Return to Transcripts main page
CNN Newsroom
More NIU Shooter Information; Largest-Ever Beef Recall; Kosovo Declares Independence
Aired February 17, 2008 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(COMMERCIAL BREAK)
TONY HARRIS, CNN ANCHOR: It is the nation's largest ever beef recall. More than 140 million pounds worth. We will tell you what you need to know to keep the bad meat off your table. Days after a murderous rampage on the campus of Northern Illinois University, the killer's motive remains unclear.
Tonight -- we hear from a woman who dated him recently. Does she have any answers? And what do you do when your American dream goes bad? We go in depth into the mortgage crisis and answer your questions. It's a CNN special report, "American Dream? American Nightmare."
You're in the CNN NEWSROOM. And good evening, everyone. I'm Tony Harris. Let's get right to it. It's the biggest beef recall in U.S. history, more than 140 million pounds of frozen beef declared unfit for human consumption by the Agriculture Department.
The move was announced today in the wake of animal cruelty charges against two former employers of Westland Hallmark Meat Company in Chino, California. The feds suspended operations at a slaughterhouse after undercover video showed crippled and sick animals being shoved with pitchforks.
Much more on this story to come. We have a reporter heading to the beef plant right now. And she will bring us a live report at 10:00 p.m. Eastern Time only in the CNN NEWSROOM.
Day three now since that horrific college campus shooting rampage that left five people and a very disturbed young man dead. Every few hours we're able to peel away another layer of the tragic mystery, and we have new developments right now.
About prescription pills, a goodbye note, and a young woman who might have known the gunman better than anyone. CNN SPECIAL INVESTIGATIONS UNIT correspondent Abbie Boudreaux joins us now from St. Charles, Illinois. And Abbie, what have you found out?
ABBIE BOUDREAU, CNN CORRESPONDENT: Tony, just two hours ago, we sat down with the person closest to Steve Kazmieczak, his girlfriend of two years, Jessica Baty. Now, since the shooting, she's received multiple packages and gifts from her boyfriend. He even wrote her a note that she received on Valentine's Day, the same day of the shooting. That note said some very intimate moments that they have shared together. This is what the note said in her own words.
(BEGIN VIDEO CLIP)
JESSICA BATY, NIU SHOOTER'S GIRLFRIEND: "You're the best, Jessica. You've done so much for me, and I truly do love you. You will make an excellent psychologist or social worker some day. Don't forget about me. Love Steven."
I can't believe he's gone. I can't believe he took over other people with him.
The person that I knew was not the one that walked into Cole Hall and did that. I mean, that wasn't the Steve I knew, and he was anything but a monster. He was probably the nicest, most caring person ever.
(END VIDEO CLIP)
BOUDREAU: Now in the course of the couple hours that we spent with her, she did reveal some very personal moments of their relationship. We asked her about the prescription drugs that he had been taking. She said that he was on prescription drugs for anxiety and also for obsessive compulsive disorders.
She said that he stopped taking that medication about three weeks ago, but that she says it did not cause him to start acting erratically. We also had her confirm that he was an unruly teenager. He felt bad about those teenage years. She said he did live in a group home but that he had cleaned up his act since then and that during the course of their relationship he seemed very normal.
Now, they did live together and she did tell us that he knew that he had guns in the home, but -- she knew of two guns he had kept locked up in a closet. She did not know about the two guns that he had had bought more recently. Now, this is an interesting note, Tony. She said that one of the packages that he sent to her contained a gun holster and ammunition. She has no idea why he would send something like that and does not know the significance. She's left with a lot of unanswered questions. Tony?
HARRIS: For sure. Abbie Boudreau for us. Abbie, appreciate it. Thank you.
A bomb went off in Afghanistan today and by itself that's nothing new, but the casualty toll makes it one of the worst single acts of violence since the fall of the Taliban. It happened in Kandahar, Southern Afghanistan. A huge crowd was watching a dogfight when a suicide bomber detonated themself. As many as 80 people died, about the same number wounded. A prominent anti-Taliban militia commander is among the dead. Officials think he may have been the target.
Next door in Pakistan, the polls open for parliamentary elections in just under four hours, and tension is high over possible violence and voter fraud. A suicide bomber hit a political party office just yesterday, killing 40 people, and police report several shootings and explosives related incidents today. A contingent of American lawmakers is in Pakistan to observe the balloting.
