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, faith@mabuhayalliance.org

Rhea Aguinaldo (858) 449-6701, rhea@mabuhayalliance.org



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.”


Obama Job Summit in Chicago December 5th: One Trillion Dollars to Create Ten Million Jobs

In response to President Obama’s December 3rd Jobs Summit and Valerie Jarrett’s request for community groups to hold job summits in their communities, the Philippine American Chamber of Commerce of Greater Chicago and Mabuhay Alliance conducted a job summit on December 5th at the Wyndham O’Hare Hotel in Rosemont, Illinois.

Over 260 community leaders, primarily from the greater Chicago residents attended this summit and its workshops on job creation.

By an overwhelming percentage, the participants (small business and professionals) supported expending up to one trillion dollars to create ten million new jobs (72% in favor). Attached is the survey provided to the 260 people at the Chicago small business job summit.

By an even larger margin, these leaders supported the expenditure of $100 billion in unused TARP funds to expand credit opportunities to small businesses in order to create more jobs (92% in favor of this).

Regarding the pressing issue of unemployment and foreclosures, the group overwhelmingly supported permitting the unemployed facing foreclosure to stay in their homes and pay rent rather than face foreclosure (98% in favor of this).

Further, 97% urged President Obama to hold a Main Street job summit in Chicago.

Almost two-thirds of the participants (64%) said they voted for Obama.

Cornelio R. Natividad, President of the Philippine American Chamber of Commerce of Greater Chicago said, “We are proud that we in Chicago are the first in the nation to respond to Valerie Jarrett’s request for local job summits. We look forward to working closely with Valerie Jarrett and the President on creating up to 10 million new jobs, including those through small business development.”

Faith Bautista, Executive Director of Mabuhay Alliance, a national organization representing 15 million Asian Americans said, “When Chicago speaks, the President should listen. Americans, including 25 million small business owners, want jobs and credit. If 40% create even one new job each, we’d reach the goal of 10 million new jobs.”


Faith Bautista, President/CEO




Rhea Aguinaldo


Meaghan Guerrero




Filipino American Business Opportunities, a Conference on the Opportunities in a New Financial and Internet Era: December 5th at Wyndham O’Hare Hotel in Rosemont, Illinois

Mabuhay Alliance jointly with the Philippine American Chamber of Commerce of Greater Chicago (PACCGC) and the Federation of Philippine American Chambers of Commerce (FPACC) will be holding a unique national conference in Chicago designed specifically for future business opportunities for the Philippine and other Asian American communities.  The conference will begin at 1:00 p.m. and end at 4:00 p.m. and will be held at the Wyndham O’Hare Hotel at 6810 North Mannheim Road, Rosemont, Illinois 60018.  Admission to this portion of the conference will be free.  There will also be a gala dinner at 6:30 p.m. at a cost of $65.00.

The conference is entitled, “Asian American Small Business Opportunities in the Age of a New Financial and Internet Paradigm”.  A number of financial institutions and Federal banking regulators will be participating.  Sandra Thompson of the FDIC has been confirmed as the keynote speaker for the dinner gala and is expected to also participate during the afternoon panel on business opportunities. Similar participation is confirmed by the Federal Reserve and the Office of Thrift Supervision.  It is also expected that a number of major financial institutions both national and local will be participating, as well as a number of corporations leading the internet revolution, such as AT&T and Verizon.  Please confirm with Cindy Flores for your admission to the afternoon panel and seminar.  Attendance is limited to 500.  Please confirm for dinner which is limited to 300.

Background: The Filipino American business community receives less than one dollar per fifty thousand dollars in federal contracts and generally less than one dollar per every fifty thousand dollars expended by Fortune 500 corporations.  Mabuhay Alliance has led the effort in California to help increase this amount by at least ten times.  For example, many companies doing business in California that have been the subject of Mabuhay’s efforts to provide 5-10% of their contracts to Asian Americans.

With rare exceptions, Filipino Americans are not at the most senior management levels at Fortune 500 companies.  And of the more than 6,000 members of the board at Fortune 500 corporations only an invisible two are Filipino American.  Mabuhay Alliance is attempting to change this nationally, and will have a special focus on Illinois based corporations

Studies have demonstrated that Filipino Americans have received less than one dollar for every one thousand dollars in philanthropy by foundations and many corporations.  But some corporations, such as Verizon and AT&T provide a large percentage of their philanthropy to Filipino American nonprofits.

Mabuhay is attempting in its efforts with the Federal Communications Commission, the U.S. Department of Justice’s antitrust and civil rights divisions, the FTC and the FDIC (which regulates over 6,000 banks) to require diversity in business opportunities, and philanthropy.  This model has been successfully implemented in California by Mabuhay Alliance.


Home Foreclosure Crisis Showdown in D.C. Led by San Diego’s Mabuhay Alliance

On Tuesday, November 17th, Mabuhay Alliance and 25 major HUD-approved nonprofit home foreclosure organizations will be meeting with four major banks, Bank of America, Wells Fargo, JP Morgan Chase and Ocwen to present their Magna Carta or Bills of Rights for homeowners facing foreclosure. The press release they will be issuing tomorrow is attached with the six Magna Carta principles. This includes a one-year Foreclosure Moratorium for all unemployed homeowners.

