Foreclosure Prevention Clinic at Allen Temple Baptist Church Hosted by the Prophetic Justice Ministry and Mabuhay Alliance

First Community Foreclosure Protest in Context of Dodd/Frank Wall Street Reform Bill:

San Diego, July 7th


Date:               Wednesday, July 7, 2010

Time:               11 am – 12 pm

Location:         Union Bank, 1201 5th Avenue, San Diego, CA 92101

Congressman Bob Filner will co-host with Mabuhay Alliance the first Main Street protest regarding bank foreclosures since the Dodd/Frank bank reform bill was passed by the House.  The protest will begin with Japanese/Morgan Stanley controlled Union Bank at its San Diego headquarters at 1201 5th Avenue, San Diego, CA 92101 at 11 am.

Congressman Filner and Mabuhay will be joined by 50 protesting homeowners who will discuss Union Bank’s harsh anti-foreclosure policies that are incompatible with the Dodd/Frank Bank Reform bill. Congressman Filner and Mabuhay Alliance will also discuss future regulatory reforms in context of the Dodd/Frank Bank Reform bill to protect up to 20 million homeowners from foreclosure.

A single mother with four children, two of whom are disabled will speak at the press conference on how Union Bank has refused her a loan modification, has foreclosed on her property, has sued to evict her and has asked the sheriff to take immediate action.  Faith Bautista will discuss why this is inconsistent with the Obama program, the Frank Dodd bill and the practices of their Japanese parent company as applied in Japan.  Attached is the letter Mabuhay sent to Union Bank on this issue.

Immediately following the press conference at Union Bank there will be a similar protest/press conference at Citibank’s headquarters criticizing Citigroup’s anti-consumer policies on foreclosure despite it being the beneficiary of $45 billion in taxpayer (TARP) funds.  Press conference is at Citibank headquarters near Union Bank at 755 Broadway Circle, San Diego, CA 92101.

Congressman Filner said, “Too many people across San Diego have lost their homes as a result of reckless decisions by Wall Street.  The Wall Street reform bill will put the power back in the hands of consumers and restore some common sense to our financial system.  I want to thank the Mabuhay Alliance and the many banks who are working to prevent foreclosures so people can stay in their homes and ask the other banks to follow their lead.”

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Viewpoint: Promote Homeownership, Minimize Federal Housing Subsidies

By Marcia Griffin and Faith Bautista  

The Congressional Budget Office has estimated that in 2009, $230 billion of federal funds, including tax subsidies, was spent to promote homeownership.

The visionary chairman of the FDIC, Sheila Bair, recently delivered a speech in Washington to a housing group urging the federal government to re-examine almost three decades of policies that helped create a 69% homeownership rate, a rate she said may “ultimately prove unsustainable.”

We concur with Chairman Bair‘s contention that federal tax policies may be harmful to homeownership, but we do not concur that the 69% homeownership rate reached in 2006 is inherently unsustainable.

According to Eurostat, close to 75% of families within the European Union are homeowners.

These high rates have occurred despite the absence of massive homeownership subsidies in Europe.

In contrast, despite massive U.S. tax subsidies the U.S. homeownership rate is well below the European rate. According to the Congressional Joint Committee on Taxation, the U.S. government spent $600 billion for mortgage deductions and $200 billion over five years for property tax deductions and capital gains exclusions over the last five years (not to mention over $135 billion recently provided in subsidies to Fannie Mae and Freddie Mac).

Currently, most property tax deductions, capital gains exclusions and mortgage interest deductions disproportionately benefit the very affluent who purchase expensive mansions and help artificially increase the cost of homeownership for all.

We could have a homeownership rate for all Americans, including blacks and Latinos that is equal to the European Union rate and to the present white rate in the U.S. (72%) by reducing the tax subsidies and redirecting them. For example, over a period of 10 years the tax subsidy system could gradually be modified so that the maximum tax credit, adjusted for inflation, is $5,000 annually.

This credit could eventually be limited to those at 120% or below median income in the region and possibly just for first-time homeowners. These policies will ultimately serve the upper middle class as well, since they will eliminate the artificial housing bubble caused by $200 billion a year in direct and indirect federal housing subsidies.

The direct cost of this $5,000 annual tax credit, assuming 15 million families are eligible each year, would be only $75 billion, versus the $230 billion the Congressional Budget Office estimated were our costs in 2009.

This also would provide Fannie and Freddie with the clear purpose of encouraging homeownership among underserved communities. With these modest subsidies, we could eventually reach the levels of homeownership for blacks, Latinos and Southeast Asians that now exist for the white population in the U.S. and the almost 75% within the European Union.

It is impossible to determine just how modest and inadequate the homeownership rate is for blacks and Latinos who have been hit hardest by subprime loans, loss of equity and living in homes where they are deeply underwater.

