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Reducing Your Taxes; Tiger Woods Announces 'Indefinite' Hiatus from Gold; Personal Finance Experts Give Advice; Boxing is Good Exercise; Illegal Debt Collection Agencies; Will Texas City Elect Lesbian Mayor?
Aired December 12, 2009 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Houston voters go to the polls. Will the Texas City get to elect a lesbian as mayor?
And is there anything you should be doing right now to reduce the taxes you have to pay in April? We'll ask the Dolans.
You're in the CNN NEWSROOM, where the news unfolds live this Saturday, December 12th. I'm Fredricka Whitfield. Hello, everyone.
Our top story right now, the latest domino to fall in the ongoing sex scandal hounding Tiger Woods. He is now admitting to marital infidelity and is stepping away from golf to address his personal issues.
The controversy is also taking its toll on his professional life. Case in point, razor maker Gillette announced today it is scaling back advertisements with the million dollar pitchman.
So how did Tiger get to this point? Our Susan Candiotti looks back over the past two weeks.
(BEGIN VIDEOTAPE)
SUSAN CANDIOTTI, CNN CORRESPONDENT: What a two weeks it's been for Tiger Woods. It all began Thanksgiving night with a minor accident. A few days later he issued a statement on his Web site, saying he would "never let it happen again."
A few days later he talks about "transgressions" as allegations avenue fairs swirl around him. And finally Friday night, another statement in which he admits he was not faithful to his wife.
The statement reads in part, "I am deeply aware of the disappointment and hurt that my infidelity has caused to so many people, most of all my wife and children. I want to say again to everyone that I am profoundly sorry that that I ask forgiveness."
And he adds "After much soul-searching, I've decided to take an indefinite break from professional golf. I need to focus my attention on being a better husband, father, and person."
CHRISTINE BRENNAN, "USA TODAY": I think this shows the magnitude of the problem. I think it shows that Tiger and his team is starting to get how big a deal this is. The fact that he used the word "infidelity" for the first time instead of "transgressions," there's another step.
And I think it show as little window into the world in Orlando, Tiger Woods' world, the bunker he's in right now, how bad things are, how they seem to be getting it.
CANDIOTTI: The PGA has also issued a statement. It says "We fully support Tiger's decision to step away from competitive golf to focus on his family."
And on his Web site fans also weighed in, about 50/50, some in favor, some not. One says, quote, "I know the road to recovery takes time. Good choice on your part about hiatus." But another one said, "Maybe you learned your lesson, but at what cost?"
Crisis experts say it may be time for Tiger to play the inside game.
HOWARD BRAGMAN, CELEBRITY PUBLICIST: You have to get a really thick skin for the next couple of months and say "I'm not going to read a newspaper, I'm not going to turn on the TV, and I'm going to do the business at hand. I'm going to walk the talk, make breakfast, change the diapers, and be the best husband there ever was for a little while."
CANDIOTTI: Will Tiger's absence on the greens make a difference? Experts say count on it. At some point they say he may have to face an interviewer before he once again faces the public at a golf tournament.
Susan Candiotti, CNN, New York.
(END VIDEOTAPE)
WHITFIELD: Meantime, the PGA is standing behind Tiger's self- imposed sabbatical. Its statement reads, "We fully support Tiger's decision to step away from competitive golf to focus on his family. His priorities are where they need to be, and we will continue to respect and honor his family's request for privacy."
We look forward to tiger's return to the PGA tour when he determines the time is right for him." That from the PGA.
Meantime, sports journalist Stephen A. Smith says Tiger Woods is a hypocrite. He made that remark during an appearance last night on CNN's "LARRY KING".
(BEGIN VIDEO CLIP)
STEPHEN A. SMITH, SPORTS JOURNALIST: He wanted to us believe about him what he wanted to us believe about him. And the reason I feel so passionate about that -- I'm not trying to condemn him for his actions, or whatever. To me that's his personal business. He should have told the world to mind their business. That's the problem that I have with him.
But when talk about his image in terms of him being in control and now losing control, this is a man that went about the business of trying to manipulate opinions about him. I recently saw a commercial where he was talking about being a father to two daughters as well as a husband.
If you know you are doing what you are doing, why are you allowing that type of advertisement to be put out there about you? It's one thing to be seen drinking Gatorade or wearing a Nike outfit with gloves and a golf club or whatever the case may be.
But when you are advertising yourself as a family man where you clearly know that that is not how you are behaving, that is the epitome of hypocrisy, and it's one of the few things in the world that Americans simply cannot forgive.
(END VIDEO CLIP)
WHITFIELD: So one of Woods corporate sponsors is back peddling on their pitchman. Our sports business analyst Rick Horrow has more live from beautiful West Palm Beach, Florida. It's good to see you.
