Suze: That's known as a short sale. If it is your primary residency, then you do not owe taxes on the difference between what you sold it for and what you owed. If you foreclose it, there's no tax owed on it. So you do not owe taxes on that difference. If it is a rental property, however, everybody listen to me, if it is a rental property, you owe income tax on that money unless you are 100 percent insolvent, which means you have no money whatsoever. So you may be ending up, please consult your CPA about this, because it was your primary residency, because you never moved—you know, you never rented it out, now you had to move, you may, if you do a foreclosure or a short sale, you do not owe income tax on that. That is huge, my friend. That is huge. So once again, you may be in a situation where you just said "unfortunately." It's not unfortunately. It's fortunately for you because the one entity you do not want to owe money to is the IRS, who has the legal authority to seize your money, to put liens on anything, to garnish your wages. Are you kidding? Congratulations.
Nicole: Thank you.
Suze: Any time.
Oprah: Any time. How is it that you know all—how—your vast knowledge of all of this is what's so extraordinary.
Suze: It's the only thing that I love in terms of the things that are out there. Obviously, I love people.
Suze: I love these things. I can sit—
Oprah: So do you study, you know, mortgages, real estate.
Suze: Twenty-four hours a day.
Suze: Twenty-four hours a day.
Oprah: So what were you like as a little girl? Were you do thing as a kid?
Suze: Well, the only thing that I did as a kid was that my mama had to be a secretary so Caritha McCoy, I couldn't say her name, so it was KiKi, who was years of age who was totally illiterate was hired to take care of me while my mom worked. And KiKi, who I loved, an African-American woman, I loved this woman. And she smoked Kool cigarettes that was 25 cents a package. And she would send me to the store with a little note saying, "Here's 24 cents. It's okay for Suze to buy a pack of Kool cigarettes and bring it home."
Suze: And I would sit there and I would say, "KiKi, if we saved this 23 cents, do you know you would have enough money to leave?" Because she was in a situation where she was a battered woman, because we would always have to go get her at Cook County Hospital when this guy, Frank, would beat her up and bring her back and live with us until she was okay and then she went back to Frank because she didn't have the money to leave. And so I would say, "KiKi"—
Oprah: As a kid.
Suze: As a kid. Six years old. Eight years old. I would say, "KiKi, if we could save this 23 cents and you didn't smoke, this is how much money we could have over this period of time, then you could leave and you wouldn't get beat up and then I could have you for the rest of my life."
Suze: So very young I started to get that money was the ticket to freedom that would not ever keep KiKi in a situation that eventually KiKi never made it past 40.
Oprah: She did not.
Suze: No, she did not make it past 40. Because my dream in life, Oprah, was to grow up and make a lot of money and have KiKi move in with me and I was going to take care of KiKi for the rest of my life.
Suze: And I never got to do that.
Oprah: You know I asked that question because you cannot speak to power the way you do unless it has been coming from something.
Suze: I have loved it—I didn't know I loved it.
Suze: I didn't know I loved it until I—you know, at I became a financial adviser after being a waitress, as you know, for seven years until I was 30. But then when I sat there that first day in that office and I started hearing this I went, "Oh my God. I get this."
Oprah: You went, "I'm home."
Suze: I'm home.
Oprah: You're home.
Suze: I came home. I didn't know where home was. I didn't study it in school. I was going to be a social worker.
Oprah: And you are.
Suze: In a way.
Oprah: That's what you've been doing tonight.
Suze: But it is my love. I could do this 24 hours a day. We could do an all night—I could sit here for 24 hours and answer every question and be like this for everyone.
Oprah: Wow. I know, I feel that from you.
Suze: Yeah. Oh, I love it.
Oprah: Tanya's on a business trip in California Skyping from her hotel room. What's your question, Tanya?
Tanya: Hi, Oprah. Hi, Suze.
Tanya: I'm thanking you so much for this opportunity and I'm being empowered every second, and one of the questions that I have is about my home mortgage. I recently discovered that I didn't pay attention when I was getting a house and getting my mortgage. I was just so excited about becoming a homeowner. So I didn't pay attention to the kind of mortgage I have and recently discovered from a call from my mortgage company that one of my mortgages is going to be set to adjust July of 2009. And I contacted the mortgage company to try and find out from them what other options I have, and they told me basically they weren't offering anything. And I wanted to know what other approach I could take to try—I can afford the mortgage now, and I don't know what the rates will be—
Suze: Let me did you some questions here then. Tanya, do you have equity in the home? Is the home worth more than what you owe?
Tanya: I don't think so.
Suze: So now we have a problem. That's where they get you. Is the home worth the same as it what you owe or less than what you owe?
Tanya: It's worth the same as what I owe at this point.
Suze: Yeah. That's where it's sad because if there was a little equity in it, even like 10 percent and your FICO stores were good, do you know what your FICO scores are?
Tanya: My FICO scores are not in the 720 range as you said. They're more in the 680s to 640s range at this point.
Suze: All right. And do you have any extra money coming in that you could save to put down on this home in if we were going to do a refinance?
Tanya: Well, that's what I'm working toward. I have money that I—I have excess that I can save right now, fortunately. I've been putting that away to try and decide how to approach it.
Suze: And is this a home that you're going to stay in?
Tanya: If I don't find a millionaire to whisk me away, then I intend to probably be there for some time, yes.