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YOUR BOTTOM LINE

Hard Time Finding a Job? Problem Could Be Where You Live; Pursuing Your Passion Could Help You Achieve Your Career Dreams; Credit Cards' Hidden Perks; Foreclosures Are Still High: Buying, Selling, or Staying In a Home

Aired May 15, 2010 - 09:30   ET

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


STEPHANIE ELAM, CNN HOST: Having a hard time finding a job? Well, it turns out the problem may be where you live. We'll tell you where incomes are expected to go up and down.

Pursuing your passion will help you craft a plan to live out your career dreams. And think your credit card is just for charging stuff? Well, think again. We'll tell you what perks you didn't even know you had. The show that saves you money starts right now.

All righty, let's begin this morning with the number one investment that you have, your home. Foreclosure activity began to plateau in April, but at a very high level that will not drop off in the near future. That's according to RealtyTrac. Foreclosures were down nine percent with one in every 387 homes receiving a foreclosure filing.

So, if you're buying, selling or trying to stay in the home you've got, our next guest is here to give you the essentials for every step of the way. Ilyce Glink is a real estate expert and author of "Buy, Close, Move in!" and she joins us today from Chicago.

Ilyce, thanks so much for joining us. So, I think the big...

ILYCE GLINK, REAL ESTATE EXPERT: It's a pleasure.

ELAM: It's a big question that everyone has here is, is the housing market actually really starting to improve? What do you think?

GLINK: Well, I'd like to say it's starting to improve, but I think we've seen it kind of fake improve because we've just come off the home buyer tax credits which technically expired at the end of April 30. If you hadn't signed your contract by April 30, you're out of luck even though you have until June 30 to close. I think what that's done is just push forward a whole lot of demand and so we saw sort of a big burst of activity in March, we're going to see it in April. Not so sure what's going to happen this summer.

ELAM: Right, that's true. It does kind of take away some of the growth we were seeing for this year. Well, let's talk a bit about what the government has been doing, because the government has been criticized for not doing enough to help out unemployed and underwater homeowners? What do you think about the plans that they're putting into action now?

GLINK: You know, there are opportunities for people who are losing their jobs to put a moratorium on foreclosure I think it's for about six months. There are also extra incentives, financial incentives for lenders to help these homeowners to avoid foreclosure. None of the programs that the government has put into place so far to help people stave off foreclosure really worked.

We've seen over a million, maybe a million and a quarter people go into temporary loan modifications and yet just 200,000 of them have permanent loan modifications. So, when you look at what's working, what's not working, I'm not sure this program is going to solve it either. Very small.

ELAM: It's a small number.

GLINK: Very small.

ELAM: Yeah. All right, so I want to get into some specifics here, for people who may be in some situations. If you've got someone who's facing a foreclosure filing, they're facing a short sale, what do they need to do -- Ilyce.

GLINK: Well, if you're facing a short sale, that means you've got to get the lender to agree. What we've seen is just a complete backlog. Lenders seem to not want to take those losses on their books and so short sales, when you agree with a buyer, you're a seller and agree with a buyer on the price point, you then have to go to your lender and get them to agree and it's taking up to four to six months for the lender to even decide whether or not they will accept that price point, and many buyers are walking away.

So, if you're a seller, you're probably want to talk to your bank first and see what they're thinking about so you understand whether or not you're going to be able to do a short sale or you're going to have to go into foreclosure.

ELAM: All right, I want to make sure we get to your other points, here. So tell me, for a buyer, on the buyer side, what do they need to make sure they're doing?

GLINK: Well, you want to find a great agent who really specializes in foreclosures and short sales. Agents have special certifications these days that show they even know a little bit about it. Ask lot of questions. Find out if the agent works with different lenders as the agent responsible for selling those foreclosures. That's how you get in and get a good foreclosure at a great price.

ELAM: All right, and what about mortgage rates? Because what you see advertised may not be the real deal, right?

GLINK: Absolutely not. Although this week mortgage interest rates have fallen to the lowest point in 2010. We're back down to 4.75 percent, maybe even a little better than that for a 30-year, fixed-rate loan. So just be aware that if somebody's offering you, say three percent on the 30 year fixed-rate loan, that is too far out of the ball park, can't be a real number.