All right, Rick, I'm talking about Gillette saying we are going to phase out some of the advertisement that has Tiger Woods' name or image or likeness, et cetera.
Do you agree with Stephen A. Smith, who talks about we are talking about hypocrisy here, that his image said one thing all this time and now his image says another. And that is what some of these endorsements are all about.
RICK HORROW, CNN SPORTS BUSINESS ANALYST: Perfect storm, Fred. It is the most recognizable guy maybe in the history of the world coming up against the Internet age where accurate or inaccurate information is transmitted in milliseconds. And so the image that he likes to portray can be broken down in a matter of weeks.
EA Sports out there weighing in. They are kind of lukewarm right now. AT&T, not the best positive statement out there. Gillette, hiatus, but maybe a long-term hiatus. Nike, 800 million reasons why they want to stick with him. That's the revenue every year that Nike golf is creating, and it's because of tiger. So a lot of different issues here.
WHITFIELD: Yes, and that's the revenue created because of his popularity. But when something like this is to happen, and it's difficult to know at this juncture what this has done to his popularity, but as soon as some of these big companies see, I guess, a good number of people have dropped off, you know, saying, yes, we love you Tiger Woods, they're only seeing dollar signs, aren't they?
HORROW: Yes. Kellogg's cut Michael Phelps pretty quickly, McDonald's cut Kobe Bryant. We're not seeing the same thing. Obviously Hertz cut O.J. Simpson not saying it's the same thing -- $12 billion of corporate spokesman dollars are coming from corporate America to spokespeople. The deals are shorter, they're smaller, and they're easier to terminate.
If I'm Tiger, I take his boat privacy, I head out to the Atlantic, and I wait for further instructions.
WHITFIELD: What?
(LAUGHTER)
Wait a minute. What we are talking about, he wants to be private. Forget that stuff. You're a very huge public figure. There is no privacy, really. I think most people have to understand that.
And if he doesn't, why is he not surrounded by people who say you're a huge public figure, the biggest one in the world. There is very little privacy that comes with that.
HORROW: Of course I'm exaggerating about the boat. But the bottom line is the privacy comes at what cost? Well, if you get $93 million annually from your corporate endorsements, then your expectation of privacy is reduced accordingly.
WHITFIELD: Right. And a lot of that money is coming because he has been on winning streaks. When people see him play, that's when people start spending money, buying those products that he's endorsing.
But now if he is saying, I'm going to be away from the game indefinitely, talk to me about what these corporate sponsors are thinking, how they might be adding up his absence?
HORROW: Depends on how you spell "hiatus." If you spell it with a small "h," a couple of months, three months. Remember, when he was away from knee surgery last year, 50 percent decrease in ratings. But he came back, all is forgotten. If the hiatus is a capital "H," a year, couple years, then we've got some major issues.
WHITFIELD: Interesting stuff. Rick Horrow, thanks so much, appreciate it.
HORROW: All right, later.
WHITFIELD: Take care.
And stay with us, because later on today we'll talk to Connell Barrett, as well. There's much more to talk about as it pertains to Tiger Woods. Connell Barrett is the editor-at-large for "Golf" magazine, and he'll be telling us his view on what Tiger Woods and what's been taking place involving Tiger Woods, what that really will mean for the game of golf, for viewership of golf, all the other things at stake. That's at 4:00 eastern time right here in the "CNN NEWSROOM."
(WEATHER BREAK)
WHITFIELD: Nobody likes hearing from debt collectors. Everyone agrees on that one. They only want one thing, and they're often not nice at all.
(BEGIN VIDEO CLIP) UNIDENTIFIED MALE: When I see you, I'm going to -- you up. I want my money and I want it now.
(END VIDEO CLIP)
WHITFIELD: Oh, my gosh. Is that typical? Did harassment from collectors actually cause a Florida man's death?
And in a few minutes we'll talk more about your money and the choices that you need to be making at the end of this 2009, and perhaps some choices you need to be making early part of 2010. The Dolans are going to be with us answering your personal finance questions.
(COMMERCIAL BREAK)
WHITFIELD: So they are one of the best arguments for caller I.D., I think you'll agree. We are talking about debt collectors and methods some of them use. In fact a Florida woman is blaming them for her husband's death.
Our John Zarella has more on this story we first brought you in September.
(BEGIN VIDEOTAPE)
ZARELLA: Here is how debt collectors are supposed to treat you on the phone.
UNIDENTIFIED FEMALE: I wanted to inform you, and I am obligated to inform you this is an attempt to collect a debt.
ZARELLA: This is how they are not.
UNIDENTIFIED MALE: Mr. McLeod, get you act together and make your payments on your mortgage and stop playing these games.