The next day, November 18th, Mabuhay and HomeFree-USA will be joined by 100 homeowners for a protest demonstration and press conference outside the Secretary of the Treasury’s office. They will be criticizing his preference for Goldman Sachs over Main Street homeowners. They will then march to the White House and seek to meet with President Obama’s Chief Economic Advisor, Larry Summers.

Mabuhay Alliance also has meetings on November 16th with the leadership from the Federal Reserve, FDIC, Freddie Mac and HUD on the home foreclosure crisis and its Magna Carta for homeowners.

The Executive Director of Mabuhay Alliance Faith Bautista and Deputy Director Mia Martinez will be available for interviews at their Mabuhay home counseling office at 2:00 pm tomorrow Friday, November 13th. A number of staff members doing home counseling for San Diego residence facing foreclosure will also be available.


Mia Martinez, Deputy Director
Rhea Aguinaldo, Media Outreach

Main Street’s bi-partisan suggestion on Obama’s Health Care Reform

by Robert Gnaizda & Elaine Soliven


THIS week (September 9), president obama will address Congresson the need for a controversial health care reform package that maynot achieve his objectives. our message to the president is that thevast majority of American communities are underserved by presenthealth care practices and insurance coverage. Many of these communitiessupported president obama’s election and initially supported his health care reforms.

Many now have concerns that the president’s “heroic” efforts tobring to America what Europe has had for two to four generations may not occur without debilitating compromises that we may all regret.

We have no doubt that health care reform is immediately necessary.However, we are dubious that it will occur in a fashion that willbe satisfactory to the 47 million Americans who are uninsured, the50 million Americans who are underinsured and 300 million Americanswho are contributing close to $2.4 trillion a year for one of theworld’s most inefficient health care systems among developed nations.

From Main Street, we offer to the president and the leaders ofCongress eight practical and possibly bi-partisan suggestions thatwould have the overwhelming support of Americans, even if they opposeuniversal health care coverage. They are likely to sail throughCongress or be implemented by the president without Congressionalassistance by July 4th of next year.

A key suggestion is dump the “sweetheart deal” with the pharmaceuticalindustry. its support for the ill-fated health care reformbill is not worth the price. We can save $1 to $2 trillion over thenext ten years primarily by a series of presidential executive ordersand actions that require no Congressional approval. The easiest actionwould be for the president to use his bully pulpit and executivepowers to demand that the pharmaceutical industry provide to allAmericans prescription drugs at the lowest price offered in any developednation, such as Canada, Great Britain or France. This wouldcut present drug costs from $236 billion annually to below $120 billionsince most prescription drugs sell for one-third or one-half theUS price in other developed countries. over ten years, this wouldproduce a savings up to $1.2 trillion. This is fifteen times more thanthe projected savings from the $80 billion “sweetheart deal.”

Similarly, the president should use his executive powers to convincehis newly-appointed chairs of the FTC and his anti-trust divisionchief to exercise America’s often underused anti-trust powersagainst the pharmaceutical industry during mergers and acquisitions.For example, half or more of many pharmaceutical companiesso-called “research and development” is used for other activities,such as enticing university researchers and physicians into promotingtheir products. The proposed pfizer/Wyeth, and Warner Chilcott/p&G acquisitions would be good places to start.

To further lower health care costs, the president should seek a bipartisanbill, likely to be supported by the highly influential Republican Senator Grassley, that would eliminate the $13 billion a year indirect federal tax subsidies to so-called nonprofit hospital that fail tocare for the poor. A recent study shows that 60 percent of the averageso-called “nonprofit” hospitals with tax subsidies offer less than5 percent of their patients free or low cost service. Many of the mostexpensive problems for the uninsured could be addressed withoutcost if hospitals were required to provide 20 percent of their servicesto indigents in order to be tax exempt.

A fundamental problem in cutting health care costs, which are often twice as expensive in the US as in Canada or Europe, is caused by“fee-for service” physicians who control most of the delivery of our$2.4 trillion health care system. Health care costs could be substantiallyreduced if doctors were on salary, as are virtually all of our 2.9million nurses and as are physicians at many health insurers such as Kaiser permanente. Doctors on a “fee for service” basis should be aluxury, not the standard for 21st century cost efficient practices.

Another major reform that is long overdue is empowering America’s2.9 million nurses, particularly those with advanced training,to perform a wide range of medical services that are now part of anoften unnecessary physician monopoly. This should be a conditionfor any federal funding and is likely to slash physician costs by 25 to50 percent and increase the quality of services.

There are many other cost-cutting devices that the president coulddevelop a bi-partisan consensus on. For example, expenditures fornonprofit health care clinics and a major preventive effort to cut obesityby 50 percent which alone could save over $750 billion over thenext decade since in 90 percent of the cases obesity is preventable.


Robert Gnaizda is a former California Director of Health and Counsel for the Black EconomicCouncil.

Elaine Soliven is the President of the San Diego Filipino American Nurses Association of SanDiego County, Inc. a part of a national network of 180, 000 Filipino American nurses