers.

An awful lot of folks facing hard times. We're hearing stories about layoffs, no health insurance, really struggling to make ends meet.

And I want you to meet a gentleman that we were talking to a few minutes ago. This is Marshall Brown, who was telling us about being laid off from his maintenance job and the struggles that he's having.

Marshall, I wanted to ask you to go back over it. Tell people right now just how hard it is to pay the bills, to make ends meet since you got laid off from your maintenance job.

MARSHALL BROWN, JOB SEEKER: Yes, it's very hard. Like I said, you have your insurance with the job and you lose your job. You lose that, too. And like I say, you're paying child support out of your check. You know? That ends. So it's like, man, it's struggling right now.

I've going, calling, Internet, doing everything. And I'm still not getting it right now. So it's hard. It's hard. Very hard.

And my new truck, about to lose that. But thank God I still have that. But like I said, I still got my head up. Everybody keep their head up. And keep going. That's all I can do. I got six kids, so I got to. I want to be there for them.

STARR: Yes, I know. You told us that you do have six children you're supporting. No health insurance. And when you get -- finally get inside the stadium here, who do -- what kind of employers do you want to talk to? What kind of job are you looking for?

BROWN: Well, I'm still in air conditioning/refrigeration, so heating and stuff like that. I'm trying to stay in that. And like I said, if I go in here and they can't help me, man, I'm working on another site, man. I'm trying to see what else is going on. But mostly that, and hopefully, one day I can run my own business. But until then, I hope they can help.

STARR: Well, we saved you your spot in line. We don't want you getting out of line, so we're going to let you go back now and thank you.

And you know, Kyra, that's really the story that we're continuing to hear out here, people trying to make ends meet.

A lot of folks here saying they are doing without any health insurance right now. One woman we talked to is a colon cancer survivor. She is supposed to be going to the doctor for her regular checkups. She told us she hasn't been. She's had to give them up. She has no job; she has no insurance. She doesn't know when she's getting back to the doctor -- Kyra.

PHILLIPS: That's pretty unbelievable, the stories that we hear. And these job fairs, Barbara, are happening all across the country, many of them staying open later so everybody gets a chance to come through there. What's your sense? Will the doors stay open so everybody that's lining up will get a chance to come in and have a shot at something?

STARR: Well, I don't know the answer just yet, but I think it's really possible, because again, as you look behind us over this way, this job fair is supposed to wrap up in just under two hours. But there are hundreds of people here and they are still streaming in to the parking lot here at FedEx Field. The line stretches out of sight, around the corner at this football stadium.

And as you say, we have seen this every week now in cities across the country, at stadiums and community centers. People just looking for a decent job and a way to get by.

PHILLIPS: We'll keep tracking all those job fairs, as well. Barbara Starr, thank you so much. You can always go to CNN.com/jobfairs, as well, to find out where other fairs are taking place across the country.

Well, President Obama says that his budget will spark the transformation that America needs to stay competitive, and he calls it an economic blueprint for the future. Mr. Obama met this morning with the chairman of the House and Senate budget committees to talk about the $3.5 trillion plan. And the president had this to say to members of Congress who don't agree with it.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: If certain aspects of this budget people don't think work, provide us some ideas in terms of what you'd do. "Just say no" is the right advice to give your teenagers about drugs. It is not an acceptable response to whatever economic policy is proposed by the other party. (END VIDEO CLIP)

PHILLIPS: Mr. Obama says that the country cannot go back to a bubble economy based on reckless spending.

And the daily White House briefing gets under way in our next hour. The president's budget plans are likely to draw a lot of questions. We'll definitely listen in when that starts.

Outraged. That's what a lot of you are feeling after hearing that AIG handed out huge bonuses to top executives after getting more than $170 billion in federal bailout money. In all, those bonuses totaled $155 million, and President Obama calls it outrageous.

One Republican senator had a pretty interesting remedy, though.

(BEGIN VIDEO CLIP)

SEN. CHARLES GRASSLEY (R), IOWA: I would suggest the first thing that would make me feel a little bit better towards them, if they'd follow the Japanese example and come before the American people and take that deep bow, and say "I'm sorry," and then either do one of two things: resign or go commit suicide.