Now Kosovo. And make no mistake, Kosovo is not an independent country. Not yet, anyway. It is a province of Serbia, about the size of Connecticut. But today Kosovo's parliament made good on a long- made promise to declare independence. And that's what they did. Look at the celebrations in the streets of Pristina. Albanian flags and overjoyed residents, many who say they've waited 10 long years for today.
But as you might expect, not everyone is on the same page. In Serbia's capital Belgrade, the exact opposite. Protests against Kosovo's independence, angry demonstrators attacked some Western embassies and mixed it up with riot police for several hours. Serbian officials call it illegal and promise to hold onto its troubled province.
The United States supports Kosovo's move to become independent.
Russia, however, does not. And in a big way. CNN's Matthew Chance is in Moscow.
(BEGIN VIDEOTAPE)
MATTHEW CHANCE, CNN CORRESPONDENT (voice-over): Russia has been strongly against this declaration. It says that Serbia, its traditional ally, does not support it and that there's no specific United Nations Security Council that authorizes the partition of Serbia and therefore, it's illegal. Russia has gone out on a diplomatic limb, confronting the West, confronting the United States and the European Union or countries within the European Union saying, look, we do not want to see this declaration of independence happen, but it's gone ahead and happened anyway. It's a big diplomatic slap in the face for Russia.
Russia also argues it sets a very dangerous precedent and could open a Pandora's box of other separatist conflicts around Europe. President Vladimir Putin, the Russian leader, has spoken of the possibility of various frozen conflicts in the former Soviet Union being rekindled by this Declaration of Independence, especially if countries go ahead, like the United States, like many European countries, and recognize Kosovo's independence.
He's also talked about how, for instance, the Basques in Spain could have their separatist struggle rekindled by this declaration of Kosovo independence. So from the Russian point of view, this is a very negative development indeed.
(END VIDEOTAPE)
HARRIS: That's CNN's Matthew Chance.
Tuesday is a presidential contest in Wisconsin, Washington State and Hawaii will be an intense battle for superdelegates on the democratic side. Hillary Clinton's or Barack Obama's nomination may depend on those delegates, they are high-ranking party officials who are not required to pledge to either candidate. Both are in Wisconsin drumming up support. Obama leads in the delegate count but Clinton apparently has more superdelegates supporting her. Meanwhile, Barack Obama hopes his former rival will support him. John Edwards met with Obama today in Chapel Hill, North Carolina. CNN's Jessica Yellin is monitoring it from Milwaukee ahead of Tuesday's primary. Jessica, great to see you. What are you learning about that meeting?
JESSICA YELLIN, CNN CORRESPONDENT: Well, I'll tell you, Tony. Barack Obama sat down with both John and Elizabeth Edwards at their home in Chapel Hill today. An Obama campaign spokesperson says that they discussed the state of the campaign and quote "pressing issues facing American families."
The subtext of all of this, of course, is that Barack Obama is seeking an endorsement from John Edwards and Senator Clinton has taken a meeting with John Edwards as well. She did that some time ago. Both are vying for a nod from him. Because if he could give them his support and send his supporters to one campaign or the other, that could be a decisive move and determine who wins either Ohio, Texas, even this nomination.
They feel that it would be of enormous help, the sense is, if John Edwards were to endorse. So far, no word of any Edwards endorsement pending. Just that this meeting has taken place. It comes just as both Senator Clinton and Obama had plans to campaign in Wisconsin stymied because of the terrible weather here, a mix of sleet and snow forced Senator Clinton to turn around the campaign plane and for Obama to cancel a visit to this state.
Both of them are campaigning hard ahead of the Tuesday primary in this state. John -- Senator Barack Obama is seeking to get some of those independents and Republicans who are allowed to vote in the Democratic primary to come out and cast their ballots for him.
Senator Clinton squarely targeting those blue-collar voters, some of them John Edwards voters who have responded so positively to her policies. They are vying very aggressively because they know every single contest could switch this delegate count you were talking about and give one of them a decisive majority. So it is a tense battle, and they expect to be back here tomorrow making up for the campaign stops they missed today.
HARRIS: Jessica Yellin, fresh off the BALLOT BOWL this afternoon on CNN and Jessica, we're going to talk about some of that nasty weather in Wisconsin that you're all experiencing with Jacqui Jeras in just a moment. Jessica, thank you.
The best political team on television and online for up to the minute news on all things political, we encourage you to logon to cnn.com/politics.
OK. A lot of severe weather to talk about here with Jacqui Jeras in the severe weather center. Jacqui, tornado warnings, hail, freezing rain, really nasty stuff.