ZARELLA: Dianne McLeod says the call is one of hundreds her husband got before he died of heart failure.
ZARELLA (on camera): How many phone calls a day would you get?
DIANNE MCLEOD, WIDOW: Six, seven, there might have been more.
ZARELLA (voice-over): McCloud is suing Green Tree Servicing LLC with using harassing tactics that broke Florida law and she claims led to her husband's death.
MCLEOD: The stress just built up with him. He had trouble sleeping, not eating well. The stress was getting worse and worse for him.
ZARELLA: The company's general counsel told CNN, quote, "The collection activity did not lead to his death. The claim is meritless. We deny that the content, the number, or the timing of the calls had anything to do with him dying in 2005." After a heart attack and continuing heart problems, Stanley McLeod went on disability in 2002. The McLeod's fell behind about three months on their mortgage payments. The call began. This one after explaining to the collector he had been life-flighted to the hospital.
UNIDENTIFIED MALE: Why did you have that helicopter pick you up if you're not paying us?
ZARELLA: Scare tactics charges McLeod's attorney Billy Howard.
BILL HOWARD, CONSUMER ADVOCATE: That's how these mafia-like tactics result in so much money. People are scared.
ZARELLA: Howard says this is not an isolated incident. He has hundreds of cases involving other clients. How would you feel if you got a call like this?
UNIDENTIFIED MALE: When I see you, I'm going to -- you up. I want my money and I want it now.
ZARELLA: Or this one?
UNIDENTIFIED MALE: You haven't heard the last of me. And if it takes me a year, takes me two, believe me, I will find you.
ANGELA INGLETT, PHG RECOVERY SERVICES: We want them gone. We want all of them gone.
ZARELLA: Anna England runs a debt collection agency. She says collectors breaking the law should be prosecuted.
INGLETT: Sometimes the industry is penalized for a few bad apples. And we try very hard here in our firm. We absolutely make sure we are in compliance.
ZARELLA (on camera): With the recession, the number of people in debt has gone up and so has the number of complaints against debt collection agencies.
According to the Federal Trade Commission, between January and June of this year, they received 45,000 complaints. That's up more than 20 percent over the same period last year.
ZARELLA (voice-over): But the FTC has only one case pending, referring most complaints to the states for legal actions to protect consumers.
Attorneys say if you get harassing messages, do what Stanley McLeod did, save the tapes.
John Zarrella, CNN, Tampa.
(END VIDEOTAPE)
WHITFIELD: OK, so from abusive debt collectors to year-end tax tips, we have the answers for you for all your personal finance questions.
Joining me right now, authors and personal finance experts, Ken and Daria Dolans. Thanks so much, good to see you guys.
DARIA DOLAN, PERSONAL FINANCE EXPERT: Welcome back, we missed you.
KEN DOLAN, PERSONAL FINANCE EXPERT: He, Fred.
WHITFIELD: I missed you all, too. I'm glad we're all back together again.
KEN DOLAN: How are you?
WHITFIELD: I'm doing pretty good.
Let's talk about what John Zarrella was exposing in that piece, that Florida laws may have been broken in that case. They are still investigating. Does this mean every state has its own set of laws about the limits that debt collectors can push?
KEN DOLAN: They do. It's a crummy job, by the way.
DARIA DOLAN: They do have their individual laws, but I would probably guarantee, and I'm not even a lawyer, Fred, that those who have broken every states' law in the union.
WHITFIELD: Most of us don't know what the laws are. What do I have to tolerate or what should I not tolerate if I'm on the other end of the call?
KEN DOLAN: Fred, that is a great question. And one thing we want to make clear, we are not against people -- everybody should be paying their bills. But they shouldn't have to take the baloney that John's story showed.
Number one, they can't call you before 8:00 in the morning or after 9:00 at night. Number two, they can't call you at work -- most people don't know that, unless you give them permission orally or in writing.
DARIA DOLAN: They cannot harass you. They cannot threaten you. They cannot call anybody in your family outside of your spouse. They cannot inform your boss. And if you request they only contact you by mail, they must comply.
KEN DOLAN: Here's the big deal, Fred, and here is what our viewers should know. Every person who is called by a collection agency has to get what's called by federal law a validation notice within five days of the first contract by a collection agency, which contains how much you owe, to whom you owe it, and your recourse if you say you don't owe it.
WHITFIELD: "You're going to hear from us unless you pay up" this amount. DARIA DOLAN: Because some of these calls are bogus through some sort of paperwork error or some other person with a similar name. Therefore, you need to know that it is, in fact, your debt.
KEN DOLAN: Last point, Fred. If anybody is confronted with this, the laws can be a little bit wacky from state to state. There is a very (INAUDIBLE) contract by a collection agency, if you're not (INAUDIBLE) and stop playing these games. There's a good book called "Debt Collection Answers" by Jerry Detweiller, which will tell you exactly what your right are, because there are pages and pages of rights.