(END VIDEO CLIP)

PHILLIPS: Whoa.

The president and members of Congress are trying to figure out how to recoup the money. AIG reported this month that it lost more than $61 billion in the fourth quarter of last year. That's the biggest corporate loss in U.S. history.

Stimulus, stimulus, stimulus. Enough already. Where is the dough and how do you even get your hands on it? We've got some answers for you.

(COMMERCIAL BREAK)

PHILLIPS: Well, you're a city manager, or a shovel-ready mayor of a small town, or a home builder, and you've got two burning questions: where's the stimulus money, and how do I get it? Our Jim Acosta has the answers you need.

(BEGIN VIDEOTAPE)

JIM ACOSTA, CNN CORRESPONDENT (voice-over): What you're looking at is a stimulus feeding frenzy: a standing-room-only crowd of mayors, county executives and business leaders from across Maryland, all jammed into this packed meeting at the state capitol, all vying for a piece of the stimulus action.

MAYOR JIM EBERHART, PERRYVILLE, MARYLAND: Believe me, the economic issues have come to small-town America.

ACOSTA: Take Jim Eberhart, mayor of Perryville, Maryland, population 5,000. His town has sewer projects ready to go, or as they say in stimulus speak, shovel-ready. Eberhart just needs the money.

(on camera): When you say "shovel-ready," you mean shovel-ready?

EBERHART: I mean shovel-ready. I mean we have plans and specifications. We are ready to award a contract, and we're ready to put people to work.

ACOSTA (voice-over): It's Maryland response to the question, "Where do I get my stimulus?" Come to a workshop, state officials say, and they'll tell you.

IZZY PATOKA, MARYLAND STIMULUS WORKSHOP LEADER: What we hear a lot is people that have never needed help from the government ever in their lives, today in this economy now need help.

ACOSTA: Maryland's Democratic governor, Martin O'Malley, started the workshops to answer Republican critics who call the stimulus wasteful, arguing that businesses create jobs, not bureaucrats.

GOV. MARTIN O'MALLEY (D), MARYLAND: I think it's sour grapes from the same bunch that rallied around George Bush while he wrecked our economy. And I think the best response to that is openness, transparency, performance measurement and a government that works.

ACOSTA: But there's a catch. Maryland has to spend its $4 billion in stimulus money right away. Not everyone can move that fast.

SCOTT ROBUCK, CFO, STAVROU COMMUNITIES: Unfortunately, none of our projects are shovel-ready. You have to start construction within a year. So once you get architects and engineers and everyone in line by end of the year is going to be tough.

ACOSTA: O'Malley hopes this process will convince a bailout- weary public to give the stimulus a chance. And, he says, the country may just need another one.

(on camera) There's some talk in Washington of perhaps a second stimulus. Do you think something like that would be a good idea?

O'MALLEY: I think that a second stimulus is needed.

ACOSTA: While talk of a second stimulus has stalled in Washington, states like Maryland are seeing their tax revenues falling fast. Without a stimulus part two, Americans may to have to get used to more painful budget cuts at the state level.

Jim Acosta, CNN, Washington.

(END VIDEOTAPE)

PHILLIPS: All right. Well, we're going to show you a state by state map now where you can actually see where the stimulus money is going in your state. You can also give your own ideas on how that money should be spent. You can find the map at Recovery.gov. And what we wanted to do is start out by showing you -- here's when you click on the Web site. And you scroll down. You will get the map of all the states.

And we picked two states to show you. First we go over to Missouri. Look at this: already 3,007 ideas have already been submitted. All you have to do is hit "submit a proposal," tell them your idea, and you might get a piece of the pie with regard to that stimulus money.

All right. Another state that we decided to pick, remember Ohio? That's where we saw those really long lines when DHL went down in that area? You remember this. I mean, we talked about this for days. Hundreds and hundreds of people lining up to get free food because it caused such an economic crunch once that company went down.

So we decided to pick Ohio as one. Look at this: already when you go to proposals for that stimulus money, almost 22,000 people have submitted proposals to get their hands on the money.

