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President Bush Touches on Housing and the Economy; Government's Efforts to Help Homeowners: Will They Work?; Protecting Yourself Against Mortgage Fraud

Aired February 28, 2008 - 12:00   ET


DON LEMON, CNN ANCHOR: Hello everyone. I'm Don Lemon, live at the CNN World Headquarters in Atlanta.
Up next, CNN FINANCIAL SECURITY WATCH. But first, a look at the stories that are making news this hours.

Presidential politics, John McCain picking up another endorsement today. Former Secretary of State and White House Chief of Staff James Baker said to throw his support behind McCain, another indication of Republicans closing ranks around the nominee to be.

Now to who's not running. New York Mayor Michael Bloomberg says count him out. In a "New York Times" editorial said that Bloomberg says he won't launch a campaign for the white house.

A prominent superdelegate switches his support from Hillary Clinton to Barack Obama. Congressman and civil rights leader John Lewis says he's following the will of his constituents who said that Obama is representing a new movement in American politics. Obama what's come campaigning in Texas today says he's honored to have Lewis' support. The about face by Lewis comes at a critical time for Clinton. She's trying to rebound from 11 straight losses to Obama. Clinton is campaigning in Ohio today.

A missile strike dead on. Pakistan media reports eight suspected militants killed and three wounded. The strike hit a house where the suspects had gathered in South Waziristan. That's a rugged mountainous region in Pakistan near its border with Afghanistan. Intelligence officials believe the area is a safe haven for al Qaeda and Taliban militants. It's not clear who fired the rocket. Local tribesmen say it came from an undisclosed location.


I'm Don Lemon.


All week during this hour, we're focusing on what really matters to you and your money. Your house, your debt, your savings and your job. Now is the time to get your finances under control. Over the next hour, we'll give you the tools, the tips and the strategies that will help you make sense of your money. Best of all, call in and we'll answer your questions live right here. CNN's FINANCIAL SECURITY WATCH starts right now.

The focus of your financial security this morning, Washington, D.C., yet another sign the economy is not doing well. Unemployment claims jumped by 17,000 last week, significantly higher than the labor department expected and Financial Reserve Chairman Ben Bernanke is spending day two on Capitol Hill today meeting with the Senate Banking, Housing and Urban Affairs committee and again warning about rising inflation.

This as President Bush held a news conference this morning where, among other things, he touched on housing and the economy.

CNN's Elaine Quijano is live at the White House with more -- Elaine?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Good afternoon to you, Gerri. Yes, with all of that bad economic news in mind, President Bush tried today to forcefully push back against the notion that the economy is heading for a recession.

The president did not announce any new initiatives during his news conference, but instead tried to ease people's concerns by talking about what Washington has done so far.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I don't think we're headed into a recession. But no question we're in a slowdown. That's why we acted strongly with over $150 billion worth of pro growth economic incentives. Mainly with the money going into the hands of our consumers and some money going to invest in businesses that will create jobs.


QUIJANO: Now against the backdrop of housing foreclosures, members of Congress here in Washington are looking to address the issue with various legislative proposals, the president did say he is against any kind of bailout for a mortgage lender. The president also said he does not think that another economic stimulus package is needed right now. He said let's give stimulus package one a chance to kick in.

Now, it's important to note even some Republicans are doubtful, skeptical that that $150 billion plus economic stimulus deal is going to have any effect. One Republican liken it to pouring a cup of water into the ocean.

Right now, the president's meeting with key members of his economic team at the labor department. The message there, very much the same. The president wants to ease people's concerns because looming of course over all of this, Gerri, it is the general election. This is a president who understands that how people feel about the economy is very much going to affect how they vote -- Gerri?

WILLIS: Elaine, thank you for that report.

We had Senator Chris Dodd on the program yesterday to talk about the government's efforts to struggling homeowners. Many of them have been very critical of programs like Project Lifeline. One of those people, Bruce Marks from NACA, that's the Neighborhood Assistance Corporation of America, joins us now from Boston.

Bruce, great to see you.

BRUCE MARKS, FOUNDER & CEO, NACA: Good to see you, Gerri.

WILLIS: We talked to Senator Dodd about the program he wants to put in place which would be an agency to essentially buy poorly performing loans from banks. What do you make of it? Are you a fan?

MARKS: No, I'm not. This is where the Bank of America Credit Suisse bail-out collusion. What they're saying is they want to take the loans that these lenders that created the problems, the lenders who profited from the problem and they want to put it on the backs of the taxpayers because they want the taxpayers to take the responsibility between what is the existing mortgage amount and the appraised value and make the taxpayer responsible for that. The solution needs to be to require the lenders to take the loans and to restructure them to reduce the rate to what the homeowner can afford.