WHITFIELD: All right, good.
While we are on the topic of debt collectors, which then leads to credit cards and stuff. Let's talk about how people might want to plan their 2010 to clean up their act. Maybe they want to buy a house, get a home loan, car loan, et cetera. But in order to do that you have to clean up your act. So how do you increase your credit score?
DARIA DOLAN: You're going to dump it first, aren't you?
KEN DOLAN: No. I'm just going to say...
WHITFIELD: I let you guys decide.
KEN DOLAN: I usually lounge.
The first thing is don't abuse credit these last two or three months of the year because you'll be paying it this time next year as a start.
DARIA DOLAN: Exactly. Actually, now the last few weeks of the year.
But nonetheless, what you want to do every year because you're entitled by law to one free credit report a year -- get it. Check it. See what's being said about you. Make sure that everything being said about you is correct.
WHITFIELD: Get it now while you have a few days left in the month.
KEN DOLAN: Go to annualcreditreport.com. See in fact what the people from whom you're trying to borrow money, see what they see.
WHITFIELD: Isn't that tricky, because you're entitled to a free credit report, but there are all these agencies that say send us $15 or whatever the amounts are and we'll provide you your credit report. Sometimes folks get suckered into that.
KEN DOLAN: Yes, you can. And even when you go to annualcreditreport.com, you have to be careful of all the ads. Federal law says is if you can get through all the other junk, is that you get a free credit report and ask for it. And something else, especially at the holidays, and as you start the beginning of next year, is absolutely make sure that if you've got $10,000 of credit on five cards that you use a small amount of available credit. That will kill your credit score.
WHITFIELD: Interesting.
And now, end of the year, one last thing about what you can do to perhaps save money or help you out when it comes down to tax filing time in April. How do we take advantage of the last, I don't know, 20 days?
KEN DOLAN: Still not too late, Fred.
DARIA DOLAN: Actually, generally speaking, if you're entitled to some sort of a bonus, as long as you're not a Wall Street banker, you may want to get it taken in this year, or generally we would tell you take it next year so that you don't add to your taxable income this year.
WHITFIELD: You can tell that to your company if you're lucky enough to get a bonus?
KEN DOLAN: If you're lucky enough, yes.
DARIA DOLAN: But, but, but, with the possibility and probability of higher taxes next year, you may want to try to make sure you get that bonus before the end of this year and pay it this year's tax rate. Who knows what next year will be?
KEN DOLAN: Prepay your property taxes is another way of doing it if you're allowed to do that. Take it this year if it makes sense.
DARIA DOLAN: If you make estimated tax payments, try and get your January 15th final of the year paid before the end of December so that you can take that deduction on your state and local.
WHITFIELD: All right, Ken and Daria, thanks so much. We have lots of questions coming your way this time from our viewers. Josh Levs has been dabbling in those questions. Josh, you will join us in 15 minutes, right?
JOSH LEVS, CNN CORRESPONDENT: Yes, exactly. We are going through them right now, and we'll pick some of your questions you're sending our way. We'll send some of the most interesting ones to the Dolans.
Let me show you how to send them in right now. We'll take a look at yours during this break -- CNN.com/josh, also Facebook.com/joshlevsCNN. Send them right now. We will look at your questions and you might get some answers from the first family of personal finance, the Dolans.
WHITFIELD: I like that, the first family of finance.
(COMMERCIAL BREAK) WHITFIELD: The scandal of South Carolina governor is entering a new phase. Jenny Sanford is divorcing the governor after his affair with an Argentine woman. Mark Sanford admitted his infidelity in June. Mrs. Sanford says despite attempts to save their 20-year marriage, she simply can't repair it.
Her decisions to leave come days after South Carolina lawmakers recommended a formal rebuke for the governor.
So when most people think of boxing, they picture two people slugging it out in a ring. It's not much of a feminine sport, say many. But health experts say boxing is also an incredible workout and is actually becoming very popular with women.
As Elizabeth Cohen reports in today's "Health for Her," a lot of ladies are catching on to this fat-busting form of exercise.
(BEGIN VIDEOTAPE)
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: She may not be in the same league as Ali or Tyson, but Maggie Rajnic is a boxing fanatic. Since she lost her leg 30 years ago in a motorcycle accident, Maggie has been looking for ways to increase her strength, and she found it in a bag.
MAGGIE RAJNIC, BOXER: It creates agility where I don't have the agility and the mobility of a missing limb.
COHEN: For the past eight months, Maggie has jabbed and bobbed her way to a loss of 45 pounds and at least ten inches, which she credits in part to boxing.