ELAM: All right, Ilyce Glink, you're full of great information. Thanks for join us this morning to help us, get us some ideas on what is going on in the housing market.

All right, where you call home sweet home could help or even hurt your income. We'll tell you where incomes are expected to go up and down across the country. That's coming up next.

(COMMERCIAL BREAK)

ELAM: Of course, everybody wants to get ahead, but it turns out where you live could be holding you back. Rick Newman is the chief business correspondent for "U.S. News & World Report" and he is with us here now to break down some of thiS.

Rick, thanks for being here this morning. So, tell me, where are the best places, in a nutshell, for job security and pay?

RICK NEWMAN, U.S. NEWS & WORLD REPORT: Well, I just did some analysis looking at income growth projected over the next five years. This sounds like a really boring economic statistic, so don't zone out. This is important because we're -- income growth actually reflects where the economy is likely to be very dynamic, new jobs are going to be created, people will get raises, you'll feel like you're getting ahead. And if income growth is low, that kind of tells you where the economy is somewhat stagnant and not a lot of new jobs and things like that.

So, what's interesting about this trend, which economists expect, is that some of the states that had the hardest time in the recession are likely to be the ones where incomes grow the most. So, on this list, this is from a forecasting firm called IHS Global Insight, Texas and Florida are in the top, Arizona is up there, Idaho, Colorado, some southern states and then even California and Nevada look like they're going to have pretty good income growth over the next couple of years.

So, that means those states will likely be in a state of pretty good recovery. It might not be happening right now, but it's likely to happen fairly soon.

ELAM: Well, I'm sure a lot of people would be surprised by that because you just hear about how California has been beaten up, you hear about Nevada and how it's going through and Arizona as well. So, is it just that people have left and now that there's people who going to be coming back?

NEWMAN: I think one of the big reasons is that a lot of the long-term trends are still in place. They were disrupted somewhat during the recession, but many of these states are in the Sunbelt. Now we saw this interesting thing in Florida last year where more people left Florida that went to Florida for the first time in decades, but that was probably just an anomaly.

So, many of the reasons that people wanted to go to these areas are still there. And now there's one other reason which is homes are pretty cheap, because these have been huge housing bust areas. So, if you're thinking about moving there, houses seem cheap.

ELAM: Yeah, so you can get a house and you always have the sun that makes people want to go there. That's pretty much how it is.

NEWMAN: Universal.

ELAM: Yeah, so let's talk about the other side of the spectrum, places where it's projected income is looking to go down.

NEWMAN: And it's kind of the inverse of what we just talked about. Some of the states where the economy was fairly stable during the recession are going to stay stable, but not going to grow a great deal. So, at the bottom of this list are places like Kansas and Nebraska. Unemployment has been fairly low there, but they just -- there's nothing there that will really trigger big growth in the future.

West Virginia is down there. Mining is good for that economy, but that's kind of all they've got. Arizona, Missouri, and if I can say one happy thing about Michigan which is always toward the bottom of these lists, it's not at the very bottom, it's toward the bottom, but it's not in the bottom five for once.

ELAM: All right, really quick before you go, what's the best way for someone to improve their standard of living?

NEWMAN: I think people need to think about differentiating yourself from the people you're competing with in the job market. That's more important than it's ever been, which means get new skills, get new education, don't get the idea you're entitled to a job, you're not, you're going to have to work for it and keep going after every advantage you can get.

ELAM: Yeah, it's one of those things that we keep hearing, the drum beat keeps going, you got to learn new things and diversify.

NEWMAN: Yeah, just get used to it.

ELAM: Rick Newman. All right, still to come, financial empowerment for a city in need.

(BEGIN VIDEO CLIP)

RYAN MACK, OPTIMUM CAPITAL MGMT: That's where the rebuilding of the city really starts, it's around that dinner table and talking to one another and communing with one another and showing love for one another.

(END VIDEO CLIP)

ELAM: How to put the neighbor back into neighborhood by teaching lessons in financial literacy.

(COMMERCIAL BREAK)

ELAM: The saying goes none of us is as strong or as powerful as all of us. With that in mind, our good friend Ryan Mack recently wrangled up a group of professionals to return to his hometown for the first annual Detroit National Teach-In, a week of economic empowerment summitS.