(WEATHER REPORT)
HARRIS: Folks just need to hang on. What a mess.
JACQUI JERAS, CNN METEOROLOGIST: Stay home today if you can.
HARRIS: Stay home. OK, Jacqui, appreciate it. We'll check back with you a little later in the hour.
More than a million people have already lost their homes in the mortgage meltdown mess. Some areas of the country worse than others. By now, you've heard the numbers, but that's not all we're here to talk about this evening. The real story tonight are the people who fear this will happen to them.
For more on that and some expert advice about what to do if you're in trouble and a candid discussion about where this mess is headed and how it may affect each and every one of us. You're watching CNN, the most trusted name in news.
(COMMERCIAL BREAK)
HARRIS: You know, the American dream has become the American nightmare for homeowners across the country. Tonight we're focusing on the people behind the soaring foreclosure numbers, people whose very foundation is being pulled out from under their feet. They might be your neighbors. They might be you.
First, the numbers. The banks started foreclosure proceedings on nearly 1.3 million properties last year. That is a whopping 75 percent increase from the year before. Leading the pack, homeowners in California, Florida, Ohio and Michigan. The number of foreclosures in California went up 185 percent last year. Florida's went up 119 percent, Ohio 102 percent, and Michigan 70 percent. The Greater Detroit Area had the highest foreclosure rate in the country with close to five percent of its homeowners entering foreclosure last year.
Georgia is also high on the list. Very high. Thousands of people lost their homes there just this month. But let's get away from the numbers for a minute and focus on the people, the families. Here's CNN's Rusty Dornin.
(BEGIN VIDEOTAPE)
RUSTY DORNIN, CNN CORRESPONDENT (voice-over): This is where it ends.
UNIDENTIFIED MALE: Sheriff's Department.
DORNIN: Police executing an eviction order for homeowners who can't make their loan payments. It's happening in every city across the country as millions of Americans lose their homes to foreclosure.
Nessia Jones of Atlanta went to Legal Aid for help, fearing she may be next.
(on camera): If this doesn't work and you lose this house, what's next?
NESSIA JONES, HOMEOWNER: We'll be outside. We have nowhere to go.
DORNIN (voice-over): She remembers the day she moved into her home 26 years ago.
JONES: We were happy. We were finally going to have something of our own.
DORNIN: Those were brighter days. Now Jones cares for her 32-year- old disabled daughter. They live on $1,250 a month in Social Security disability.
JONES: Chelsea!
DORNIN: In October of 2006, a mortgage company offered her refinancing through two new adjustable loans. She needed the money. Now she's paying for it.
(on camera): About how much altogether did your payments go up as a result of this refinance?
JONES: About $400, $500almost.
DORNIN (voice-over: According to Jones and her attorney, Karen Brown, the mortgage broker falsified Jones' income on the loan papers.
KAREN BROWN, JONES' ATTORNEY: On one page, the loan application said that Ms. Jones wasn't working. On another page, it said she's getting monthly employment income of $3,950 a month. You can't get employment income if you're not working.
DORNIN: There were other discrepancies as well, and the broker's license has since been revoked. Only Jones didn't discover her payments went up until last February.
(on camera): So you weren't able to pay these payments as soon as they occurred?
JONES: No. Because I had had to get help from my church the second and third month, and from there on I haven't been able to pay the second mortgage.
DORNIN (voice-over): Frightened she would lose her home, that's when she called Legal Aid. Her attorney says nearly every single case that comes to them is exactly like Nessia Jones.
BROWN: They're devastated. They're desperate. They don't want to lose their homes. They've been living in them for 30, 40 years. And they come to us asking for whatever we can do to try to help them. And we do the best we can.
DORNIN: Jones' case was used as an example in a recent press conference by Georgia legislators open the mortgage tries here.
VINCENT FORT, GEORGIA STATE SENATE: This is the greatest foreclosure crisis, mortgage crisis, since the 1930s. It's unprecedented in the history of this country for the last 70 years. DORNIN (on camera): Georgia has the fastest foreclosure rate in the country, just 37 days. And look at this 7,000 foreclosures scheduled for the Metro Atlanta area for the month of February. That's the highest rate ever.
(voice-over): Statistics that become the faces of people like merchandise Neesia Jones. The bank rejected one settlement offer by Legal Aid, and Jones' house is in legal limbo. In the meantime, unable to pay the heating bills, she bundles up, the house falling into disrepair.