The New York Federal Reserve’s chief economists recently provided one measure of this problem. They stated that the 67.2% official homeownership rate for 2010 is overstated because it does not exclude families deeply underwater who are in reality renters. They suggested a gap of at 5.6% between the listed rate and the real rate, if deeply underwater families were excluded.

The data available shows a disproportion of blacks and Latinos facing foreclosure and it is possible that up to half of blacks and Latinos in many hard-hit areas of our nation are deeply underwater.

During Bair’s speech to the Housing Association of Nonprofit Developers, she also emphasized the need for far greater consumer education.

We concur but believe that a significant amount of consumer education must begin not after the purchase of a home, but well before the purchase of a home, and be continual and sustainable to ensure that families are fully prepared.

The debate about the value of homeownership versus renting is needless given the enormous benefits of homeownership that go well beyond the potential increase in equity. Every index of good citizenship, higher educational attainment, personal achievement or higher income heavily favor homeownership. Despite their many weaknesses, there is a need for Freddie Mac and Fannie Mae, though their priorities and directions must be changed to primarily support homeownership among low- and moderate-income families.

Marcia Griffin is the president of HomeFree-USA. Faith Bautista is the president of the Mabuhay Alliance.

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“Geithner is Correct That We Must Promote Homeownership and Redesign Federal Subsidies”

The American Banker


Recently Secretary of the Treasury Geithner, who is increasingly assuming a more pro-Main Street stance, informed Congress that the federal government must continue to support homeownership through federal subsidies.


As every wealthy American and banking lobbyist knows, America has done more to subsidize homeownership of the affluent than any nation in the world. Last year, a $104 billion in tax subsidies was granted directly to homeowners who deduct their annual mortgage interest payments. In addition, $25 billion or more was lost to the Treasury through related property tax reductions.


Unfortunately, these tax subsidies are misdirected and rarely have any impact on homeownership. This is because the primary beneficiaries are those in the highest tax brackets with up to one million dollars in deductible interest payments. For some wealthy families, this amounts to $30,000 a year in tax benefits for homeownership or a value of almost a million dollars over the lifetime of a 30 year fixed rate mortgage.


But homeownership is not higher in the US as a result. In neighboring Canada, with a lower per capita income and no tax subsidies, homeownership is over 68% versus 67% in the US. And, in Great Britain, which recently phased out its tax subsidies, homeownership is at 73%.


We urge the administration, consistent with Secretary Geithner’s March 23rd Congressional report emphasizing the need for widely available mortgage credit, housing affordability and consumer protection, to consider two Main Street proposals. These could help produce a homeownership level as high as in Great Britain and help close the minority homeownership gap.


Due to their direct stimulus on new homeownership, up to 2 million new jobs a year and help create far more tax revenue for local communities presently facing severe essential service cutbacks.


The first proposal is to permit all homeowners with a mortgage who are at 120% or below median income to receive an annual $5000 per year homeownership subsidy. This subsidy would be limited to homes purchased at a price no greater than 120% of the median sales price in the region and disallow any deductions. This could benefit up to 20 million low/moderate income present and future homeowners. It would do so at a cost below the present annual subsidy that primarily benefits the affluent who would own a home with or without subsidies.


To minimize the costs of this program, all present homeowner tax subsidies could be gradually phased out beginning with limits on income and mortgage size. For example, reduce the maximum mortgage eligible for a deduction to twice the median cost in a region and disallow deductions for families with over $250,000 in annual income.


This $5000 annual subsidy could also effectively be used to ensure that families can meet the 20% down payment requirements. That is, the eligible homeowners could assign to the lender their right to the subsidy until the 20% down payment is met. For a median- priced home (presently $165,000) this could be accomplished in less than six years.


The other interrelated reform necessary to help close the minority homeownership gap, and encourage responsible homeownership rates as high as in Canada and Great Britain, would be to provide a 4.5 percent “plain vanilla” 30 to 40 year mortgage to all homeowners at 120% or below the median income for any home at a 120% or below the median home price in the region.


This easily understood “plain vanilla” mortgage has a number of other advantages. It meets the original Obama administration position that all financial institutions should offer as their primary mortgage instrument a “plain vanilla” option. Second, it minimizes the need for a fully independent Consumer Financial Protection Agency to protect consumers from predatory lending and confusing adjustable rate mortgages such as the generally discredited option ARMs.


One other reform that would help promote homeownership, create jobs, and restore the stability of home prices and neighborhoods would be to revamp our presently unreliable and unworkable credit scoring system. This badly flawed system has failed to protect against the affluent who walk away from their homes when they are deeply underwater and it has been unable to predict who will lose their job. Instead of this flawed system, we would suggest a national long term financial education and credit counseling program be mandated as a condition for future homeownership for those who seek to qualify for the $5000 annual homeowner subsidy or the 4.5% “plain vanilla” mortgage.