(BEGIN VIDEOTAPE)

MACK: This is Ryan Mack, day one of the Detroit National Teach- In is Monday morning, about 6:45 a.m. and I'm on my way right now to Renaissance High School, one of the most prestigious high schools in Detroit.

GAIL RUSSELL-JONES, PRINCIPAL, RENAISSANCE HIGH SCHOOL: I think financial literacy is important to our students because so many of them are interested in going into areas that are business related.

MACK: Detroit is 80 percent what?

UNIDENTIFIED FEMALE: Black.

MACK: Black. In the black community, the dollar circulates how much before it leaves the community? Not even one time. White community is about eight times, Asian community is about nine times before it leaves the community.

What is one thing you feel, as students, that we can improve upon, if they're looking you, saying let me apply this into my curriculum?

DONOVAN MCKINNEY, SENIOR, RENAISSANCE HIGH SCHOOL: Well, one thing I'm thinking off the top of my head is a community-based learning. You learn character by doing community service.

LAUREN SCALES, SENIOR, RENAISSANCE HIGH SCHOOL: We have a lot of clubs and organizations here. A lot of peer community that takes place and it's very motivating.

MACK: So, one problem is that we don't support our own businesseS. What's the other problem?

UNIDENTIFIED MALE: We don't really have any businesses.

MACK: We don't have any businesses to support.

KHADIJA WALKER-FOBBS, FOBBS & WALKER CONSULTING: The youth we've met today at Renaissance have been so bright. They've been goal- oriented. It's been so nice to talk to them a little bit about what some of their career goals are, what some of their visions are.

MACK: This is the end of day one of the Detroit National Teach- In and today was actually a pretty good day. It was very successful. On tap for tomorrow we have Blanche Kelso Bruce Academy.

UNIDENTIFIED MALE: I'm just so excited showing them what's possible and potential that's here. Showing them what's possible and also what's necessary for them to become more successful. Whatever is holding you back on an emotional level is also holding you back on a physical level, as well. There are two classes I encourage everyone to take in life. One is a class in acting. I want you to learn how to act as if. Everyone doesn't need to know how you feel. Learn how to begin to change your emotions. The next class is a class in martial arts because you need to know how to defend yourself on a physical level as well.

WALKER-FOBBS: Education is definitely key to the revitalization of Detroit because if we don't start lifting up our youth and start taking care of them, giving them the education that they need, there is going to be no revitalization of Detroit.

CHARLES PUGH, DETROIT CITY COUNCIL: We have the highest dropout rate in the country and our kids underperform in too many areas.

ROBIN THOMPSON, BUDGET WISE CONSULTING: The statistics bear out that the more educated you are, the more money you can make. And if you make more money, then you can obviously get that money working for you sooner than later.

(END VIDEOTAPE)

ELAM: And who, of course, does not want that? That's what everyone wants. Well, back in New York with us is Ryan Mack and he's going to walk us through a step-by-step guide to re-evaluating what exactly you need to do to make your dreams come true.

Ryan, thanks for being here.

MACK: Thank you.

ELAM: You say the first thing you need to do is figure out what it is that really drives you, right?

MACK: Well, your passion is critical. The two most important days of your life are the day you were born and the day you know why you were born. So, when you figure out why you're here. And so, what we all instruct individuals to do is to write down skills, talents or hobbies that can be a good indication of why you're here, what your talents are. You'll make the most money doing what you're good at doing and what you love to do.

ELAM: I don't think people expected for the philosophical side of Ryan Mack to come out when you're talking about financial literacy. But yeah, if you figure out what you are good at, so what? What if you decide I'm really good at this, but how do I change this into something that makes money for me?

MACK: Well exactly. See, if you're good at baking, and you might not necessarily think that five years from now you will have a law office or something like that, you might want to own your own restaurant. So, the first thing to figure out what sort of steps you need to take to start getting into more baking classeS.

If you're good at construction, you're good with your hands, you might want to figure out what sort of education you need in order to walk through the process of starting your own construction company. And again, these are things that we've helped individuals with, especially in the Detroit National Teach-In and what we really do on a yearly basis.