(on camera): You're hoping to hold onto this house as long as you can.
JONES: I'm going to fight going down. I'm not giving up. I can't.
DORNIN: Millions of homeowners fighting like Jones in a crisis economists say every American will pay for, even if their homes are safe. Rusty Dornin, CNN, Atlanta.
(END VIDEOTAPE)
HARRIS: OK. So how will this mortgage crisis impact you if it hasn't already? Think credit cards and the cost of borrowing money. Up next, we're talking live with two credit and mortgage experts about what we are likely to experience in the near future. Stay with us.
(COMMERCIAL BREAK)
HARRIS: So how did we get into so much trouble on the home front? Go back six years to find the root of the problem. That's when many of the subprime mortgages became popular, lots of lenders began to offer mortgages to people with spotty credit histories or unreliable income. The loans offered low initial interest rates to hold down the monthly cost. But over time rates jumped way up, strapping homeowners. Many were unable to keep up with monthly payments. So what if your home is not in foreclosure? How does this impact you as houses sit foreclosed and vacant, the value of homes throughout the neighborhood suffer. That's your home.
Last year, home values fell nationwide for the first time since the Great Depression. But that's not all. Whatever assistance the government may offer, we will pay for. But to what extent?
How about some meaningful advice for homeowners in trouble? We brought in two experts tonight to answer questions for you. Sue Hunt is with Consumer Credit Counseling service, and Clyde Anderson is an author, credit consultant and mortgage advisor.
Good to see both of you. Can we help some folks tonight? Let's try. Let's try. And Clyde, let's start with you. How bad is it out there for people right now? If you're sitting in your home, in many cases you're watching your home, your primary asset, devalue before your eyes.
CLYDE ANDERSON, CREDIT CONSULTANT: Exactly. HARRIS: And if you're in one of these loans that's about to reset, you've got spotty credit, that is a bad scenario as well.
ANDERSON: A very bad scenario, Tony. And the way I look at it, it's almost an epidemic because you yourself are sitting on your property. You may have paid, say, $200,000 for your home. Now the homes in your neighborhood are beginning to go into foreclosure. Maybe they sell for $130,000. You are now affected. You're in a position where the equity is gone from the house, you're in a position where you can't really sell your home.
HARRIS: That's -- you're talking about the equity you're losing in your home by virtue of the fact that the other homes in the neighborhood have maybe gone into foreclosure and impacting the values throughout the rest of the community.
ANDERSON: You're exactly right.
HARRIS: OK. So, Sue, here we go. What do we do now? We're in a situation where we're looking at needing a refi, otherwise we're going to set on a rate that we absolutely can't handle. We may have signed one of these deals with spotty credit. We didn't fall into a pot of money now, which means our credit is still spotty. What do we do? What kind of a situation are we in, and are there remedies out there?
SUE HUNT, CONSUMER CREDIT COUNSELING SERVICE: Well, I think the most important thing is, if you're in a home and even those bad things are happening, they need to make the mortgage payment their first priority.
HARRIS: Yes.
HUNT: So that they can keep their credit in as strong a position as possible, even through a very difficult economy. They need to sometimes just wait out the bad situation. I would also suggest that if people are looking at having their payments increase, that they talk with either their lender or with a credit counseling agency to see if they could put together a budget or a plan that would minimize the amount of the increase.
HARRIS: That sounds key. The idea of talking to the lender. A lot of folks sort of bear and suffer through this on their own, trying to figure out a way to make this happen, when perhaps the smarter thing to do is to call the lender.
HUNT: It absolutely is. Lenders don't want people's homes. They want to do is whatever possible to keep them in their homes. We tell people, call your lender. See what they will do for you. Let them know what your situation is. Try to work it out and keep that mortgage payment current.
HARRIS: Anything else, Clyde, you're thinking about that might help the person who's looking at a pricey reset right now?
ANDERSON: I think she said it exactly right. Sue, when you're saying you have to contact them. A lot of people are embarrassed. They don't want to face it. But they pay their credit cards instead of paying their mortgage payment, when realizing the mortgage is the most important thing to pay.
HARRIS: Well, I have to tell you there are a couple of proposals being made by the administration right now. I wonder what you think of them. The Hope Now proposal. I guess this is the idea of having the mortgages actually frozen, giving you 30 days if you're possibly going into foreclosure, giving you some time to work out some agreement with your lender. Do you like that, Sue, as a proposal moving forward? Is that a bit of a lifeline for people?