Now, if you go also, if you bring it over just a little bit, you're an individual seeking benefits for you and your family, here's what you do. Click right on "individuals," boom. Has all the questions here. How will food assistance be affected? How will Social Security and supplemental security income be affected? How -- very common one, how will COBRA health insurance be affected? All the answers to your questions right there. Recovery.gov.

All right. Tough times mean a lot of tough choices, as well. We know that you have questions about health insurance and your health care. And our medical correspondent, Elizabeth Cohen, is pretty busy right now, taking a look at all your e-mails. She's going to join me in just a sec and answer them for us.

(COMMERCIAL BREAK)

PHILLIPS: Well, the end of an era in Seattle. A mainstay for 146 years, the "Post-Intelligencer" produced its final print edition today. It was older than Washington state itself.

Here's the cover of the commemorative issue. And as we told you yesterday, The "P-I" will now be available only on the Internet. The move came after the Hearst Corporation said it couldn't find a buyer.

(COMMERCIAL BREAK)

PHILLIPS: We're following your stimulus dollars and found a program that should make you feel pretty good about your investment. It helps low-income young people help themselves while they help others. And that extra shot of federal money might help it lose its nickname, Harvard of the Hood. Here's Elaine Quijano.

(BEGIN VIDEOTAPE)

ELAINE QUIJANO, CNN CORRESPONDENT (voice-over): Four years ago Sidney Jemison (ph) didn't care much for classrooms. UNIDENTIFIED FEMALE: I really didn't care about anything. I didn't really take life seriously.

QUIJANO: She got pregnant and dropped out. Lillian Rosales (ph) dropped out, too, working at a Washington check cashing store with her baby in a stroller beside her.

UNIDENTIFIED FEMALE: I was living from paycheck to paycheck. So yes, I have to make a change in that.

QUIJANO: Both women knew they had to do better. They joined YouthBuild.

UNIDENTIFIED FEMALE: I found out how serious life was when they started talking to me.

QUIJANO: YouthBuild gives low-income young people the chance to both works towards their GED or high-school diploma and learn construction skills, building energy-efficient homes for low-income families.

Founder Dorothy Stoneman says young people written off can be an asset to society.

DOROTHY STONEMAN, FOUNDER, YOUTHBUILD: They tell me, "If it weren't for YouthBuild, I would probably be dead or in jail."

QUIJANO: Across the country, YouthBuild has been forced to turn away countless applicants.

STONEMAN: Here in D.C. they decided to call it the Harvard of the Hood, because it was so hard to get in. Now that's a silly situation.

QUIJANO: President Obama included $50 million for YouthBuild in the economic stimulus package. Good news for Sidney Jemison (ph).

UNIDENTIFIED FEMALE: I feel more confident in myself now. I feel like helping people is really helping myself.

QUIJANO: And the lesson Lillian Rosales (ph) says she'll teach her son: even if you give up once, you still have a second chance.

UNIDENTIFIED FEMALE: The opportunity for you to rebuild yourself.

(END VIDEOTAPE)

PHILLIPS: Well, Elaine's with us now from Washington.

You know, some YouthBuilders are doing their thing on the Mall. And first lady Michelle Obama visited the site today. So what are they going to do with the White House -- or with the house that they built, Elaine?

QUIJANO: Well, you know what? Let me show you, Kyra. Let's take a little walk here.

Michelle Obama was here, first of all, you're right. She looked at some of these projects taking place, and she basically had a message for these young people which was, "Look, I know you've been overlooked in the past, but understand that there are programs like YouthBuild that will allow you to rebuild your lives and help others in the process."

I want you to take a look. It seems as though things have sort of stopped for the moment, but they were putting up drywall here. This house, when it is completed, is going to be a three-bedroom home, Kyra.

It will be for a single mother near Brownsville, Texas, a mother of three. She works nearly 60 hours a week. She's got a day job, and then she works 20 hours a week at night, basically trying to make ends meet. But she wants a place where she and her three daughters can feel proud of. Their own home was actually very badly damaged by Hurricane Dolly.

So this, when it's all said and done, Kyra, three bedrooms. It will have a kitchen, a living room, a dining room. Really will be an opportunity for that family in Brownsville, Texas, to have a new start, as well.