Although physical fitness experts have touted boxing as a way to tone up, some women may shy away because of fear of injuries. But Felix Pagan, manager of L.A. boxing in Rockville, Maryland, says you can avoid injuries working with experienced instructors on proper form in groups while building up muscle tone and improving cardio endurance.
FELIX PAGAN, GENERAL MANAGER, L.A. BOXING: When your form is the way it should be, it helps you execute, and your exercises are more effective.
COHEN: He says an hour-long workout can burn 800 calories or more. Boxers can mix it up with kickboxing, individual training, and even martial arts. Some come away with a real sense of empowerment.
PAGAN: It's not a bad skill to learn to kick some butt.
COHEN: For Maggie, that's the best thing about it.
For today's "Health for Her," I'm Elizabeth Cohen.
(END VIDEOTAPE)
WHITFIELD: It's the kind of run-off race few big cities ever really see. And voters are at the polls right now. A look at what southern metropolis could soon elect its first openly gay mayor.
(COMMERCIAL BREAK)
WHITFIELD: Unusual voting day this Saturday. The polls are now open in the Houston mayoral run-off. Voters are taking a second crack at picking a new mayor. As our Ed Lavandera reports, voters must decide if they are will to support an openly gay city hall insider.
(BEGIN VIDEOTAPE)
ED LAVANDERA, CNN CORRESPONDENT: Annise Parker is a veteran of Houston big city politics. She served on the city council, spent the last five years as comptroller in charge of the budget. Before politics she worked in Houston's oil and gas industry. That's what gets the most attention.
The footnote is that Parker is openly gay. She's been with her partner for 19 years and they have two adopted children.
ANNISE PARKER, HOUSTON MAYORAL CANDIDATE: I have always stood up for the fact that I am gay and it's part of the resume I bring to the table, but it's just a piece of the package.
LAVANDERA: For months leading up to Saturday's run-off election, many Houston voters considered this campaign boring. That was until it became a two-way race between Annise Parker and Gene Locke, an attorney and civil rights activists.
In the last two weeks conservative groups and anti-gay activists have mounted an intense campaign against Annise parker. They've thrown their support behind Gene Locke.
Parker's sexual orientation had never been an issue in this race, but now many are wondering if this last-minute effort will hurt Parker's chances of making Houston the largest city in the country with an openly gay mayor.
Houston voters haven't been always that accepting of gay political issues. Just a few years ago, Houston votes rejected a plan to offer benefits to same-sex partners of city workers.
And 24 years ago anti-gay candidates ran what was called "the straight slate" in an unsuccessful effort to unseat a mayor who backed job rights for homosexuals.
Annise Parker was a young political activist then. She says the experience made her want to work harder. She became the president of Houston's gay and lesbian political caucus.
PARKER: Houston is a multiracial, multicultural, international city. I think my election will send a message to the world that just, kind of, Houston is a city that might surprise a lot of folks.
LAVANDERA: Parker and Locke share virtually the same positions on the issues. Houston political blogger Charles Kuffner says that makes the election a personality contest. CHARLES KUFFNER, HOUSTON POLITICAL BLOGGER: It's a matter of who do you want in the driver's seat. I as a voter believe that any of the top three candidates would do a decent job. It's a question of which one do I think will do the best job?
LAVANDERA: The latest poll shows Annise Parker with a lead in the race. But with low voter turnout expected, it's a question of which voters are the most passionate.
Ed LAVANDERA, CNN, Houston.
(END VIDEOTAPE)
WHITFIELD: The full U.S. Senate is prepared to vote tomorrow on a massive spending bill to fund the government. The $1.1 trillion includes money for the departments of transportation, education, and health and human services.
It also includes money for entitlements like Medicare and Medicaid. The Democratic-controlled Senate cleared a vote needed to end a Republican filibuster today. And Republicans say the measure spends too much money at a time when the government is running astronomical deficits.
President Obama is congratulating House Democrats today. They have passed a comprehensive overhaul on the American financial system. The legislation regulates risky derivatives and other exotic financial products that help fueled last year's financial meltdown.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Yesterday the House passed comprehensive reform legislation that incorporates many of the essential changes we need. And the Senate banking committee is working on its own package of reforms.
I urge both houses to act as quickly as possible to pass real reform that restores free and fair markets, in which recklessness and greed are thwarted, and hard work, responsibility, and competition are rewarded, reforms that work for businesses, investors and consumers alike. That's how we'll keep our economy and our institutions strong.
(END VIDEO CLIP)
WHITFIELD: The also legislation sets up a consumer protection agency. The vote on the bill 223-202. Not a single Republican was in favor.