HUNT: I think it's a great idea. I think more and more we're seeing programs helped by the government. The Hope Now program, where we're seeing lenders being much more ambitious in helping homeowners out. I would also suggest who are homeowners worried about the situation calling a credit counseling agency, talk to a housing counselor, work out a budget.
HARRIS: What can credit counseling agencies do for people?
HUNT: Well, what most people don't do is make a budget. That's why one of the best things we do as housing counselors is help people make a budget. And then once we know what their budget is, we can help them identify a program that really will work for them and help them know what to talk to the lender about.
HARRIS: Yeah. OK.
HUNT: So we educate people and help them.
HARRIS: Here's the other thing, Clyde. You talk about the Hope Now proposal, the Project Lifeline proposals, two proposal from the administration moving forward. Feels like, feels like, a bailout for folks who entered into bad loans. Is that something that we're all going to pay for, whether I'm involved in this crisis or not, whether I'm sitting at home with my over 700 credit score and in good shape? Am I going to have to pay for the bad deals struck by others?
ANDERSON: Ultimately, I think we all pay for it, just as we mentioned in the situation in your neighborhoods. So if you're losing value on your property, you're paying for it right there. I think some of the programs coming available are a temporary fix. I think these are a Band-Aid, but they are a temporary fix to help people out of the situation. To me, 30 days doesn't really do a lot. If you've gotten into a situation where you're 90 days behind in your mortgage, you really should have been proactive a long time before that point.
So once you get to that point, it's really hard to come back and have some sort of situation be repaired. A lot of times it takes a long time to communicate with these lenders. The paperwork goes back and forth. Things get lost. So you really have to be on top of it.
HARRIS: Why, Sue -- look, I had nothing to do with this. I had had nothing to do with this crisis. Why now am I in a situation where the government is making proposals that, according to Clyde, that ultimately I'm going to have to pay for in one way or the other? I don't like it. I don't like it at all.
CLYDE: I don't think that we really can decide who is fully at fault in this crisis. I think that we're trying to do now is to minimize the damage. To minimize not only the damage to the individual homeowners who are suffering but to the big picture of homeowners. If we can cut down on the number of foreclosures in the neighborhood, we'll preserve the values in that neighborhood. That will keep those homeowners who haven't fallen behind from suffering harm.
HARRIS: All right. Sue, Clyde. Stick around. We're going to get to e-mails from folks at home in just a couple of moments. Thank you.
And more personal stories of the American dream becoming the American 0nightmare.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I may lose my home from the bank. It's really devastating.
(END VIDEO CLIP)
HARRIS: She was only helping her sick mother. She refinanced and now is about to lose everything. The government wants to help her, but is it too little too late?
And we're also answering your questions and e-mails live about how the mortgage crisis impacts you. We're right back.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
HENRY PAULSON, TREASURY SECRETARY: Project Lifeline is aimed at homeowners who face a real risk of losing their home and have not yet addressed the problem. Perhaps they're hoping to find a way to get current on their mortgage payments or perhaps they don't think any solution is possible. For whatever reason, they have not yet taken action. Our hope is that today's announcement will reach them and they will reach out immediately for help, especially now that the foreclosure process is upon them.
(END VIDEO CLIP)
HARRIS: Get help now, the Bush administration's message to troubled homeowners. Just last week it took the raps off Project Lifeline, a new broader mortgage rescue plan. Unlike the previous plan, this one extends beyond subprime borrowers, and it targets homeowners who are at least 90 days delinquent on their mortgage payments. And allows them to hold off foreclosure at least for the short term.
Supporters call Project Lifeline a helping hand. Critics call it a bailout. Whatever you may call it, one thing is for sure -- a lot of people need help. And they need it right now. Allan Chernoff introduces us to one of them.
(BEGIN VIDEOTAPE)
ALLAN CHERNOFF, CNN CORRWESPONDENT (voice-over): Daisy Respas is struggling to hold onto her home outside Baltimore as her high- interest subprime mortgage has pushed her to the brink of foreclosure.
DAISY RESPAS, HOMEOWNER: That I may lose my home from the bank is really devastating.
CHERNOFF: Respas left a secure state job when she had to care for her ill mother. Bills piled up, and she decided to refinance her mortgage. Now, saddled with an interest rate above nine percent, she's been unable to find a new job.
DAISY: It is very frightening. It's indescribable.
CHERNOFF: The Bush administration is offering some help, convincing major banks to hold off on foreclosures for 30 days and renegotiate loan terms with homeowners in trouble.