WILLIS: I have to give you a little push back on this. You think Dodd's idea is a bad one, but isn't the problem so severe at this point that you have to do lots of loans at the same time instead of just doing a single loan at the same time. Will we ever get through the backlog of loans that we have without an ongoing collusion?

MARKS: The government should require any servicer before they refer a loan to foreclosure to require the servicer to go and to say, they made the best case effort, the best faith effort to permanently reduce the interest rate to that payment that the homeowner can afford and that's where it should be. We need aggressor government regulation, not a taxpayer bail-out for the lender. But the question is, at what price do you buy it from these investors?

WILLIS: All right, you talked a lot about bail-outs for the government. You know, there's a proposal in Washington right now to allow bankruptcy judges to simply forgive some of the mortgage debt for some of the folks that are struggling in foreclosure and then in bankruptcy. It's highly controversial, the banks don't like it at all. You're a fan of this, correct?

MARKS: Absolutely, because on one hand you have Senator Dodd pushing the Bank of America bail-out. And then you have these banks saying they don't want to give the discretion to these judges who are not your liberal activist judges, but the discretion to the judges to make that mortgage affordable. Those judges can do it on investment properties, on any loan on a yacht.

So, they can do it for wealthy people. Why not give the judges discretion for working people who live in that home but can't afford the mortgages because these mortgages were structured to fail.

WILLIS: I just want to mention here that we keep mentioning Bank of America, this is a bail-out for them. This is a company that bought Countrywide. I just want to mention, we asked them to participate in this conversation and they declined to.

But let me get you on to a couple of different things now. I know you feel passionately about this, and we do too. We have been following this very closely. Ultimately what is the best way to solve this problem? How do you solve this problem without essentially bailing out some of the banks?

MARKS: Well, you know, it's very straight forward because, you know, we have this agreement, NACA has this agreement with Countrywide which is going to be assumed by Bank of America. The fact of the matter is, there's a really easy solution. These servicers need to say, they need to look at all the borrowers and this is what they do on mass anyway. They need to look at the net income, what is the monthly liability, what are the monthly expenses and they need to be able to determine a mortgage payment they can afford.

This is what they should have done on day one when they originated the loan because the loans out there, Gerri, are loans that are structured to fail. And just yesterday in Massachusetts, the judge ruled that Freemont Financial, one of the worst predatory lenders cannot foreclose on a home in Massachusetts without the judge authorizing that because they said they're structured to fail.

WILLIS: Bruce, I'm going to have to leave it here. We could go on all day, I know you have a lot to say and we really appreciate your being here with us. Thank you for your thoughts and your opinions, it's great to hear from you.

So we know how Bruce Marks feels about the mortgage meltdown and who's to blame but how do you feel? We get a chance for you to weigh in. Let's go over to Poppy Harlow for today's quick vote question.

Hi there, Poppy.


As you well know, you can't turn on the news or open up a newspaper without hearing or reading about the mortgage meltdown, the housing crisis and the ensuing credit crunch. We have seen big lenders like Country Wide Financial under pressure. And more and more Americans are defaulting on their loans. It's something we have covered extensively on We run stories on it everyday because it affects millions of Americans, Gerri.

WILLIS: To today's Quick Vote question Poppy, what can viewers vote on today?

HARLOW: Well here it is. Who is to blame for the mortgage meltdown. Lenders, borrowers or the government? We'll be back later in the show for the answer.

WILLIS: You know people feel passionately about that, Poppy. That's going to be a great poll.

HARLOW: We'll be back later and tell you what people had to say.

WILLIS: We're here to help answer your questions about money. Give us a call, 866-792-3399. Or you can also e-mail us, we're getting a ton of e-mail,

We're going to get to your phone calls a little later in the show and everyone we put on the program will receive a copy of my book. It's called "Home Rich." You're seeing it right there.

Coming up on CNN FINANCIAL SECURITY WATCH, two very different sides of the mortgage meltdown, how to avoid foreclosure fraud and how to get into foreclosure investing. But first, here's today's reality check.

The FBI opened over 1,200 new mortgage fraud cases in 2007, nearly triple what it did in 2003. With mortgage fraud on the rise, it's important to protect yourself and your home. If a deal sounds too good to be true, it probably is. Steer clear. Fraudsters prey on people who are already at risk of losing their homes to foreclosure.