Marcia Griffin

President, HomeFree-USA


Faith Bautista

Founder and CEO, Mabuhay Alliance





Ensuring that the President’s Anti-Foreclosure Policies Are Effective

The American Banker


The Center for Responsible Lending contends that within the next five years there will be thirteen million additional foreclosures, plus the almost five million since the recession began. Yet, President Obama in his 71-minute State of the Union address puzzled home counselors across the nation by failing to mention, even fleetingly, the growing foreclosure crisis.


As a result of mounting criticism from community groups and some Congressional leaders, the President recently made an announcement with Senator Harry Reid in Henderson, Nevada that he would support a creative, albeit grossly underfunded, homeowner relief program. It provides for 1.5 billion dollars to address homeowners deeply underwater and/ or unemployed in five of the hardest hit states: California, Florida, Michigan, Arizona and Nevada.


Many believe this will be sufficient for Nevada’s over 100,000 families facing foreclosure, but hardly sufficient for the 1.5 million families in California who could face foreclosure, much less those in the other three designated and distressed states.


Our HUD-approved nonprofit counseling intermediaries focus on and serve three of the five hardest hit states, Florida, California and Nevada and will be urging the President, Congress and regulators to take a number of additional actions consistent with the Presidents’ campaign promises.


Our suggestions are in the context of a failed HAMP program. This program has so far produced only a 3% permanent home modification rate among the expected four million home owner beneficiaries (116,000 permanent modifications). This failure has occurred, despite 75 billion dollars in federal subsidies to the servicers to modify loans for homeowners in distress.


In accordance with the President’s campaign promises, we urge strong support for Senator Durbin’s bankruptcy reform that would provide judges with authority to substantially reduce principal amounts. We will also advocate for the major foreclosure moratorium the President raised during his campaign and have it apply to all homeowners who have lost their jobs since January 1, 2009.


Consistent with the President’s campaign praise of Main Street community organizers, we will seek to have the Administration match the recent 1.5 billion dollar foreclosure program designed mainly to assist Nevada by allocating 1.5 billion dollars in unused TARP funds to HUD-approved home counselors, the true community organizations protecting embattled homeowners. This amounts to approximately one thousand dollars each for 1.5 million homeowners most likely to be saved by effective home counseling. (This is only half the two thousand dollars the Administration is presently providing as incentives for servicers to accept short sales.)

To further encourage principal reduction, we will be submitting to the President a plan to reduce principal to the fair market value of homes where families are underwater with a unique provision to allow servicers to recover half or more of any future appreciation. (The servicer percentage would depend, in part, on how deeply underwater families are.)


As counselors, we do not advocate that the 4.5 million homeowners deeply underwater just “walk away.”


However, a growing number of experts are recommending this remedy. This is a remedy that many wealthy investors exercise when their investments go sour. This recently occurred when Tishman Speyer walked away from its 4.4 billion dollar debt in Stuyvesant Town, New York.


To minimize homeowners “walking away,” we also urge the administration to:

  • allow homeowners deeply underwater to remain in their home as a tenant with a future option to repurchase. Fannie Mae and Freddy Mac are developing such models, although they are not yet comprehensive enough to effectively address the problem;
  • consider the GSE models of working with HUD -approved nonprofit counselors to directly assist the borrowers. With appropriate financial support, comparable to what is provided to the servicers, we are confident that home counselors will well exceed the embarrassingly low 3% permanent loan modification record of servicers; and
  • -GSE’s have data that many banks took advantage of borrowers and are returning these predatory mortgages to the originators. The President should require that this information be made available to borrowers so that they can negotiate or renegotiate fair loan modification plans.


The public and Congress have been very supportive of Paul Volcker’s reemergence as the President’s leading financial institution advisor. Perhaps the public would be similarly pleased should the President, in considering these options, consult with Main Street’s champion, Sheila Bair. (The FDIC’s principal reductions and use of HUD-approved home counselors has so far been the only even partially successful administration model.)



Marcia Griffin

President, HomeFree-USA


Faith Bautista

Founder and CEO, Mabuhay Alliance



Could Goldman Sachs Do to California What It Did to Greece?


Recent reports that financial legerdemain engineered by Goldman Sachs helped destabilize the Greek economy ought to make Californians nervous. It’s time to ask if Goldman could do to us what it appears to have done to the Greeks and, indirectly, to the rest of Europe.

In February, major news organizations reported that the Federal Reserve Board is investigating the role that Goldman – a major recipient of federal bailout funds during our own financial meltdown – played in the Greek debt crisis. The firm used complex financial instruments called “derivatives” to help the Greek government hide the fact that it was in debt up to its eyeballs and getting in deeper.