PAULSON: Project Lifeline has the potential to offer new solutions to responsible, able homeowners who want to keep their homes.
CHERNOFF: Maryland needs a lifeline. Foreclosures in the state have jumped approximately 13 fold in the past year. The nonprofit southeastern development corporation said it counseled as many people facing foreclosure in January as it did all of last year.
CHRIS RYER, SE COMMUNITY DEVELOPMENT CORP.: We've seen a number of people come into the office from all over the Baltimore Metropolitan Area that are in danger of losing their homes.
CHERNOFF: Respas' lender, Indymac is on board with the administration's Project Lifeline. The savings and loan told CNN, "We're actively reaching out to our customers to ensure that as many as possible who have the desire and ability to stay in their homes may do so. Indymac would not address Ms. Respas' personal situation.
Daisy Respas is hoping her lender will agree to easier terms in addition to the 30 day reprieve and she's turning to her state government, applying for an interest-free loan.
(on camera): Ms. Respas hopes all of the steps will allow her to get out of her debt squeeze and hold onto the home she loves. Allan Chernoff, CNN, New York.
(END VIDEOTAPE)
HARRIS: We are answering your questions and e-mails live about how the mortgage crisis impacts you. That's next.
Our mortgage and credit experts are busy reading your questions right now. Stay with us right here in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: Well, tonight we've been focusing on the mortgage mess, asking you to e-mail us your questions. Our experts are here in the newsroom standing by to answer them. Meet once again Sue Hunt with Consumer Credit Counseling Service and Clyde Anderson, an author, credit consultant and mortgage advisor. And let's see, our first question comes from David. "If my bank forgave my home equity loan and I sell my house, do I still owe that money to the bank?" Who wants to take this one? Clyde or Sue?
ANDERSON: I think I'll take that, Tony.
HARRIS: OK. Clyde.
ANDERSON: First it's very generous that his bank forgave his home equity line. Very generous of the bank. When you look at it, I would say he's not responsible for that any longer. But make sure you check your credit report to see how that's reporting on his credit reporting. If they forgave it, pretty much it goes away. Again, generous on their part, but you definitely want to make sure you're covered. Check the credit report to see if it's still reporting on your credit report to know for sure you're clear and free and it's done.
HARRIS: All right, Clyde. Our next question is from Toomby (ph) who writes, "If I live in my house less than two years and I make a short sale," maybe we can explain that, "will I pay tax on the balance of the short sale?" Who wants to take that? Sue?
HUNT: I'll take that one.
HARRIS: Sue?
HUNT: Let me first of all address what a short sale is. Basically, in a short sale it's an agreement to sell the house for less than what the mortgage is worth. That allows the lender to lose some money and the homeowner to lose some money, and the idea of that each party involved will lose less money that they might have through a foreclosure or some other way of selling the house.
Is that -- if you do a short sale, is that going to be a tax consequence to the homeowner? That is possible. There are some states and there are some lenders who will try to collect that short sale amount after the sale of the house and in some cases, especially in the past, it has been reported as income.
But there have been recent changes to the tax codes that will allow many people to do a short sale without having tax consequences come in. And they should also check with their lender. And as Clyde said earlier, check your credit report to see what's being reported there.
HARRIS: Smart, smart, smart stuff here. OK. Let's get one more question in in this segment of the program from Terry who writes. "Why don't the banks and realtors help people downsize and move to enter a more realistic home-financing solution? Why expect someone to be able to afford a large home by merely freezing a rate for a few months as some suggest?" Who wants to take this one?
HUNT: I'll go ahead with that. One of the things we do at Consumer Credit Counseling Service in Greater Atlanta is we offer pre-purchase counseling. That's really where this comes in. We are really strong supporters of a person, before they buy a house, going to a pre-purchase counseling seminar. Learn about the pros and cons of buying a home, how much it's going to cost you, the different kinds of loan products that are out there. That will help you make a good decision when you buy your house and a decision that you can live with financially for a long time.
HARRIS: That's great. OK. We're going to get back -- Clyde, did you want in on that?
HUNT: I was going to say, the second part, where they asked about how can you expect someone to afford a large home by merely freezing the rate, I think what they're trying to help you to come up with a solution at that point. You're already into the large home. You've already had the problem. It's not necessarily that freezing the rate is going to fix everything and make it better. It's just the fact that now they're giving you some time to come up with a solution to get out of the situation.