If a buyer approaches you with promises to pay off your mortgage or give you a sum of money when the property is sold, it's likely a scam. Commonly called equity scammers, these fraudsters also sell your home and keep the equity you could have had when you sell your home.

Property flipping is another common scam. Fraudulent appraisals and doctored loan documentation allow the new buyer to buy the home at an inflated price. Be sure to choose a broker wisely. A seasoned broker should be able to help you detect fraud and protect your home.


WILLIS: We have talked a lot on this program and on "OPEN HOUSE" about mortgage fraud. You also need to pay attention to another rapidly growing problem in the country, foreclosure fraud. Ann Fulmer is with Interthinx, a fraud detection service and she's here with me now.

Ann, great to see you again.

ANN FULMER, INTERTHINX: Nice to be back. Gerri, thanks.

WILLIS: I think when people are afraid to go into foreclosure, they panic. Sometimes they make mistakes. What should you be doing and what should you be avoiding?

FULMER: Well the first thing you should be doing is talking with your lender, with your servicers because the foreclosure crisis is such a huge problem is that there's a lot of effort underway to change loan terms, whatever, because it's a lose-lose situation for everybody. You should be aware of people who are making unsolicited offers for help. The problem with that is that foreclosure medicines have to be published and as soon as that comes out the vultures start to circle.

WILLIS: And you get those letters in the mail from all kinds of folks you've never heard of.

FULMER: And the problem with that is foreclosures have to be published.

WILLIS: Exactly. That's a very scary thing. When you're talking about foreclosure fraud, you're not talking about one kind of crime, you're talking about lots of kinds of crime. You're talking about three potential frauds I might see.

FULMER: The top three I think is they say pay me $1,000, $1,50 $1,500, $3,000 and I will help you get out of your note. They take the money and they disappear.

WILLIS: You should do that yourself?

FULMER: Another one is a bait and switch. They say, I'll help you refinance your house, they say sign, sign, sign and don't read it. And it turns out you have actually sold your house. You need to understand what you're sighing and you do not want to be signing blank documents that's another technique they get you.

And the third thing is a credit repair scheme rolled in with a foreclosure your scheme. They'll offer to sell your house to them, they'll rent it back to you for a year so you can repair your credit and then they'll sell it back to you.

WILLIS: But you lose your house, right?

FULMER: You can't make the rental payment because it's too high, and they foreclose and next thing you know you're a victim.

WILLIS: That's scary stuff. If you're worried today that you're a victim that maybe you've done something you shouldn't have, you've done business with something you shouldn't have, what do you do?

FULMER: Report it to the police. If you have been scammed out of your house, report it to your local FBI office. You definitely want to talk to your lender.

WILLIS: Talk you your lender, talk to your lender.

OK. Now you know how to avoid foreclose area fraud. A high rate of foreclosed homes like we have right now actually gives some people the opportunity to buy a home when they couldn't do so before. But if you want to play this game, you have to know the rules. Dani Babb is the author of "Finding Foreclosures." She's in Irvine, California.

Dani, great to see you again.


WILLIS: I think what's interesting is that some folks, the vultures that come out. Some people who buy foreclosures are actually dealing with people who are being foreclosed on. What do you have to say to people who want to buy and to people who are about to be kicked out?

BABB: There are also if you're looking to buy a foreclosure, there are scams out there for you as well that you need to watch out for. Like people trying to pool your money, put $1,000 into a pot and we'll buy a foreclosure for all of you and then split the equity.

If you're looking to buy a home, you should first after all understand that the person that's losing their home, it's a very emotional time. You don't want to come in there and act like one of those vultures and be honest with people.

You're not saving the day for them. You're helping them out of a bad situation. They're helping you get a home. Try to find a win- win, but you have to keep their bank in the loop. If the bank doesn't approve the deal, it doesn't matter.

WILLIS: You can buy foreclosures in a lot of ways. You don't have to buy it from the individual who's being foreclosed on, you can buy it from a bank, from an auction. What's the best way?

BABB: Pre-foreclosure is the best way to go. That's when you can save the homeowner from having a foreclosure on their record. It's also when you can get the best deal. A real estate owned home, or a bank-owned home, you see it listed as an REO, you deal directly with the bank. The bank is represented by an agent. So you're working with that agent.

If you're working with an agent as a buyer and seller, some of that negotiation can come back to you. Generally speaking, you're looking at anywhere from ten to 15 percent. Options people don't understand that these auction houses take a premium and the minimum bid is not a real minimum bid. The bank can reject it or the owner can reject it.

My co-author did a study and that people are only getting between two percent and five percent at an auction.

WILLIS: I know you're a fan of buying directly from the homeowner which can be very emotionally trying for a lot of people out there.

