Don't attempt to adjust your radio if you hear some ambient noise this hour. That's just Clark broadcasting on location as part of Christmas Kids 2007! Interested in helping out a needy child this holiday season? Clark will be personally accepting donations at stores throughout the Atlanta area until Dec. 15. If you're not able to make it out, why not donate online? By working with the Salvation Army, your gifts can be distributed to children right in your own state or area!

Switching gears for a moment, Clark wants to discuss President Bush's announcement about a voluntary plan for people in mortgage meltdown to receive assistance from their lender. Those who took out blow-up mortgages like 2/28 loans in the last few years and have been current on their payments are most likely to benefit. 2/28 loans are typically offered to first-time homebuyers or people with damaged credit. The homebuyers were conned into 2-year loans at a decent rate that becomes outrageous after 24 months. Sometimes the blow-up rate will put the annual payments near or equal to the homeowners' annual income.

Under Bush's plan, lenders can voluntarily freeze the interest rate for 5 years if it's a homeowner's primary residence and they've made timely payments for the first 2 years. This will not help speculative buyers who got into 2/28 loans. Ironically, there are protections under bankruptcy law for spec buyers that don't apply to owner-occupied property. Clark thinks it's reasonable that there shouldn't be any coercion on lenders to freeze the rate. If the government were to try to impose its will, it would have a negative effect on the confidence of investors making loans. After all, why should an investor take on the risk if the government will just come in and decide how much money they'll be able to earn back? Some lenders would be wise to freeze the interest rate; it's a much cheaper option than having to pay to foreclose on tons of properties. Nobody wins in those situations.

A lot of people in real estate love doing 1031 Exchanges. If you're not familiar with the term, 1031s allow you to sell an investment property and roll your gains over into a new investment property -- rather than paying taxes on your capital gains. There are certain rules governing 1031s. The money must go directly into the hand of a qualified intermediary. You have 45 days to identify a new property, and you have 180 days to actually acquire that property. But there have been a lot of problems with 1031s because some qualified intermediaries are running off with the cash. Now The Washington Post reports that the IRS is retroactively disallowing some 1031s as a precaution.

Clark's real advice is to not do a 1031. People are so obsessed with avoiding tax that they lose sight of the bigger financial picture. For example, right now the max tax you'll pay when you sell a property is 15 percent. That's the best deal we've had in years. With the Democrats likely to get into office in 2008, most of their candidates are talking about capital-gains taxes of 28 percent. So doing a 1031 now to defer paying 15 percent when you'll later pay 28 percent is not "Clark Smart." Instead, just harvest your gains and pay your taxes! Clark knows everyone will tell you the opposite. But he believes the tax rates are only likely to go higher. This is best it's ever been; it's probably not going to get better -- only more expensive.

There's a big push and shove going on right now to determine who should help out people who are in over their heads with mortgages. The Federal Reserve had issued some weak guidelines, known as workouts, to try to lend a hand. That's OK, so long as it doesn't become a federal bailout. Clark is opposed to a plan that's been floating around Congress to use federal money to keep people in their homes. This whole problem came about because lenders were greedy and/or foolish in the loans they wrote, while borrowers were also foolish for believing they could handle loans that they really couldn't. There needs to be a change in how mortgage brokers are overseen -- they can't be the Wild West part of the market anymore. Lenders and mortgage brokers should be liable, along with defaulted borrowers, if they wrote unsuitable loans just to pad their pockets. Then they'll be forced to police their own industry. Taxpayers should not be on the hook to bail things out. When more than 90 percent of homeowners conscientiously meet their mortgage obligations, why should they subsidize the others who don't?

It's no secret that the nation's housing market is in bad shape. Foreclosures in California are at an all-time high, and the market is equally hurt in Nevada, Arizona and Washington D.C. How did we get in this mess? Well, after 9/11 people became nesters and saw their homes as safe harbors. The tech bubble in the stock market had just burst and people psychologically started clinging to "real" estate in the tangible form of their homes. The home improvement industry enjoyed a surge in popularity as a result. But in the middle of it all, the standards for home lending fell apart. People with bad credit who had no money got horrible loans with low teaser payments that were like ticking time bombs. After two years, there was a huge increase in the mortgage payment and they could no longer afford it. Foreclosures started to become more common. There was a false demand for houses, and speculators bid up the prices. Also, all speculative buyers used to have 30 percent down. But that requirement was relaxed during this time, too. Clark says he knew we were in trouble when he started hearing about people buying houses they'd never seen and property in states they've never visited.