HARRIS: You know what? The viewer questions are so much better than my questions. Why do we bother with my questions? All right. We're going to get back to our guests, Sue and Clyde, in just a few minutes to answer more of your questions, the best way to approach this. E- mail them to us at weekends@cnn.com.
And again we're answering more of your questions in just a couple of moments.
Exactly how will the foreclosure crisis impact you? And what should you do to stay in the green? More answers coming your way.
(COMMERCIAL BREAK)
HARRIS: You know, there's a story of homeownership gone all kinds of wrong in just about every corner of the United States. Homeowners and lenders are wondering when it's finally going to end. Here's CNN's Dan Lothian.
(BEGIN VIDEOTAPE)
DAN LOTHIAN, CNN CORRESPONDENT (voice-over): Even in a state where fortunes are won and lost every day, the bad bet on real estate and risky mortgages is extreme in Nevada.
KIM CANEDA, EXTREME REALTY: This has been -- see the yellow flyer in the window?
LOTHIAN: We drove around North Las Vegas with real estate agent Kim Caneda who showed us house after house currently in foreclosure.
CANEDA: This I would say is a foreclosure.
It's just the worst I've seen it since I've been dealing in real estate. LOTHIAN: In fact, there's one foreclosure filing for every 152 households in Nevada. More than four times the national average, according to Realty Track. Surf the Las Vegas's craigslist and you'll find a seemingly endless list of foreclosures. The Consumer Credit Counseling office is feeling the pressure.
MICHELE JOHNSON, CONSUMER CREDIT COUNSELING SERVICE: The number of people we touched in December of '07 was 70 percent higher than what we did in December of '06.
LOTHIAN: At this home in Henderson, just outside Las Vegas, there's a name behind all the statistics.
EVA MARIE BUGARIN, HOMEOWNER IN FORECLOSURE: We had so many plans ...
LOTHIAN: Eva Marie Bougarin and her family, which includes her handicapped mother, are struggling to hold onto their four-bedroom home. The foreclosure process is already under way.
BUGARIN: I go to bed at night and I cry myself to sleep. There's been several times I do that because I really don't know where I'm going to go with my family.
LOTHIAN: Caught in a loan with fine print that sent mortgage payments from $1,500 a month to $3,500, too expensive for her part-time job and her husband's salary.
BUGARIN: I keep thinking maybe there might just be a little bit of hope somewhere. That's why I haven't packed yet.
LOTHIAN: That hope isn't being placed on any of the presidential candidates. This is a problem Bugarin doesn't think any of them can fix.
BUGARIN: No matter what kind of president we get, I think there's going to be a while for, you know, the turnaround to happen. I mean, we're so down.
LOTHIAN: Caneda, the real estate agent feels the same way and for her it's just as personal. While she was busy trying to sell homes in a difficult market, she lost her own. This one.
CANEDA: I got behind in the payments due to the real estate had really slowed down. My income had really declined.
LOTHIAN: The bank is selling her former home, as she and others like her wait to see if Washington can help fix the mortgage mess. And if motivated buyers will again return.
Dan Lothian, CNN.
(END VIDEOTAPE)
HARRIS: You know, before we leave you tonight, we want to thank you all for the questions that you e-mailed us about the mortgage crisis throughout the day. We have two experts on hand to answer just a couple more.
Sue Hunt with Consumer Credit Counseling Services and Clyde Anderson, author, credit consultant and mortgage advisor. We have time guys for just a couple more. Laura from Ohio writes, "Is price dependent on what's inside and outside the condo instead of just square footage? Second, is there any way to negotiate three percent or six percent standard fees?" What do you think? Who wants to take this one?
HUNT: That's a tough one because it has to do with what the marketplace in your area bears. So really, with real estate, it's still location, location, location. How much a condo is worth certainly has to do with where it is, what kind of a facility it is on the outside, and also what amenities you have on the inside.
So you just have to shop your market really carefully and find out what a competitive rate is and make a good offer. The second part of Laura's question addresses negotiating fees. And again, that's going to depend on your marketplace. I'm going to have to circle back to what we talked about earlier, which is good pre-purchase counseling. Learn about the process before you start to make these decisions. Go into that kind of a seminar, can help you identify neighborhoods that are good for you to live in and give you some idea of what kind of negotiating you can do, not only with your realtor but also in the banking situation with home inspectors and all of those people that help you make a home purchase.
HARRIS: That's good, Sue. Clyde, anything on that? Or shall we take the next and last question?