Let's talk about another aspect of this all together which is where to buy the foreclosures. A lot of people see this as an opportunity to buy a second home, a vacation home in some of the markets where foreclosures have been so high. Where is the best place to go, Dani?

BABB: In my opinion, the best place to go are locations where the markets been hit hard, but there's reason to believe that economic prosperity will follow. That will mean that there's good jobs are coming. So the areas that I like are Seattle, Washington, I like Palm Beach and Tampa, Florida.

Believe it or not, I like Las Vegas because it has a lot of job growth. I like some areas of southern California, Orange County and L.A. County. And not widely discussed, I like central Texas, the Austin and Round Rock areas and I love North and South Carolina. They have been battered.

WILLIS: OK, Dani. Great lists of homes and places to buy and we really appreciate your help today. Thanks so much for your time.

BABB: Anytime, thanks.

WILLIS: The credit crunch is hurting so many of you out there. Up next, meet one woman in Washington who's taking on the credit card companies, she's saying no more.

Plus the pulse of American shoppers. We have Rick Sanchez life on the case when CNN's FINANCIAL SECURITY WATCH comes right back.


WILLIS: Let's go to Don Lemon right now with news about a member of the royal family.

LEMON: Yes, Gerri, it's some breaking news and it's coming out of Afghanistan and also London, we are hearing that Britain's Prince Harry has been secretly serving in Afghanistan. Now here's according to the report here. He is on a four-month tour of duty. He has been there fighting on the front lines since December. This new information emerging today.

Of course there's concern about the safety of Prince Harry as well as those who may be fighting with him. So it's been a bit of a media blackout for a while to keep those around him safe. But the news emerging today that Prince Harry is serving on the front lines of Afghanistan, he is in the middle of a three to four-month tour of duty.

We also have other developing news this time out of Washington, D.C. The president speaking about the economy. We have heard so much about the economy. In fact, Gerri, has been talking about the economy a lot.

The Labor Department today also making some news and the president speaking at the White House just moments ago met with economic advisors and we'll bring you those comments in a bit, either at the top of the hour or during your broadcast, Gerri, but Prince Harry serving in Afghanistan and the president making comments about the economy.

WILLIS: Don, thank you for that.

Congresswoman Carolyn Maloney has introduced a bill to crack down on the credit card companies and what she calls unfair practices. This as credit card delinquencies are on the rise. Congresswoman Maloney joins us now from Capitol Hill.

Good to see you.

REP. CAROLYN MALONEY (D), NEW YORK: Good to see you, Gerri.

WILLIS: I want you to lay out these unfair practices because a lot of people don't even realize what they're paying.

MALONEY: Credit cards work best when card holders understand the terms and the rates and the interest on their loan on their credit card credit. And what is happening is that many credit card companies are raising rates and interest rates any time, any reason without notice. What my bill basically does is informs consumers when they are going to raise rates and lets them make a decision whether or not they want to opt into that rate or go to another card and it allows them to pay off their loan at the existing rate.

WILLIS: OK. Well, that's good news.

MALONEY: And does away with these gimmicks and gotcha schemes where they keep changing the due date. It's very open and fair and Chairman Bernanke testified before Congress yesterday that credit -- that credit cards, that you needed more to stop unfair abuses than just plain notice which he is working on coming forward with guidelines on.

WILLIS: Now I understand that when you put this bill together, you actually sat down with some of the credit card companies. So this is something, a compromise to begin with, right?

MALONEY: Well, it's a fair -- we came up with a bill of rights, principles that would be fair to the economy, to card companies and to card holders. It does not include price limits or control the price in any way. It allows the card companies to follow their business model, but they have to inform the consumer and not change in the middle of the contract.

WILLIS: Carolyn, I'm going to have to wrap you right here.

Let's listen into the president speaking moments ago at the labor department.


BUSH: I want to thank madam secretary for attending this meeting with my economic team. I just had a briefing on what has become very obvious to the American people that we are in a period of slowness and it's also a period of uncertainty.

We're optimistic about the long-term economic future of the country. But right now, a lot of Americans are facing uncertain times. And we're acting on it. I want to thank the members of Congress for quickly passing an economic growth package. And that means that there will be $150 billion or more sent out to American consumers and incentives to American businesses to invest.

The secretary of briefed us, Secretary Paulson that we anticipate that the checks will start being sent the second week of May. And that's going to be very positive news for our consumers. And it's a part of our active plan to help deal with these uncertain times. One way Congress, if they really want to make a substantial difference in creating certainty during uncertain times is to make the tax cuts we passed term innocent. See, if you're somebody worried about $3 gasoline and you think your taxes may be going up in two years, then the uncertain price of gasoline makes it more uncertain for you as you plan for the future.