ELAM: And let's talk a little bit about resources. When you're evaluating what you may be good at, finding out how you can get there and what resources can help you.

MACK: Exactly, once you have your vision in place, and you have to figure out OK, now what resources can I use in order to help me achieve my vision and make sure that I can fulfill my purpose and passion in life?

Two most precious resources that you can every have are people and knowledge. You need to figure out what people can I talk to. I always say you're only one person away from achieving your true blessing in life. So, what people do I need to talk to? How can I network more effectively and efficiently? And then what knowledge do I need to have? You know?

Once I find out what people I'm connecting with, what schools do I need to enroll in, what community colleges? There's $2 billion in the safa (ph) legislation in order to go back to community colleges that are being helping -- helping individuals to get training, get education. So, these are the types of knowledge and people you can actually acquire the necessary resources to move ahead.

ELAM: So, and then let's just take all of that together then, and say you need to have a concrete plan about how you're going to attack it. How do you go about putting that together?

MACK: Well again, every three months, I call it my business plan for my own personal life, so I always get-together and say what sort of tangible steps do I need to put in place in order to make sure I can get from where I am today to achieving my true vision. So, a good step is not I'm going to feel good, I'm going to get on that side of the bed.

A good step is calling that individual to make a meeting with him to talk about what sort of connections can we leverage off one -- and I'm going to go to the community college and enroll. I'm going to make sure that I can go to FastWeb.com and enroll in that scholarship to go back to school. My children are going to school. I need to go to school myself so that we can have further education.

ELAM: Yeah, find that destination and find your way to get there. Ryan Mack, thanks so much, great work in Detroit.

MACK: Thank you. Appreciate it.

ELAM: All right, aside from the students who benefited from the Detroit National Teach-In, there are a group of inmates at a Detroit prison who received a lesson or two in financial prosperity. You can read "Learning Behind Bars" on our Web site at CNN.com/yourbottomline.

All right, still to come, I'll bet your credit card has some perks you don't even know about. We've got the list.

(COMMERCIAL BREAK)

ELAM: With sky high APRs and crazy fees, your credit card company might not be your favorite right now, but your credit card may have some hidden perks that'll put a smile on your face. Ben Woolsey is with CreditCards.com and he joins us today from Austin.

Ben, thanks so much for being here.

BEN WOOLSEY, CREDITCARDS.COM: Good morning, Stephanie.

ELAM: All right, so tell me about this. Like, when you look at your credit card perks, how is the best way to find out what they are?

WOOLSEY: Well, you can also look at your credit card agreement if you happen to have kept that when you signed up for your account. Probably the best way to find out what your benefits are, are just to call your credit card company, just call the number on the back of your card or you can go to their Web site or you can come to CreditCards.com and we have a full list of card member benefits.

ELAM: All right, so let's take a look at some of them. One that a lot of people don't realize, if you rent a car, chances are your credit card might actually cover you in some of that -- in some of your insurance needs, right?

WOOLSEY: That's right. And this is probably one of the biggest benefits, in my opinion, because most credit cards offer the exact same type of collision damage waiver coverage that the major car rental companies try to sell you when you go to the counter and try to rent a car, so there's really no need to pay for it a second time when you already have it.

There are a few caveats, you can't get this type of coverage if you're renting a car long term like over 30 days and certain types of vehicles, but it's really a tremendous benefit to have this coverage. It can save you 20 percent on your car rental coverage.

ELAM: So, do you have to -- you just have to just waive it when you get your rental car because you just use that credit card and you will be good to go.

WOOLSEY: That's right. Charge the entire cost onto your credit card.

ELAM: All right. Let's also talk about trip insurance because that's another biggie for people who are traveling to know they've got that backup.

WOOLSEY: It really is. Trip cancellation insurance, just like you might buy from your travel agent, this will cover the entire cost of a trip if it happens to get canceled due to illness or death in your family or from a natural disaster like one of the things we've been hearing about with volcano eruptions and the oil spill in the gulf, so that could be a tremendous benefit to consumers. ELAM: Yeah, especially if a volcano erupts and you can't do anything about it. That's a great thing. And this one, almost everyone has a cell phone, but I bet most everyone doesn't know they might be able to get their cell phone replaced.