ANDERSON: I think we can go ahead to the next question.
HARRIS: And finally, a question from a different Laura that probably is on a lot of people's minds right now - "If the mortgage company forgives a loan or accepts a one-time lower payoff, does this affect my credit negatively?" Clyde, you want to start with this one?
ANDERSON: Sure. I think it goes back to the short sale we were speaking of. Pretty much, they're agreeing to take less money so that part is not going to affect their credit negatively. You're just want to make sure it's erased from your credit report. The thing that will affect them is the fact they've been late up until that point. The late mortgage payments is the thing that has the most weight on your credit report. That's what's going to drastically hurt the situation. The fact they're getting out of the situation is great and the bank is erasing it. And you want to make sure it's gone but they've already really done the damage to the credit with the late mortgage payments.
HARRIS: Sue, I certainly want to give you an opportunity to weigh in on this one.
HUNT: Well, I would say, again, that Clyde's exactly right, that the damage has been done to their credit report by those late mortgage payments. What we tell people is, that selling the house and even taking a short sale is an opportunity for them to start over again. The good news about the American housing industry is that within 12 to 18 months from those negative payments you can start looking again for a home. You can start monitoring your credit and you can start looking at getting another house. The second time around, it may be more affordable and something that is going to work for you in the longer term.
HARRIS: That's great. Sue Hunt, Clyde Anderson, boy, thank you both for your time this evening. And how about the questions? Great questions from all of you at home. Thank you both. We appreciate it. Great information.
And coming up here in the NEWSROOM we'll run down the day's top stories, including the biggest beef recall in U.S. history. You're in the CNN NEWSROOM.
(COMMERCIAL BREAK)
HARRIS: OK. Welcome back, everyone, to the CNN NEWSROOM.
I'm Tony Harris. Here it is what is happening. It is the biggest beef recall in U.S. history. More than 140 million pounds of frozen beef declared unfit for human consumption by the Agriculture Department. The move was announced today in the wake of animal cruelty charges against two former employees of the Westland Hallmark Meat Company of Chino, California. The feds suspended operations at a slaughter house after undercover video showed crippled and sick animals being shoved with pitchforks.
Senator Barack Obama hopes his former Democratic rival will support his presidential bid. John Edwards met with Obama today in Chapel Hill, North Carolina. A couple of weeks earlier, Edwards met with Senator Hillary Clinton. No word yet on which of his former rivals Edwards may support. Some of his advisor say he shouldn't endorse either one.
Steven Kazmierczak, his girlfriend speaks to CNN, Jessica Baty. And the Northern Illinois University shooter and she had been together for two years. She sent with us the sentimental good-bye note her boyfriend left her before the shooting spree and that his violence surprised her as much as anyone.
(BEGIN VIDEO CLIP)
JESSICA BATY, KAZMIERCZAK'S GIRFLRIEND: The person that I knew was not the one that walked into Cole Hall and did that. I mean, that wasn't the Steve I knew. He was anything but a monster. He was probably the nicest, most caring person ever.
(END VIDEO CLIP)
HARRIS: Steven Kazmierczak killed five people in a university lecture hall Thursday. He then committed suicide. Seven people wounded in the shooting are still in the hospital.
It is one of the worst single acts of violence since the fall of the Taliban. It happened in Kandahar, southern Afghanistan, a huge crowd watching a dogfight, when a suicide bomber detonated himself. As many as 80 people reportedly dead, about the same number wounded. A prominent anti-Taliban militia commander is among the dead. Some officials think he may have been the target.
Kosovo's parliament has made good on its promise to declare independence from Serbia. This was the scene earlier in Pristina. Some residents say they've waited 10 long years for today. In Serbia's capital, protests against Kosovo's independence. Serbian officials call the declaration illegal and promised to hold onto the province. The United States supports Kosovo's move to become independent.
Let's get one more check on weather with Jacqui Jeras in the severe weather center. And Jacqui, plenty of news in your world this evening.
(WEATHER REPORT)
HARRIS: A bit of good news there. Jacqui, appreciate it. Thank you.
Politics is serious business, but even politicians have a lighter side. Josh Levs has some of the funnier moments of this campaign season.
(BEGIN VIDEOTAPE)
JOSH LEVS, CNN CORRESPONDENT (voice-over): You think you know the candidates? You may be surprised.
UNIDENTIFIED MALE: Hillary takes the stage. The crowd went nuts.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.voxantshop.com