And Congress needs to make these tax cuts permanent. We need to think about the American come assumer and the American family and the American small business owner during this time of difficulty and make the tax cuts permanent. Send a clear signal to the American people.

Secondly, obviously the housing issue is one we're deeply concerned about. We want people to be able to stay in their homes. If we don't support legislation that will reward lenders, that will bail out lenders and we don't support legislation that will cause interest rates to go, like the legislation in the Senate.

What we do support is an aggressive plan led by Secretary Paulson and Secretary Jackson to help people stay in their homes. To help them refinance their mortgages. To help them make a financial adjustment necessary that to help us through this difficult period of time. So I want to thank you all for your briefing.

I appreciate your concern about our fellow citizens. We share concerns about it. We want them doing well. And we believe that in the long-term we're going to do just fine. It's a resilient economy.

We've got good, hard working people in America. The entrepreneurial spirit is strong. And we'll make it through this period, just like we made it through other periods of uncertainty during my presidency. And each time we came out stronger and better. That's what's going to happen this time too. Thank you.


WILLIS: That was the president making comments after a cabinet meeting at the Labor Department. He's asking Congress to extend his tax cuts and also telling folks that they'll get that tax refund in the second week of May.

Now if you really want to gauge how folks out there are faring, try heading to the grocery store. Prices fluctuating up and down reflecting the state of the economy and ultimately your money. So we sent CNN's Rick Sanchez to the grocery store to feel the pulse of shopping Americans.

Hey there, Rick.

Sorry about that. We're having some technical difficulties. But coming up, pick up your phone, give us a call at 866-792-3399. Let us help you find answers to your money problems. And we'll check back in with Rick Sanchez as he feels the pulse of American shoppers.

CNN's FINANCIAL SECURITY WATCH rolls on after your latest headlines. (COMMERCIAL BREAK)

WILLIS: All right, let's try this again. Let's go back to CNN's Rick Sanchez at a grocery store where shoppers are feeling the pulse of shopping Americas.

Rick, hi there. Can you hear me this time?


I think you can hear me. I can't hear you but we're going to be do this for you because what we've been doing all week long is going out and trying to talk to people.

You know, we talked to some of the folks yesterday who had to carry some of the merchandise, the truckers, who say, look, it's costing us $1,000 to try and fill up our rigs to get groceries from one place to another before it gets to the grocery store. So today we said, well let's go to the grocery store and find out how people are being affected by it here.

Now according to the Consumer Price Index, OK, big number, it means -- it's saying that it's going to be about four percent more this year to take your -- as far as increases go in your groceries. So that means if you spend like $200 a week, it's going to cost you about $400 more this year to buy your groceries.

I'm talking here to Justin and Maria and Fay. Have you started to see the increase already as you buy your groceries here at Whole Foods outside Atlanta?




SANCHEZ: You haven't seen the impact?

UNIDENTIFIED FEMALE: No, I didn't see the impact yet.

SANCHEZ: How about you?

UNIDENTIFIED FEMALE: No, not here yet.

SANCHEZ: No. How about you?

UNIDENTIFIED MALE: Maybe some, but I can't really tell for sure.

SANCHEZ: How much do you guys spend? How much do you spend when you go . . .

UNIDENTIFIED FEMALE: I have a budget of $162 a month for groceries. I'm a single person.

SANCHEZ: Single person. So you don't -- it's not like you have a family of four and you have to go out and spend for all of them.


SANCHEZ: How about you, Maria?

UNIDENTIFIED FEMALE: It's about $300 a month.

SANCHEZ: So you're spending about $300 a month?

UNIDENTIFIED FEMALE: Yes. And I'm the only one.

SANCHEZ: If you were spending $300 last year, are you spending $300 this year as well?

UNIDENTIFIED FEMALE: Yes, but I'm getting less than . . .

SANCHEZ: You are?

UNIDENTIFIED FEMALE: Yes. So then I'm getting affected.

SANCHEZ: So you are seeing the prices go up?

UNIDENTIFIED FEMALE: Yes. I guess I'd say, yes.

SANCHEZ: Because over the last year or two they've probably gone up between 2.5 percent and three percent, according to the government and, you know, and the Consumer Price Index.

How about you, Justin? What have you seen?

UNIDENTIFIED MALE: I would say that I spend about maybe $50 more a week than I typically would normally. But I really, I don't know, I think it's more so because I just got out of college and I'm back here in Atlanta.