That, in turn, allowed Greece’s participation in the Euro, Europe’s common currency, under what may have been false pretenses. “One deal created by Goldman Sachs helped obscure billions in debt from budget overseers in Brussels,” the New York Times reported. The deal, “hidden from public view … helped Athens to meet Europe’s deficit rules while continuing to spend beyond its means.”

There are reasons to be nervous about California’s entanglement with Goldman, which has been a major participant in bond sales to finance our state’s ballooning deficit.

For example, the Los Angeles Times reported in November 2008 that Goldman had urged some of its biggest clients to place investment bets against the very California bonds that it had helped sell. Such actions could increase investors’ fears about the state’s credit, officials told the paper, thereby driving up the interest rate the state must pay to sell the bonds, increasing the cost to taxpayers.

More recently, Bloomberg News reported that a $4.5 billion state bond offering, handled by Goldman, Citigroup, and JPMorgan Chase, fizzled last October, bringing in less money and costing the state more in interest than anticipated. The state had chosen to forego competitive bids in giving the deal to the trio of companies – which, according to Bloomberg, “made 12.4 million on the deal, contributing to record bonuses in the securities industry a year after getting a total of $80 billion in a federal bailout.”

It is time for the legislature to hold an investigatory hearing into the possible risks of California’s relationship with Goldman Sachs. Legislators should ask some basic questions: Just how much exposure does the state have to Goldman? Has the firm been transparent about any counsel it has provided to the state regarding finances?

At the same time, officials might ask why Goldman is happy to profit from our bond business while refusing to invest in California’s needs. In a February 2 meeting with  the Greenlining Institute, the company claimed that it does not do business in California and therefore does not intend to invest in California in the foreseeable future – even as it is developing a major program of community development and investments in New York.

That seems an odd statement in light of the firm’s considerable California bond business. In fact, in 2008, about seven percent of Goldman’s global business could be attributed to California operations. In dollar terms, that means our state contributed about $2.1 billion to the company’s profits from 2006 through 2008.

All major banks doing business in California have substantial community reinvestment commitments aimed at low and moderate income communities. Bank of America, for example, has committed half a trillion dollars to Community Reinvestment Act programs in California over 10 years. Goldman, which managed to pay $11 billion in bonuses during the financial crisis year of 2008, has committed zero.

Something looks wrong here. It’s time for officials to ask some serious questions about California’s relationship with a firm whose track record can only be described as disturbing.



Faith Bautista, President and CEO of Mabuhay Alliance, Inc.

Preeti Vissa, Program Manager of Community Reinvestment, The Greenlining Institute




Faith Bautista (619) 252-1898,

Rhea Aguinaldo (858) 449-6701,



Foreclosure Prevention Clinic with JPMorgan Chase and Mabuhay Alliance to Help Distressed San Diego Homeowners

Mabuhay Alliance will be conducting a foreclosure clinic on Tuesday, March 2nd from 10:00 am to 4:00 pm with JPMorgan Chase that will focus on President Obama’s February 19th commitment of $1.5 billion to help homeowners facing foreclosure in California and four other states with high foreclosure and unemployment rates.


Faith Bautista has just returned from Washington, D.C. from meetings with key government officials,  such as FDIC Chairman Sheila Bair, and will be discussing how the Administration’s $1.5 billion commitment and major changes in loan modifications could be of special benefit to California, including the more than 50 thousand San Diegans facing foreclosure.


At this clinic, local Chase, WaMu and EMC officials will meet with trained Advisors for free counseling with special forbearances, loan modifications and retention solutions. On-the-spot loan modifications will be done.
Assistance will also be provided for customers of Bank of America, One WestBank, Ocwen, Citibank, HSBC, U.S. Bank, Downey Savings, Saxon Mortgage, Litton Loan Servicing and Wilshire Credit.


In 2009, Mabuhay Alliance, in clinics throughout California and Nevada, has helped five thousand homeowners facing foreclosure or in default through its home counseling and foreclosure prevention offices in five regions of California and Nevada, including San Jose, Daly City/San Francisco and Las Vegas.

Faith Bautista, Executive Director of Mabuhay Alliance said, “The President is to be commended for his $1.5 billion commitment to help homeowners and for urging the Secretary of Treasury to follow homeowners’ advice relating to mortgage foreclosure moratoriums. JPMorgan Chase has been a leader in creative efforts, including their more than 60 home foreclosure centers throughout the United States.


It is Mabuhay’s hope that the Obama Administration, major financial institutions and major nonprofits will join together to prevent the more than fifty thousand pending foreclosures in San Diego and the over one million throughout the state of California.”