President Obama is calling a dozen bank CEOs to the White House Monday. He wants the banks to increase lending to small businesses. The president tells this week's "60 Minutes" that he is angry with, quote, "fat-cat bankers and their excessive paychecks."
The industry propped up by billions of taxpayer dollars spent millions fighting the financial reforms just passed by the House. And perhaps you have more personal finance questions. Just ask the Dolans. Ken and Daria are back in just a few minutes to take some of your questions.
Get in on the conversation on my blog or Facebook page. Just head to CNN.com/Fredricka.
(COMMERCIAL BREAK)
WHITFIELD: A look right now at our top stories.
The FBI questioning five Americans arrested in Pakistan accused of plotting terrorist attacks. Pakistan's police chief says they admitted to the intelligence agents that they were on a mission to be martyred.
The chief also says the suspects established contact with the Taliban recruiter. The five could be extradited back to the U.S. to face other charges.
A 98-year-old Massachusetts woman has been indicted on murder charges. She is accused of strangling her 100-year-old nursing home roommate in September. Police say the two argued about the placement of a table. The victim was found dead with a plastic shopping bag tied around her head.
And more fallout from the Tiger Woods infidelity scandal. The golfer is distancing himself from public scrutiny by taking a leave of absence from the game that he loves.
And one of his major sponsors is putting some distance between Woods and their brand. Gillette says it's limiting Woods' role in its advertisements as he tries to repair his marriage.
So what impact will Woods' departure from golf at least for now have on the game? We'll ask someone who covers it day in and day out, Connell Barrett, editor-at-large for "Golf" magazine. He joins us at the 4:00 eastern hour here in the CNN newsroom.
So perhaps you have personal finance questions. They've got answers. I'm talking about the Dolans, Ken and Daria Dolan, authors, finance experts, founders of Dolans.com. You name it, they've got answers for you, all things personal finance. Welcome back, guys.
KEN DOLAN, PERSONAL FINANCE EXPERT: Hi, Fred.
DARIA DOLAN, PERSONAL FINANCE EXPERT: Thanks, Fred.
WHITFIELD: We're going to talk about foreclosures, because that is still a big issue. Filings fell eight percent in November, making it the fourth month we've seen improvement in the housing market. Does that mean we are out of the woods or are we still in trouble with foreclosures?
DARIA DOLAN: Oh, no. We are still in trouble with foreclosures. And we are getting to a point now where a lot of people are saying, gosh, if I don't get the prices back up, even though I can make these payments, I can rent cheaper, so I'm going to just walk away from this, send those keys back to the bank, and go rent for a lot less money, and then I'll have bucks to spend.
KEN DOLAN: Another big -- that's a good one, Daria. Another problem, Fred, is the fact there are 2 million adjustable rate mortgages that are going to adjust in 2010. We think interest rates trend is up. I think it's going to be a problem for a lot of people, even people with good credit, some people with 720s and 730s.
DARIA DOLAN: The bottom line is, Fred, if the government would just back off, stop with all these first-time and second-time home buyer credits, et cetera, et cetera --
WHITFIELD: Wait a minute. You don't like that idea?
DARIA DOLAN: No, because it's not allowing the market to find the absolute bottom. It's putting an artificial price range in there. Until we hit the bottom, we can't get back up on the road up in real estate prices.
WHITFIELD: That's a drag if you're a first-time home buyer, you qualify, you've got all your ducks in a row, you're saying that even this great little benefit is bad timing. If you get to take advantage of it, there is a ripple effect that could cause real problems for everybody else?
KEN DOLAN: We are not saying there aren't buys out there. All we're saying is we think it's an artificial housing number, Fred, because you're going to see purchases up through May 1st, which is the new extension. And they say oh, boy, housing's great. Everybody is taking advantage of the credit, and then it goes down from there.
We are not saying don't use the first time home buyer credit if you can get a good house for the right place.
DARIA DOLAN: Talk to real estate agents trying to sell the higher end of the market. It's not happening.
WHITFIELD: Two things you mentioned that make for a great segue into Josh and some of questions we are getting from people. You mentioned the whole renting idea and you talked about ARMS. So Josh, take it away, because you've got folks inquiring about both those things.
KEN DOLAN: Hey Josh, how is your new kid?
DARIA DOLAN: How is baby Levs?
JOSH LEVS, CNN CONTRIBUTOR: Baby Levs is wonderful. Thank you very much. I love when you check in, it makes me so happy, and so does the family.
All right, let's do this. Go straight to the first question from the blog. This one is from Ben. "My wife and I are recently self- employed after layoffs. Our mortgage is an interest only 5.1 ARM. It kicks in next July, the current rate 6.5 percent. We've never missed a payment but fear our payments will increase."
I love this question because so many people are terrified of what happens in this economy when the ARM that they took out five years ago...