SANCHEZ: So you're seeing it now? Well, thanks guys so much for joining us.

By the way, you ready, here's some grocery tips for you. Sign up for all customer loyalty programs. Coupons are your friend, Gerri. Make a grocery list. Never go shopping with your kids. Don't buy non-grocery items at a grocery store. And, ready, maybe the most important tip for you, Gerri, never grocery shop hungry. Back to you.

WILLIS: Rick, thank you for that. Great reporting.

Let's go back to Don Lemon now with more on the Prince Harry news.

LEMON: Yes, and lots of breaking news today in your show, Gerri.

We have some breaking news, as Gerri said. It's coming from London, but really out of Afghanistan. We're talking about Prince Harry of Whales. The young prince has been fighting, we are told, since December in Afghanistan on the front lines there. Let's go now to Paula Newton. She is covering this story for us from our international perspective live in London for us.

Hi, Paula.


An extraordinary afternoon here in London. We did have a Web site that broke the embargo, a news embargo, that CNN participated in. They told us that for the safety of Prince Harry and for the safety of those soldiers around him, that they did not want us to report that Prince Harry has been on the front line, as you said, since December, fighting the Taliban. We have seen the video of him actually taking on the Taliban.

What is extraordinary is that they've been able to keep it secret for so long. He's been doing his job as best he can and just really acting like a regular soldier. But a lot of the different things he says and a lot of the video you're going to see is just extraordinary here. Don, let's take a look now.


NEWTON (voice over): He has been dreaming of it for years. It's been rumored for months. Now, finally, Prince Harry is a front-line soldier serving in Afghanistan.

PRINCE HARRY, PRINCE OF WHALES: All my wishes have come true. Managed to get the job done.

NEWTON: Getting him here was a top secret operation, deploying a member of the royal family to Taliban country, a measured risk.

Prince Harry's fellow soldiers were sworn to secrecy, but now the secret is out and the pressure is on. British forces continue to endure intense firefights and ambushes with the Taliban, as did Harry on this day in south Helmand province.

UNIDENTIFIED MALE: This is the most dangerous place you can get in south Helmand.

UNIDENTIFIED MALE: Is it a safe place for a prince?

UNIDENTIFIED MALE: No, not really.

NEWTON: Still, the deployment is a savor victory for the prince who has said he would quit the army if he was held back from serving in war. But for months, that's exactly what happened as his fellow soldiers were sent to Iraq without him last summer. Prince Harry had been assured he would go too, but his commanders backtracked saying he was too much of a target for insurgents.

UNIDENTIFIED MALE: There have been a number of specific threats, some reported, some not reported, which relate directly to Prince Harry as an individual. These threats exposed not only him, but also those around him.

NEWTON: It's thought the risks of that isn't quite as high in Afghanistan. There are more bases, more soldiers, a better chance of keeping him under Taliban radar.

PRINCE HARRY: I think now that I've come out here, I think its proved the point that, if it's done the right way and kept quiet in certain areas, then it can be done. And as far as I'm concerned, I'm out here as a normal JTAC on the ground and not Prince Harry.

NEWTON: JTAC or joint tactical air control, is Prince Harry's main role here. The prince holds the lowest officer rank, known as Cornet Whales (ph), as he is tasked with the job of being a forward air controller. He has to call in air strikes and air support when necessary, guaranteeing the accuracy of bombing on the ground, guarding against incidents of friendly fire in the air.

PRINCE HARRY: You've got jets firing all over the place and you're trying to control them while looking at the screen, while trying to, you know, show a presence of force with the jets to get the enemy to go to cover. And so it's to keep your guys in one place and keep safe basically.

NEWTON: But keeping the prince safe is still a problem. He knows he's a marked man. His fellow soldiers call him the bullet magnet. The Taliban has him in its sites, eager to use even a close call against him as a propaganda coup like no other.

Still, if he stays safe, this could be a redeeming mission for the prince, after building a reputation as "Dirty Harry," the party prince, he will finally get the experience he's been training for and just maybe the respect he's been craving.

PRINCE HARRY: No, I don't miss booze, if that's the next question. It's very nice just be here and be with all the guys and just sort of, you know, mucking in as one of the lads.

During the day I like to sort of, as you know, as I keep going about, it's very nice to be sort of a normal person. For once, I think this is about as normal as I'm ever going to get.

NEWTON: For a boy who had far from a normal childhood, this front line role may yet allow him a common experience with other British soldiers and the knowledge that he's risked his life for his country.