In addition to all of the young people here getting not only their GEDs, their high-school diplomas, but also some very valuable job skills, green job skills that eventually they can take with them out in the larger world -- Kyra.

PHILLIPS: All right. Next time we see you, you're going to grab a hardhat and some tools and help with the building process there, Elaine. Right?

QUIJANO: Sure. Fine, yes.

PHILLIPS: Elaine Quijano, great, great story. Appreciate it.

Well, where do you go when you're one -- well, when you've missed a payment or you're one missed payment away from a foreclosure? Well, a Virginia family turns to Gerri Willis in the "CNN Survival Guide." We're going to bring them together.

(COMMERCIAL BREAK)

PHILLIPS: All right. Breaking news. Christine Romans joining us now. Apparently bonuses, AIG, the drama continues.

Christine, what have you found out?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, we're still working our sources and trying to get more information for you. What we have here now is a letter sent to chairman Barney Frank of the House Committee on Financial Services from the attorney general of New York. And it gives us a little more breakdown of those bonuses at the center of this AIG controversy. What we know now is that, of the $160 million paid out on Friday to AIG workers as retention bonuses, the top recipient received more than $6.4 million, Kyra. The top seven bonus recipients received more than $4 million each. The top ten recipients received a combined $42 million.

There were 73 people in that unit. Remember, this is a unit responsible for essentially almost the destruction of this entire company. Seventy-three people received bonuses of $1 million or more.

And these were retention bonuses. The attorney general Andrew Cuomo noting in his letter that 11 of the people who received these retention bonuses of $1 million or more were not working for AIG any longer, including one who received $4.6 million. So he's questioning what kind of retention bonuses they really are if they're not retaining this talent.

A sharply worded letter, frankly, saying they've been for some time investigating the bonus situation. They are very concerned. He's very concerned that all these payments were made to individuals in a subsidiary that was responsible for, frankly, such a calamity for the overall company, AIG, and also for the economy as a whole.

As you know, tomorrow the CEO of AIG, Ed Liddy, will be on Capitol Hill. He'll be answering questions. Keep in mind, he is somebody who's been appointed by the United States government to try to stabilize this company so they can try to find the options to stabilize it, to -- in an orderly manner try to figure out what to do next and in terms of unwinding some of its businesses or finding buyers for parts of its businesses.

But again, we are learning more about these bonuses, just how much money we're talking about and where that money went to.

In this letter, by the way, Andrew Cuomo noting that these bonuses could not have been paid out if it weren't for the largess of the American taxpayer. If the taxpayer hadn't bailed out this company, these bonuses could never have been paid in the first place.

So, he's questioning the legal opinion, he says, that AIG obtained that said that legally they were obligated to pay these bonuses. So, this outrage continues -- this controversy, rather, over the AIG outrage, as they're calling it, continues. We still don't know the names, of course, of who these people are. Just learning a little more details about what -- the size of those bonuses -- Kyra.

PHILLIPS: All right, we'll of course continue to follow this throughout the afternoon, into the evening. And tomorrow we'll be talking a lot about it as well as it unfolds. Christine Romans, thanks so much.

ROMANS: Sure.

PHILLIPS: Take a quick break. More from the CNN NEWSROOM straight ahead.

(COMMERCIAL BREAK)

PHILLIPS: Well, a lot of folks are hoping that we're through the worst of the housing crisis. Christine Romans checks if the numbers really bear that out.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): A huge bubble popped. The housing market crashed. How bad is it?

TIMOTHY GEITHNER, TREASURY SECRETARY: Millions have lost or are at risk of losing their homes.

ROMANS: Seventy-four thousand homes repossessed by the bank last month alone. Eleven percent of homeowners are behind in their payments. The vast majority of you are paying your mortgage on time. But the value of your house is likely plunging.

ROBERT SHILLER, YALE UNIVERSITY: We've been going down now for almost three years.

ROMANS: According to Case-Shiller data, in some cities, home prices are down 40 percent. Millions of Americans owe more on their house than the home is even worth. How bad will it get? Let's look to the charts.