WHITFIELD: A lot of people got in trouble last time around anyway.
LEVS: What can they do?
KEN DOLAN: That is a very good question, Ben. And we just alluded talking with Fred about 2 million adjustable rate mortgages. We hate ARMS. And if we hate ARMS, we detest interest-only. You're asking for trouble.
DARIA DOLAN: Normally I would say go and refinance it. But if they both lost their jobs, they don't want to let the bank know that they're unemployed because the bank could step in and say, excuse me.
KEN DOLAN: Not drop them, but technically could be due on request, technically.
LEVS: I'm hearing what not to do. What are the options? What is the proactive here?
DARIA DOLAN: What they need to do is don't waste any time. Get a job. Find any job. Take whatever you need, if you need to take two so that you have income coming in so you can refinance before that July change.
LEVS: Try to find a job out there that will give you some stability.
KEN DOLAN: I agree. Absolutely, Josh.
WHITFIELD: What about the rental question you had also, Josh?
LEVS: This is about rentals and where they are heading. We'll go to the graphic on that one.
KEN DOLAN: OK.
LEVS: This is "I'm short on cash but own several rental properties. And fortunately I'm not underwater. My holdings are duplexes and single family homes. What is the outlook longer term for rentals?"
KEN DOLAN: There is a genius to be even or slightly better during the two worse rental years in the world. I think rental is for the point you said, Daria, depending where it is, depending on the demand for rentals -- it's hard to generalize.
DARIA DOLAN: If it's in a blighted area, no.
KEN DOLAN: I think rentals in areas where people are simply not able to buy homes, or frankly, Barry, not able to stay in homes, I think rental is going to be very, very attractive.
DARIA DOLAN: I think it's a much stronger market than buying a house right now. I think Barry is in great shape.
KEN DOLAN: If you can do well for the last two years, Barry, and stay even, get ready for the next two years.
LEVS: Let me ask you since we're on this, and this is the last one, about investments. Can we zoom in on my screen for a second? We'll check out some of the tweets we got. This came to me.
Over here -- "Gold rules." I don't know if this is true. And by the way, I checked the person who tweeted us and does not seem to be a gold advertiser. But is it a good investment right now? Should you grab all your gold, liquefy it? What do you do?
DARIA DOLAN: Having been invested in gold for a long time, I sound like the commercials now, "I've been gold investor for ten years."
WHITFIELD: You had that great story about your gym and people getting their gold weighed and all that good stuff.
LEVS: That was weird.
DARIA DOLAN: What we are seeing right now is, we are seeing a pullback, but interestingly enough, as I was doing some reading this morning on financial stuff...
KEN DOLAN: I was asleep.
(LAUGHTER)
DARIA DOLAN: What can I tell you? Mutual fund managers are starting to put gold into mutual fund portfolios. So when the smart money is starting to look at that -- what we are having right now, I think, is a very healthy pullback. It got way ahead of itself.
And I think you can still hold off jumping into the gold market because I think there is more pullback to come. The dollar is on a tear right now. It's strengthening because of other things around the world that make us look worse than really we should be allowed to look.
KEN DOLAN: France is a better credit rating than we do. Let's talk about that some other time.
DARIA DOLAN: That's scary. So I think there will be another entry point available. I think it's too early right now.
LEVS: For now no gold rush, you say.
DARIA DOLAN: I wouldn't go rushing in.
WHITFIELD: Excellent. Ken and Daria Dolan, thanks so much.
KEN DOLAN: Bye Josh.
WHITFIELD: Always appreciate your insight. You always feel richer after talking to you.
(LAUGHTER)
And Josh Levs, thanks so much. Appreciate everybody and everyone at home for sending your very delving, smart questions.
Of course, don't forget, if you do want to ask the Dolans anything else about your personal finance, just head to their Web site, Dolans.com. They have tips and answers to all of your questions 24/7. You can always count on them.
Josh, you're also going to join us in a few minutes to talk about changes on Facebook these days.
LEVS: Yes. We were just using Facebook to talk to the Dolans and getting your questions. There have been some changes to Facebook that involve privacy. A lot of people asking us, can I really trust it?
I have an expert who will talk to us and tell you what you need to know to check the privacy status of your Facebook account and make sure what you want to be private stays that way.
(COMMERCIAL BREAK)
WHITFIELD: Flipping through a newspaper or reading a menu seems like such a simple task. But for the vision impaired, it's not quite that simple, until now. CNN's Gary Tuchman has the story of a cell phone that goes far beyond Braille on this week's "Edge of Discovery."
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN CORRESPONDENT: Blind since birth, but that doesn't stop Jim Gashel from reading just about anything he can get his hands on.
How does he do it? Jim uses a powerful cell phone rigged up to read. Yes, read -- a book, a dinner menu, the money in his pocket.