NEWTON: And I can certainly tell you he has risked his life. He has been serving, like any other soldier. What is going on right now, Don, I can tell you, is high level meetings here at the ministry of defense to decide whether to put him on the plane back home. They know the minute the Taliban learns of this, and I'm sure they already have, he is going to be quite a major target.

LEMON: Yes. And, Paula, you answered my question I was going to ask you, are they going to get him out of there because -- and I guess that is the next part of this story, what happens now if he has to leave Afghanistan because he's putting himself and those around him at a danger. Thank you, Paula.

We're going to follow this story at the top of the hour. Now we're going to go back to Gerri Willis, who's doing our SECURITY WATCH program. We'll be following this at the top of the hour in about 15 minutes right here in the CNN NEWSROOM.

Gerri, back to you.

WILLIS: Thank you, Don.

Up next, it's your turn. Your phone calls, your e-mails. The number, 866-792-3399. The e-mail address, Don't be shy.



WILLIS: CNN's FINANCIAL SECURITY WATCH is all about you and your money, so we want to turn the show over to you. Let's get straight to your e-mails and your phone calls. Here's our panel, Jack Otter, deputy editor of "Best Life" magazine, Janet Bodnar, she is deputy editor of Kiplinger's Personal Finance, and David Bach, founder of

Great to see all of you.




WILLIS: And let's start with our first caller, Dan in Wisconsin --Dan?

CALLER: About a year, year and a half ago, I lost my . . .

WILLIS: Dan, can you hear me? I'm not hearing Dan, so I am going to go to the e-mail. Joe. I'm going to read Joe's e-mail here and then we'll get our panel on. And he's from South Carolina. He asks, "is it a good idea to buy a house with cash in today's market?"

David Back, why don't you jump in here and answer that question.

BACH: Well, Gerri, cash is always king. We know that. So the real secret to buying a home is, how much cash are you putting down? If you want to be conservative, and I think conservative is a really good way to go in this market, I would recommend you put 25 percent down on a home purchase.

But if you've got more cash to put down right now and you can afford to do it, put more down. The good news right now for first- time home buyers and really invests is that you can still get financing and the rates have come down. So for your friend who's got some cash, use that cash, that way you've got less debt, less risk. And my recommendation is lock in these rates right now because ratings are low. Take that 30 year fixed.

WILLIS: Rates are low. But, you know, another thing you might want to think about, prices could go down lower. I would do a really serious survey of prices in my area before I put my cash down now because you could see those prices go down further.

Let's go down to the next e-mail. It's Jane at George Washington University. She's a college student. She says, "I'm about to graduate this May. Like many college students, I have financial aid loan to pay off. What would you say are the top three tips that I should know about my finances upon graduation."

Hey, Janet, I think this is a great question for you.

BODNAR: Well, the first thing you need to do is remember to pay off those loans. What a lot of student borrowers do is, they think they don't take loans seriously, but this is really going to go towards building your credit rating. So it's really important to keep on top of the loans.

And if you're having trouble, if you have a problem, say if you're unemployed for a while, you're having some financial hardships and you can't make the payments, get in touch, especially if you have Stafford student loans, which are the government guaranteed loans. There are very liberal programs, repayment programs, that you can take advantage of if you're having any financial problems at all.

So if that's the case, don't fall behind on your payments. Don't let the loans default. Get some help in repaying the loans and reworking the payments, but make those payments currently so that you can build your credit rating.

WILLIS: Great ideas, Janet, appreciate that.

Up next, more of your phone calls and e-mails. Stick around. We want to get to those. And for on your finances, check out special report. It's called "Right on the Money." Get tips on how to better manage and invest your money with video tutorials and interactive guides. You can also read or share I-Reports with others. That and a lot more at


WILLIS: Welcome back to CNN's FINANCIAL SECURITY WATCH. Let's get right back to your phone calls and e-mails with Jack Otter, Janet Bodner and David Bock.

Let's get that first phone caller in.

Dan in Wisconsin, go right ahead.

CALLER: Yes. Hi, Gerri.

WILLIS: Hey there. What's your question? CALLER: OK. My question is, about a year and a half ago I was foreclosed on due to a medical condition. I now have, you know, approximately $20,000 to reinvest into a home. You know, is this a good time now to get back into the market and purchase a new house?

WILLIS: OK. Dan, thank you for that question.

Jack, I want you to jump in here? Is now a good time to invest? And what about if you have the further complication of, you know, having gone into foreclosure not so long ago?

OTTER: Sure. Two answers to that question. First of all, right now is a much better time to be a buyer of a home than a seller. So in that sense, I think Dan's got the upper hand. He can negotiate hard on getting a good price.