A home that was worth $100,000, inflation adjusted, in 1890 tumbled in the Great Depression to just $73,000. The equivalent home during the 1982 recession cost $107,000. Even after the housing crash today, that very house is valued at $137,000. Even though prices are down, they're still well above the housing booms of the 1970s and 1980s. It means we may have a way to go to bottom out. When will it turn around? Is good news finally on the horizon?

SHILLER: I'm not predicting it, but I'm saying it would be entirely win the realm of possibility that later this year we would see an improvement of that sort in the housing market.

(END VIDEOTAPE)

PHILLIPS: Christine Romans reporting on that.

Now, Nicole and Chris Botkin wanted their piece of the American dream. A home to raise kids in, a home to grow old in, a home to have holiday dinners with grandkids in. But the Botkins were backed into a corner from the beginning, and now they're up against the wall.

Nicole Botkin joins me from Richmond, Virginia, and from New York, we're also joined by Gerri Willis. Nicole, your story actually starts at the closing table in 2007. Tell me what happened.

NICOLE BOTKIN, "ONE PAYMENT AWAY FROM FORECLOSURE": Yes. When we went to the closing table, the terms were different than what the broker had originally told us they were going to be.

PHILLIPS: So what did they tell you prior to arriving at the bank, and then how did the story change?

BOTKIN: Prior to arriving at the bank, the terms we were expecting were 100 percent financing through a conventional loan not to exceed 8 percent. And after they had closed on the sale of our previous home, they postponed closing on the sale -- or on the purchase of the home we were buying. When we went to closing, they said that they could only finance us for 90 percent and that our interest rate would be 11.6 percent.

PHILLIPS: Oh, my gosh! So the interest rate went up 3 percent, and then you were expected to put down a huge chunk of money, what, $10,000?

BOTKIN: I think closer to $30,000.

PHILLIPS: Closer to $30,000. OK.

BOTKIN: All of the proceeds from the sale of our previous home.

PHILLIPS: OK, so when you got there and the whole story had changed, why did you still sign the paperwork?

BOTKIN: I was nine months pregnant, a high-risk pregnancy. We had two boys already, two dogs, my husband. We had no place to live. And we thought to ourselves, well, you know what? If we can just get in the house, then we can refinance and figure this out later.

PHILLIPS: OK. So Gerri, I want to bring you in on this. Is this common procedure in these tough times right now, that they tell you they're going to do one thing for you, and then you show up and they all of a sudden change their minds? Is it because you have to sign something before you even get there? I mean, how do you prevent this type of situation?

WILLIS: This is crazy, you know, and I've heard this more than once, that at the very last minute the mortgage lender says, no, no, no, I can't give you this loan. I have to give you another loan where the terms are not so advantageous.

I think the important thing to think about here for Nicole is, did you get a goodwill estimate of closing costs? Did they give you a form that had all the numbers laid out with the preferential terms, the first terms that you had. In other words, did they promise in writing to give you one thing and then gave you something else?

BOTKIN: The writing that we had wasn't in the form of a good- faith estimate, and being uneducated on the entire process at the time, considering the first time we bought a house, everything went smoothly. So, it was misplaced trust and lack of education in the process.

WILLIS: So you didn't get that estimate. There was no estimate.

BOTKIN: There was a good-faith estimate but the one that they had provided us was to a different house, and so they never reissued on the house that we actually purchased. WILLIS: All right, well, you should have gotten one on the loan that you were getting. I mean, plain and simple. I think it would be worth while to know if the law -- because there is a lot of law involved here when loans are given out. They have to hit certain standards.

And it may be that all the terms were not disclosed. It may be that some of the terms were changed. It might be worth looking at as you try to get your lender here to make some changes to your loan. You know, the president has a program that could probably help you, Nicole, especially since, as I understand it, you are behind on payments at this point. It might be possible that you could actually get some assistance in paying that loan, reducing your monthly net so that maybe you could afford it.

PHILLIPS: How does she go about doing that, Gerri?

WILLIS: She's got to talk to her lender. And her lender is one of the country's biggest subprime mortgage lenders. So, this could be a difficult conversation. And I assume you've already called them and said, you know, boy, I sure would like a different loan. I'd like better terms. Have you done that?