WOOLSEY: That's right. And if you have an expensive cell phone, you know, most of us have SmartPhones these day, so if you have an iPhone or a Blackberry, this type of coverage can cover the entire cost of that up to about $200. There's typically a small deductible that you'll have to pay, but it's similar to the type of insurance that the cell phone providers sell when you sign up for a plan, so it's a tremendous benefit, as well. You have to typically pay for your cell phone bill every month with your credit card to qualify, though.

ELAM: This is really good information. I'm sure you just gave a lot of people some good ideas, Ben Woolsey. Thanks so much for joining us this morning.

WOOLSEY: My pleasure.

ELAM: All right, up next, what you need to know before you trash that old cell phone or computer.

(COMMERCIAL BREAK)

ELAM: Solving problems is something Alex Lin really likes to do. Over the last five years he and his team have helped recycle 300,000 pounds of electronics keeping mercury and lead from polluting their environment. I got a chance to catch up with the teenager to find out how the team is cleaning up one town and one state at a time.

(BEGIN VIDEOTAPE)

ELAM (voice-over): Sixteen-year-old Alex Lin likes to go for impact. Besides the rigors of AP classes and competitive sports, the high school senior has made helping others while also protecting the environment an important part of his schedule.

ALEXANDER LIN, WIN FOUNDER: When you are throwing out hundreds of thousands of tons of computers, it all adds up, and especially back when everybody was using CRT monitors. Each of those had between four and eight pounds of lead. Add that up and that's a lot of lead going into our landfills, going into our ground and going into our water.

ELAM: Driven to find creative solutions for his community's problems, Alex began WIN, Westerly Innovations Network with a galvanized group of peers.

JEFF BROOKE, WIN TEAM MEMBER: It takes up a good amount of time. You really have to be dedicated to do something this big.

NANCI FIORE-CHETTIAR, WIN TEAM MEMBER: I love helping people. I love that that's what we do.

ELAM: Working with his hometown of Westerly, Rhode Island, he set up a place to recycle old computers and monitors.

LIN: If we use it we'll take it in so we can refurbish it and if not we'll bring it to the transportation to recycle it. Most of the computers have gone to students here in Westerly, locally. Also, we have a separate section of the computers that we refurbish which have gone overseas to community centers.

ELAM: To places in Kenya, Cameroon, the Philippines, Mexico, and Sri Lanka where the computer center was named after the WIN team.

LIN: That was one of our awesome (INAUDIBLE) project, I'd say, when we found out that there is a place pretty literally half way across the world that was actually named after our project.

ELAM: But WIN wanted to do more, so they introduced an ordinance to ban the dumping of electronics in Westerly.

LIN: Eventually we did got the law passed statewide. We can hopefully we can get it out to around the entire nation where there are these systems in place to properly dispose of electronics. Just like there are systems to dispose of aluminum, paper, and plastics.

ELAM: As Alex heads to Stanford University in the fall, he says he'll keep solving problems.

LIN: I'll find something new or some other way to make myself active and have lasting impact, but definitely something like this, maybe not exactly this.

(END VIDEOTAPE)

ELAM: That's one really driven kid. Now, here's how you can give back to others for no cost and it's this week's free for all.

First, investigate programs at local schools or charities to donate your old computer or TV, and don't forget about resources on the Web like Christina.org and freecycle.org. If you want to recycle an iPod for cell phone head to an Apple store or check with your provider. Verizon donates old phones to victims of domestic abuse and AT&T will donate recycled phones to buy prepaid phone cards for active military members.

And finally, before donating, make sure you wipe your device of all of your personal info. Use free downloadable software like Eraser if you want to get info off of your hard drive and when it comes to your cell phone, take it back to a dealer and have a technician override your data. That usually takes about 30 minutes and is usually free.

All right, we'll see you right back here next week for YOUR BOTTOM LINE, the show that saves you money, same time 9:30 a.m. Eastern on Saturday and of course, don't miss Christine Romans and Ali Velshi on "YOUR MONEY," today at 1:00 p.m. Eastern and tomorrow at 3:00.

But right now, let's get you a check of the top stories with Jim Acosta and Kate Bolduan in the CNN "NEWSROOM" and that starts right.