The big issue here though is what sort of interest rate is he going to be paying on a mortgage. Having just been foreclosed on, he might not be in a great position there. And if he's to far above the 6.2 percent, 6.3 percent average right now, frankly I'd hold off.

I'd be a renter. Rental rates are coming down. They're certainly not going up. So I might work to build up my credit rating, build up my FICO score. I'd use a credit card conservatively. Take all those steps and then get back into the market in a year or so and keep on telling the banks, look, as soon as you can give me the going rate on a mortgage, the going prime rate, then that's your time to get back in the market.

WILLIS: Yes, that's going to be a tough thing to do, obviously, for a lot of people out there is getting the very best rate possible.

Let's move on to another e-mail question. Let's take Edmond from Pennsylvania. He writes in, "yesterday it took all of one minute to call my credit card company to reduce my APR from 12.9 to 7.9 percent."

Now, I've got to tell you, this is a good news story out there. We were telling people just in yesterday's show that it's very easy to reduce your credit card rate by just calling the customer service number.

Now, Dave Bach, I know you're a big fan of this, too. Anything else you'd suggest to someone who's struggling with that credit card debt right now?

BACH: Well, Gerri, you just said it. And that person's e-mail is the truth. You've got to pick up the phone and call your credit card company. The first thing you need to know is, what is your interest rate. And if your interest rate right now is over 16 percent or 17 percent, ask for a lower rate.

And the first person you talk to, if they say no, ask to speak to a supervisor. If they say no, call back or say you want to close your account. Because often when you say you want to close your account, they actually swing your call to a new call center who's job it is to keep your account.

You should be able to get your rates lower than 10 percent right now. And, in fact, if you call multiple calls, you can often get your rate -- that same guy might be able to get his rate lowered in two or three weeks by just calling again. So make those phone calls. We know people who watch these shows, they don't all make the phone call. Make the phone call.

WILLIS: Yes, absolutely. Easy peasy as they say.

Let's go onto the next e-mail. E-mail number three from Diane. She says, "I'll be 62 in July. My home has decreased in value. Will I have any difficulty in getting a reverse mortgage? And is it a good idea?"

Janet, let's go to you. I'm a fan of reverse mortgages for people who haven't saved up a lot. What do you think?

BODNER: I think, in general, yes, reverse mortgages are probably a good idea. The thing -- especially if you need money, if you need to tap the equity from our home but you don't want to sell your home. The thing you need to be aware of are, sometimes these types of loans can be complicated. Sometimes they can also carry high fees.

And also, we're already starting to see a little bit of scammery around here where people will say to a person who wants to take out a reverse mortgage, well, we'll negotiation, we'll do the deal with you, but we'd also like to sell you these extra products that you might need or these extra services, which, again, you know, you don't need them and it's money that you don't need to spend. So I think that the idea of it is a good one and probably a lot of older people are going to be taking advantage of it. You've just got to be careful.

WILLIS: Janet, thank you for that. And thanks to all the panel, Jack, Janet and David, for being with us today.

Every caller we spoke to today will receive a copy of my new book called "Home Rich." For more on "Home Rich," log on to

And, hey, if you didn't get through today, make sure to e-mail us at or you can try calling in tomorrow. We want to hear from you.

Up next on CNN's FINANCIAL SECURITY WATCH, the results of our poll. Who is to blame -- this is the question, who is to blame in the mortgage meltdown -- lenders, borrowers, the government? Your answer coming up next.


WILLIS: It's time now to get the results of our Quick Vote poll. Back now to Poppy Harlow on the set.

Hey there, Poppy.

HARLOW: Hi, Gerri.

The results are in. Here's a look at what people think. Fifty- four percent think the lenders are to blame, 33 percent think it's the fault of the borrowers and 13 percent of people think it's the government to blame for allowing the situation to progress thus far in terms of who is to blame for the mortgage meltdown. So among the people that voted, the majority think it is the mortgage lenders that are to blame.

And I know you know this, Gerri, on March 7th, the CEOs of some of the largest mortgage lenders will face a congressional panel looking into their pay and severance packages during this whole subprime meltdown. We'll be back tomorrow with another question -- Gerri.

WILLIS: Poppy, thanks for that.

We want to thank you for joining us for CNN FINANCIAL SECURITY WATCH. We'll be back here tomorrow, same time, live at noon Eastern. More of your phone calls, more of your e-mails. We're going to be taking a closer look at the state of your money and how that ties into the race for the White House.

Time now for your latest headlines in the "CNN NEWSROOM," which starts right now.