BOTKIN: I actually called them and I have gone through one modification, which decreased my interest rate 2 percent. But at the same time, because they did not escrow for property taxes in the original closing, they had to begin that. And so, the actual payment changed by only $22. And I...

COLLINS: Well, I just want to make a point real quickly if you don't mind, just so we have it on record, is, a spokesperson for home loan services in Merrill Lynch. We did call about this, Nicole and Gerri, and the comment that we got was, "Due to our privacy laws, we are prevented from commenting on or disclosing information about our clients."

So, it looks like Nicole definitely has gone back, like you are suggesting, so how can we follow up with her? What could be the next move for us and for her?

WILLIS: Well, I think you need to go up the chain. You have to ask for the loan modification department. You can't settle for the first person who picks up the phone. You have to tell them immediately that your situation has changed. My understanding is that your husband's job isn't bringing in as much as it used to. Your family income is down from where it was.

You need to get them to understand what your situation is, so then they feel invested in giving you some kind of loan modification. But as I said, this isn't going to be an easy conversation because this is a company that has had troubles in the past. It's taken some reductions in staffing. You know, the whole industry is really reeling from what's gone on with real estate across the country. But that's really where I would start.

PHILLIPS: All right. We will follow up on the home loan services in Merrill Lynch to see what exactly happens. Nicole, we'll check back in with you. Gerri, thanks.

And we still want to know what you want to know, whether you're buying, selling, saving, staying or moving. Send us your questions about housing. Our address is CNNnewsroom@CNN.com. Gerri Willis will have some answers in the next hour.

And he's a man with plan, and he's got President Obama's ear. Larry Summers, is head of the National Economic Council and adviser to the president. Summers sat down a short time ago with CNN's Ed Henry. Ed joins us now from the White House. So, Ed, what did he say about housing?

ED HENRY, SENIOR WHITE HOUSE CORRESPONDENT: Well, Kyra, it's interesting. I started with housing because as you mentioned, some good news, if you will, that housing starts are up 22 percent right now. Obviously, new home construction up. That's a good sign.

But Larry Summers was very careful. Even as he was saying there are signs like that -- there were signs from the stock market as well -- that maybe things are picking up a little, he was very cautious to try to ratchet down expectations. This White House keenly aware of the fact that they don't want people to get too optimistic just yet.

Just even as they try to get their message more optimistic, more about how maybe there will be a recovery down the road, they're trying to be very careful. Take a listen to how he put it in my interview.

(BEGIN VIDEO CLIP)

LAWRENCE SUMMERS, CHAIRMAN, NATIONAL ECONOMIC COUNCIL: We said that it was encouraging because it hadn't taken place for very long, but we were very quick to emphasize that there are many different statistics coming in, that these numbers month to month bounce up and down, and something that the president has made clear to us is his approach and the approach he wants us to take, is a recognition that we don't panic when there's a bad number or bad day on the markets. And we don't become euphoric when there's a good day in the markets or a good number.

(END VIDEO CLIP)

HENRY: So you can see they're trying to stay on an even keel. And I pressed Lawrence Summers on whether or not he agreed with the Fed chairman, Ben Bernanke, who said over the weekend that he believes this recession could end by the end of 2009, and that 2010 could be a year of recovery. Larry Summers would not go there and would not be as optimistic, as bullish, if you will, as Ben Bernanke. And I think that's significant that this White House is being very cautious about not lifting expectations very high -- Kyra.

PHILLIPS: Now, Larry Summers also commented about AIG.

HENRY: That's right. I pressed him, numerous questions about why the White House did not act sooner to try and block these bonuses. We heard the president speak out on it yesterday and say they're now looking for every legal avenue. But why didn't they do something when they had leverage a couple weeks ago when AIG was looking for another $30 billion in taxpayer money? I got an answer to that from Larry Summers. I'll tell about that in a few moments at the top of the hour. But also, more importantly, I asked Larry Summers, would you recommend to the president that AIG get more bailout funds if they ask for more money? And he gave a pretty surprising answer. I'll have that in a few minutes -- Kyra.

PHILLIPS: Sounds good, Ed. We'll take it.

