More Solutions Offered for Homeowners; AIG Defends Sales Retreat
KYRA PHILLIPS, HOST (voice-over): The war on foreclosures. Another big bank decides bad mortgages are bad business. If you're in danger of default, this could mean you keep your house.</s>TED TURNER, MEDIA MOGUL: It was a struggle financing CNN, but I did it without ever asking the government for a nickel.</s>PHILLIPS: The bailout, according to Ted. Turner, that is. The man who built CNN weighs in on politics, the economy, and the ex who's still in his life.</s>JANE FONDA, ACTRESS: Are you CNN?</s>UNIDENTIFIED MALE: We were never</s>PHILLIPS: Memories of war, liberation, and unspeakable cruelty in a concentration camp. The details were secret for decades.</s>PHILLIPS: And hello everyone. I'm Kyra Phillips, live at the CNN world headquarters in Atlanta. You're live in the CNN NEWSROOM. We want to get right to it this hour. Two big stories from issue No. 1. A major move by Citigroup to help tons of thousands of mortgage holders in danger of default or already there rework their loans and keep their homes. And while many homeowners are holding out hope for a bailout, a corporate bailout beneficiary is suspending its spending. AIG says a conference in Phoenix for sales staff and clients was SOP, standard operating procedure, not a perk on taxpayers' dimes. Let's start where all the trouble started not so long ago, with mortgages. The move by Citigroup is the latest by major lenders to get their own houses in order by helping borrowers keep theirs. CNN's Gerri Willis joins me here in the NEWSROOM to run the numbers and explain what they could mean for you.</s>PHILLIPS: OK, Gerri. Let's begin with help as a homeowner. Why don't we start with Citibank?</s>GERRI WILLIS, PERSONAL FINANCE EDITOR: That's right. Citibank has a new program out there for homeowners. They're proactively going out into communities right now, contacting 500,000, half a million homeowners, and offering them new loans, more affordable loans. Now, actually, Citi's not the only bank in the country doing this. Bank of America is doing it. All of them are trying to do it now, because they're getting money from the federal government. And I think they feel a little guilty. They've got to put something back into the community. But if you are a Citibank mortgage holder, you might want to proactively call them and talk to them about this program. It's very interesting, and it really could help a lot of people out there.</s>PHILLIPS: And do I dare ask about Fannie and Freddie?</s>WILLIS: There's a new program.</s>PHILLIPS: OK.</s>WILLIS: Yet another program. Fannie Mae, Freddie Mac, they're coming out with a new program. This one could be very interesting. It would take your mortgage payment, your mortgage loan, and reduce it to 38 percent of your monthly income.</s>PHILLIPS: Wow.</s>WILLIS: Think about that. That is the affordability level for people out there. That could make a very big difference for folks out there. We're just getting details of this now, but it could be a very interesting program. And of course, Freddie Mac and Fannie Mae, they stand right at the center of the mortgage industry, and they have the ability to touch lots of lives. And that's been the problem with a lot of these programs so far, is that they just haven't gotten up to speed. The numbers are not that impressive yet when you consider millions of Americans are worried about foreclosures.</s>PHILLIPS: Right. Look at that. Lowering principles, reducing interest rates, extending loans. All right. What if I'm a homeowner facing foreclosure? You know, do all of those plans necessarily apply to me?</s>WILLIS: Well, not everything is starting tomorrow. OK? So you may be having trouble today and be worried about losing your home today. Call your bank yet again, even if you've been turned down. Even if you're been turned down for help so far, a new program may be out there that can help you. Definitely you want to talk to them. Also, get some counseling help. NFCC.org, a great Web site to go to, get a credit counselor. Because let's face it, if you're having trouble paying your mortgage, you may have trouble paying other bills. Your financial problems may be bigger than your mortgage. So get help there. Also, HUD.gov. That's the Department of Housing and Urban Development. These are the folks that are administering many of these programs that we've been talking about. They have counselors in local areas, maybe in your neighborhood, who can consult with you and tell you the best program to go to for your problem. So you've got to get local help. You've got to reach out, call somebody if you're in trouble today.</s>PHILLIPS: Well, it's way too soon to figure out the lessons from the economic meltdown and the various attempts to fix it, but here's one. If you take tens of billions of taxpayer dollars in a bailout, then ask for more on more generous terms, you may want to cancel anything that looks like you're having fun. The insurance giant AIG is insisting that a sales conference last week in Phoenix was legitimate business, not a fat cat retreat. CNN's Allan Chernoff on the story in New York. Allan, is this a question of appearances, or is it something more?