Thankfully, the teller window is now closed for people with bad credit and no money down; those who can't document their income; and those who want to buy on spec with no money down. Clark thinks this a good thing. He's just amazed that now the feds are starting to make noise about wanting to ban these kinds of lending so late in the game. Capitol Hill wants to make it so that when you take out a loan, you have to get an explanation of all the details in plain and simple language. But the funny thing is that the feds aren't considering making hard-and-fast rules -- just some proposed guidelines. Well, the American Enterprise Institute beat them to the punch by drawing up a mortgage cheat sheet (and definition of terms) that tell you exactly the right questions to ask of your lender. Clark really likes the AEI's version because it helps homebuyers avoid getting ripped off. He also thinks it's so much easier to understand than the feds' guidelines.

Projections about the year’s foreclosures are always a guess at best. The most conservative guess is about 1 million homes, while the high estimate is 2.25 million. That’s a lot of families that could end up on the street. Congress has even suggested that the government should help out and offer people grants. But Clark doesn’t agree. He doesn’t think that is their role. A member of the FDIC took a different tack on the matter. That person suggested that - when a person takes out an option-payment loan or teaser rate loans – that person must qualify at the worst rate the loan could have. Typically, people just look at the beginning rate and jump in. But they don’t understand that rate could double or even triple down the road. Lenders should be required to qualify people based on what the loan could become. No one wants to see people put out on the street. But banks are allowed to make all kinds of risky loans that harm the consumer. Unless things change, taxpayers will be on the hook to bail out the banks again at some point.

Should you buy title insurance when buying a home? Clark tells you that, plus more. Just remember to disable your pop-up blocker to hear Clark.

Have you heard about the prescription drug benefit for senior citizens that is launching next year? It’s going to be provided by private companies to Medicare-eligible seniors, and they’ll have up to 20 choices for programs depending on where they live. The plans will have a monthly premium and it’s important to get in on the early side or there are financial penalties for signing up later. Enrollment starts Nov. 15 and the program goes into effect Jan. 1, 2006. It can get quite confusing, so it’s important to go over the terms with your parents. Seniors will pay a monthly premium that will vary from company to company. For every prescription a senior buys, the first $250 comes out of pocket. After that, Medicare covers 75 percent of the next $2,000 in drug purchases. The program pretty much stops there. If you go beyond $3,000 in drug purchases, it comes out of the senior’s pocket. And, after $5,000, the government gets involved again. So, you and your parents need to read up on this. The one thing you don’t want to do is to make no decision at all. Now, there is one group of people that should not participate in a Medicare benefit plan. The small number of people who are offered a good plan as a retiree should not get involved. It’s a potential break from the exorbitant prescription drug costs out there, but you need to do your homework. Click here for more information.

Clark has a very strong bias regarding energy legislation and the need to create alternative sources of energy in the U.S. An electric utility, PG&E, believes this too and is offering incentives to buy energy efficient appliances. This is great news because it’s hard to get companies to see the benefits of getting more bang for the buck in this area. Consumers are sold on it. We know it’s worth it to spend a little more to get a longer lasting, more efficient product. But companies are reluctant to do that. In actuality it saves them money because those last kilowatts of energy they must produce cost much more than the first kilowatts they put out. So the less energy used the less it costs them. Find out more about it here.

The federal government has started a program called the “American Dream Down Payment Initiative,” and it could mean free money for you. If you’ve never owned a home, you are potentially eligible for a grant of up to $10,000 toward the price of a home. You can buy either a quadplex, a condo, co-op or mobile home. You must be a first-time homeowner, and you must me income eligible. That means you can’t earn more than a certain amount, usually $40,000 to $50,000. The program has a limited number of slots available, and it will be a little while it goes into effect. But it’s a terrific idea. PHAs and LHAs, public housing authorities and local housing authorities will administer the program. Hud.gov has information about the program. But you’ll want to get in early because the money is limited. And remember, it’s a grant not a loan. You don’t have to pay it back. Why is this a good thing for taxpayers? People who own a home have more of a stake in their community and tend to do more to keep it clean and fight against crime. Therefore, the value of the homes increase and the quality of life is much better for everyone.