Well, does the ailing economy have you ignoring your aches and pains? Our senior medical correspondent, Elizabeth Cohen is reading your e-mails and will be answering your health care and insurance questions in just a little bit.

(COMMERCIAL BREAK)

PHILLIPS: All right, in this rough economy with so many of you one medical emergency away from bankruptcy, there is a lot of fear out there. And people with and without health insurance are worried about taking care of themselves. Senior medical correspondent Elizabeth Cohen has been reading a number of your e-mails back there.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Yes, many of them.

PHILLIPS: Usually you're moving around all throughout the afternoon. You were...

COHEN: I was just sitting there, right, exactly.

PHILLIPS: Yes, you were. All right, so is there just a variety of concerns you're getting, questions?

COHEN: Oh, right. Absolutely. I mean, people who've just been laid off are worried about how they're going to pay for their doctors. People even who have insurance are worried about how they're going to pay for their medical care because insurance doesn't always cover everything. So, Kyra, we've been getting a variety of questions about what to do in these situations.

PHILLIPS: All right, we picked a couple of them, if you don't mind. Let's go to this one from Donna: "I'm curious how the pre- existing condition clause in most health insurance policies impacts people with chronic illness, and how can someone possibly get coverage for those illnesses when they are in that situation?"

COHEN: This is a huge problem. If you really want to be frustrated, pretend you have a pre-existing condition, go online and try to buy health insurance. It is really, really hard to do. Insurers simply don't want to insure you if you're already sick because it is going to end up costing them a lot of money.

So, two thoughts for what Donna can do. One, Google "state high- risk pool." You can see if your state participates in a high-risk pool. Here you see a number of them that do. These are pools that are designed for people just like you, Donna, who have pre-existing conditions and generally speaking are a higher risk for insurance companies.

Here is a second thought. Go to your county, go to your city and see if they have a specific program for people who need charity care. You will be surprised at some of the resources that are out there. They're not always easy to find, but the best thing to do is to start with your city, start with your county and see what resources they know about.

PHILLIPS: All right. And Daliah has this for us: "If we do get to the point where all Americans have health insurance, will there be enough doctors to see these patients, or will there be a six-month waiting list?" That's a good question.

COHEN: It is a good question. Forty-six million uninsured Americans. We would presume that they don't spend a whole lot of time in the doctor's office because they don't have the money to pay for that. But where they do spend time, of course, is the emergency room. So, maybe what's going to happen is that all these folks who are crowding emergency rooms now because they don't have insurance, they'll go to private doctors, and they'll sort of see a shift in resources.

But Daliah, I totally understand this concern. There is a shortage of primary-care physicians. There is a concern that by the year 2025, if things don't change, we're going to be missing, so to speak, 40,000 primary-care doctors. That's how much of a shortage there's going to be. But maybe with health care reform, there will be sort of a realignment.

PHILLIPS: All right. We'll follow it.

COHEN: That's right.

PHILLIPS: We'll follow all the e-mails, too. Thanks, Elizabeth.

COHEN: OK, thanks.

PHILLIPS: One man's "ROAD TO RESCUE" started with a pretty hot idea in the oven of his own bakery. He combined his skill at making tortillas and knowledge of the economy's impact on his restaurant, added a dash of common sense, and, well, cooked up a pretty big success story.

Our Ted Rowlands is in Burbank, California with more on this businessman who diversified to survive. Sounds pretty good, Ted. I wish I were joining you for lunch.

TED ROWLANDS, CNN CORRESPONDENT: Yes. We just ate, actually. It was fantastic. Basically, the president yesterday said small businesses are going to be key in the economic recovery. Well, this is a great example of a small businessman changing everything.

His business, his restaurant, his convenience store, bakery down 50 percent, had to lay off some workers. He decides to move forward with an idea he's had for about a year, a new type of tortilla. It's called the nopatilla (ph). He started selling it in December, and lo and behold, it's flying off the shelves. And now, he's making money.

Alonzo Arellano (ph), this is helping to support your other business. Bottom line, you're keeping people employed because of the tortilla.

ALONZO ARELLANO (ph), BUSINESS OWNER: That's correct. Not only have I been able to maintain the employees here at the tortilla factory, but we're actually adding more employees because of the demand of the cactus tortilla that it's having.