</s>ALLAN CHERNOFF, CNN CORRESPONDENT: Well, Kyra, this is really an example of how it's so difficult to continue your basic operations when you are the recipient of billions and billions of dollars from the federal government and when, indeed, the federal government now owns 80 percent of your company. What happened was, as you said, last week AIG held a conference for financial planners. This was a conference to basically explain investment products, to educate, held at the Pointe Hilton, a very nice hotel. It is located in Squaw Peak. It's called the Squaw Peak Resort. And you see the beautiful picture there. Well, that has attracted the attention of Representative Elijah Cummings. He appeared this morning on "AMERICAN MORNING," quite critical of AIG. Let's have a listen.</s>REP. ELIJAH CUMMINGS (D), MARYLAND: These guys, they don't get it, and they came to us basically saying, "We are on the critical list. We need a respirator." And we bail them out, and the next thing we know, we turn around and they're going out partying and spending taxpayers' dollars. And it's kind of -- it's very upsetting.</s>CHERNOFF: Representative Cummings has added to the criticism, sending a letter to the chief executive, the brand new chief executive, Edward Liddy, of the company, basically saying, AIG can take a step by "accepting your resignation from the positions of chairman and chief executive officer." Keep in mind, the new chairman and CEO, well, he's only been in place for a few weeks. He was put in place after this bailout was put into effect. Now, AIG is saying that this is entirely unjustified, unfair criticism of a very legitimate conference. They say this was absolutely not some fancy retreat. There were not major parties going on here. This is basically, the company says, essential for educating financial planners. They say it was education for financial planners. Keep in mind, to be a certified financial planner, you have to receive plenty of continuing education. They say, indeed, the product sponsors, which include companies like Morningstar, paid 93 percent of the cost of this event, and AIG paid less than $25,000. In fact, Terry Bradshaw was scheduled to give, the former quarterback, football quarterback, was scheduled to give a motivational speech there. It was canceled. And AIG says, they weren't even going to pay his fee for that. So they canceled that. They didn't want to have the appearance of anything seeming to be extravagant. And also, AIG has put out a statement saying, "We take very seriously our commitment to aggressively manage meeting costs." That's from the president and CEO of the AIG adviser group. Kyra, I guess AIG could have scheduled this at a Motel 6. Not to put down Motel 6, but they probably would not have attracted many financial planners to that meeting -- Kyra.</s>PHILLIPS: From what I know about that swanky area, I don't think there is a Motel 6. Allan Chernoff...</s>CHERNOFF: Probably not.</s>PHILLIPS: Exactly. All right. We're going to talk with Elijah Cummings at the half hour and follow up on what he had to say. Thanks so much, Allan. Well, thank you for serving. A sentiment echoing across the nation and on this Veterans Day. Arlington National Cemetery, Vice President Cheney lays the wreath at the Tomb of the Unknowns, honoring countless Americans who have died in war without their remains being identified. The USS Midway in San Diego proves that America's troops may be uniform on the outside but diverse on the inside. More than 130 sworn in today as U.S. citizens on the historic aircraft carrier. And the future commander in chief also marked Veterans Day. President-elect Obama laid a wreath at a Chicago memorial. With him was Illinois director of family affairs, Tammy Duckworth, an Iraq vet who lost both her legs. She will join me live next hour. Well, this is President Bush's last Veterans Day as commander in chief, and he marked it by giving an old battleship a new mission. On the Hudson River in New York City, the president rededicated the Intrepid, a battled-hardened, World-War-II-era aircraft carrier that's now a floating museum. And he answered a much-asked question.</s>GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: You know, oftentimes they ask me, "What are you going to miss about the presidency?" And first reaction is, I say, "No traffic jams in New York." The truth of the matter is, I will miss being the commander in chief of such a fabulous group of men and women, those who wear the uniform of the United States military.</s>PHILLIPS: Straight ahead, stories of war, survival, hope. So many stories to tell you on this Veterans Day. Coming up, the Survivor Corps, headed by a soldier who lost his limbs, but not his hope. Plus, a soldier's diary. A harrowing tale that no one was supposed to tell and you were not supposed to hear until now. And a lifeline for refugees. A combat vet helps the victims of war. Those stories and more, straight ahead. Under President Bush, they're a "Who's Who" list of bad guys. So how will Barack Obama deal with the leaders of Iran, North Korea, Cuba, and other nations? And will things really change? We'll explore that big challenge for the new president with our Zain Verjee. In East Tennessee, time to run for cover, as an SUV comes crashing through the front of a convenience store. We'll tell you what happened.