JIM GASHEL, VP, K-NFB READING TECHNOLOGY: If I'm in a hotel room and I need to know the difference between the conditioner and the shampoo or the conditioner and the mouth wash, no problem.
TUCHMAN: It's called the Kurzweil National Federation of the Blind Reader.
GASHEL: I now think of myself as a person who can read print. And I never did that before.
TUCHMAN: The reader has been out two years. A new version has been released that can recognize the colors of James' clothes and even translate Spanish to English. It doesn't recognize objects yet, but Jim says it's coming soon. He works for the company. GASHEL: We call this technology life-changing. and it really is. In the future we will be recognizing things. It's small things that add up to a lot.
TUCHMAN: So while the reader's price tag of as little at $1,400, may sound expensive to some, to others it's priceless.
Gary Tuchman, CNN.
(END VIDEOTAPE)
WHITFIELD: Perhaps you love friending new friends. But you don't want your private facts all over the internet. Some new privacy settings on Facebook to tell you about.
(COMMERCIAL BREAK)
WHITFIELD: Coming up in the next hour, color barriers broken down on film as Disney casts its first black princess.
And fashion trends of 2009, plenty of people had an impact, but one person really stood out for her fashion choices. A look how the first lady is setting the style. It's all coming up in the next hour.
And if you're one of the 350 million people who use Facebook, there's something you need to know. There are some changes in the site's privacy settings. Our Josh Levs is here to explain what they are and how they work.
And I thought once you're on Facebook, there is no privacy. It's out there.
LEVS: You know something, if more people would be comfortable with that, it would just relieve so many people of so much stress.
WHITFIELD: Who goes on Facebook and thinks they have privacy?
LEVS: This is interesting that you would say that, because there are some people who still think they do, and I have been asked by so many people about these latest changes.
So what we have here is our good friend of the show Ben Parr from Mashable.com, who is an expert. Hey there, Ben.
BEN PARR, WRITER, MASHABLE.COM: Thank you for having me on again.
LEVS: We love to have you one.
Here is what I want to do. Before we dig into the specifics, let's give everyone the basic idea. Facebook came out with this announcement saying we are changing our privacy system. You need to do a bunch of clicks, big picture.
Ben, given that, is it now possible to have the same amount of privacy you had a month ago, a year ago on Facebook, or has Facebook forced you to take stuff you thought was private and make it public?
PARR: The answer is, yes, you actually have control. You can have the same amount of privacy that you had before, but you have to know the settings in order to do it right.
LEVS: So the trick here is you can do it. What we're going to do is very quickly take a basic look how this works and then I'll tell everyone where we posted more information.
But zoom in on the board. This right here is something that Facebook itself has created that allows you to see what it is they want you to do. They put together this little video. They guide you through.
But the truth is most people have taken some initial steps so far and are really concerned. So Ben, talk to me about this. This is my Facebook page. I went to my privacy settings. What are the two major things I should look at?
PARR: You should take a look at your profile information and your contact information.
LEVS: OK. I have my profile information here. And now what do I do?
PARR: You want to check whether your information is public to everybody or whether you want it to be only to your friends or to nobody? And you have control over each item.
LEVS: And you look at your contact information, the exact same thing. Your contact information will show you over here on the right. Over here it says "only friends, only friends, only friends." You have the ability basically with only two clicks to check whether everything you want is still hidden, right?
PARR: Exactly.
LEVS: OK. And to you, you kind of agree with Fred, though. You say, in the end, don't put anything online if you want to keep it private.
PARR: Yes. As I have told multiple times to many people, if you don't want your mother to see it, don't put it online.
LEVS: All right. Look, this is a great rule of thumb. I want to everyone what we've done to help you. Let's go straight to the graphic. We're taking all of the information about how to keep your Facebook information private. We're posting it to blog.CNN.com/josh. Also Facebook and Twitter, JoshLevsCNN, including a step-by-guide guide from Mashable.
Ben Parr, thank you so much. I really wanted to hear your view on this and you are comforted (ph) that really, things have not revolutionized from Facebook.
PARR: Absolutely. Thank you for having me on again. LEVS: All right. Great.
And Fred, I think hopefully we can help relieve some people. And hopefully what we posted there on the blog -- and we'll get it going in the next few minutes -- will help everyone check all their privacy settings and make sure they're happy.
WHITFIELD: Right. I like the line about your mother. If you don't want your mother to read it then don't put it on there. Everyone's going to read it -- it's public domain.
LEVS: Let's say you keep it private, someone else out there can make it public. You know, if it's out there, it's out there.
WHITFIELD: Exactly.
All right. Thanks, Josh. Appreciate that.
LEVS: You bet.