ROWLANDS: What we're talking about is a cactus tortilla that's good for you. It's got some fiber in there, and low fat, and people are really taking it. Your claim is that if small businessman like yourself just had an ounce of the money that the AIG folks and the bank folks have been getting from the federal government, we'd be out of this mess. What do you mean?

ARELLANO (ph): That's correct. I mean, if I had a fraction of that money, I would go on and revamp tortilla factories throughout the United States. That's creating more jobs and stimulating our economy. Not only that, but I can also improve health care, because...

ROWLANDS: They're good for you.

ARELLANO (ph): Well, a key for health care is that prevention. And prevention starts in our own kitchen.

ROWLANDS: Alonzo (ph) is going to be expanding. He's going to be looking for a small-business loan. Hopefully, the money will be there to get it. President Obama says it will be there for small businesses like this one that do have the ability to create jobs now.

PHILLIPS: We're flying Alonzo (ph) in to make some fish tacos, Ted. You're from California. You know how good those are. OK, thanks.

ROWLANDS: Absolutely.

PHILLIPS: Well, a hotline to help Michigan smokers quit just quit itself. We're going to tell you what snuffed out that popular program.

(COMMERCIAL BREAK)

PHILLIPS: Well, money is tight pretty much everywhere. Smokers looking to quit an expensive habit have flooded Michigan's help line with calls, 65,000 in less than a week. Now the help line's run out of free nicotine patches and gum to hand out. They've also run out of money. So they're quitting, cold turkey, through October 1st, when the new budget year begins.

And he's got a law degree and 25 years of experience in defending the little guy. So, why is he selling sofas? (COMMERCIAL BREAK)

PHILLIPS: How many of you are laying your own path to "THE ROAD TO RESCUE"? And for some, it starts with baby steps. Our Jason Carroll has a case in point: a laid-off lawyer who loves the law but is now selling sofas.

(BEGIN VIDEOTAPE)

CARROLL (voice-over): For years, Paul Semenza practiced law as a defense attorney for a small firm near Boston, often having to work at home after hours but he still loved his job. Then a year ago, everything changed.

PAUL SEMENZA, ATTORNEY TURNED SALESMAN: I was laid off, and I couldn't find a position with a law firm or any type of company, even with my litigation background.

CARROLL: Semenza thought his 25 years of experience would quickly bring him another offer.

SEMENZA: Probably about eight, nine months into not being able to get back into a law firm or a company doing litigation work, I decided I can use my skills in other areas.

You're not stuck in the package.

CARROLL: Semenza finally found work as a salesman at this Bob's Discount Furniture outside Boston.

(on camera): Was there any sort of concern as you were looking and even coming and applying here that, wow, I hope I get this gig?

SEMENZA: Absolutely, absolutely. I thought they would tell me I was overqualified.

CARROLL (voice-over): National statistics show educated and experienced workers like Semenza are not sheltered from the economic downturn. The number of professional and business services jobs fell by 180,000 in February. Some research shows white-collar workers make up more than 43 percent of long-term unemployed -- that is, workers out of work for six months or more. Recruiting firms say placing even qualified attorneys is tough these days.

CAREY BERTOLET, BCG ATTORNEY SEARCH: Those are law school graduates from 2007, 2008 who have been laid off, and I've seen very senior attorneys who were laid off as well.

CARROLL: But here at Bob's Discount Furniture, they're not laying off. They're hiring. Sales are up. Part of the reason, they say, the bad economy has produced a better crop of qualified sales people.

BOB KAUFMAN, BOB'S DISCOUNT FURNITURE: We don't typically get lawyers with 25 years' experience, but we certainly see a different caliber of people. CARROLL (on camera): What sort of adjustment has it been?

SEMENZA: I still wear a tie. I still wear a jacket. I'm not digging ditches somewhere, but it's an adjustment psychologically. It's been different. It's been different.

CARROLL (on camera): I also asked Semenza about his future. He's just going to take it one day at a time, but he told me someday he hopes he can go back to doing what he really loves, which is practicing law.

Jason Carroll, CNN, New York.

(END VIDEOTAPE)