KeNo's Housing and Economic Portal: Saturday December 5 Housing and Economic stories

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Genentech Lobbyists’ Ghost-Wrote Health Care Talking Points for 42 House Members - (www.nytimes.com) In the official record of the historic House debate on overhauling health care, the speeches of many lawmakers echo with similarities. Often, that was no accident. Statements by more than a dozen lawmakers were ghostwritten, in whole or in part, by Washington lobbyists working for Genentech, one of the world’s largest biotechnology companies. E-mail messages obtained by The New York Times show that the lobbyists drafted one statement for Democrats and another for Republicans. The lobbyists, employed by Genentech and by two Washington law firms, were remarkably successful in getting the statements printed in the Congressional Record under the names of different members of Congress. Genentech, a subsidiary of the Swiss drug giant Roche, estimates that 42 House members picked up some of its talking points — 22 Republicans and 20 Democrats, an unusual bipartisan coup for lobbyists. In an interview, Representative Bill Pascrell Jr., Democrat of New Jersey, said: “I regret that the language was the same. I did not know it was.” He said he got his statement from his staff and “did not know where they got the information from.” Members of Congress submit statements for publication in the Congressional Record all the time, often with a decorous request to “revise and extend my remarks.” It is unusual for so many revisions and extensions to match up word for word. It is even more unusual to find clear evidence that the statements originated with lobbyists. The e-mail messages and their attached documents indicate that the statements were based on information supplied by Genentech employees to one of its lobbyists, Matthew L. Berzok, a lawyer at Ryan, MacKinnon, Vasapoli & Berzok who is identified as the “author” of the documents. The statements were disseminated by lobbyists at a big law firm, Sonnenschein Nath & Rosenthal. In an e-mail message to fellow lobbyists on Nov. 5, two days before the House vote, Todd M. Weiss, senior managing director of Sonnenschein, said, “We are trying to secure as many House R’s and D’s to offer this/these statements for the record as humanly possible.” He told the lobbyists to “conduct aggressive outreach to your contacts on the Hill to see if their bosses would offer the attached statements (or an edited version) for the record.” In recent years, Genentech’s political action committee and lobbyists for Roche and Genentech have made campaign contributions to many House members, including some who filed statements in the Congressional Record. And company employees have been among the hosts at fund-raisers for some of those lawmakers. But Evan L. Morris, head of Genentech’s Washington office, said, “There was no connection between the contributions and the statements.” Mr. Morris said Republicans and Democrats, concerned about the unemployment rate, were receptive to the company’s arguments about the need to keep research jobs in the United States. The statements were not intended to change the bill, which was not open for much amendment during the debate. They were meant to show bipartisan support for certain provisions, even though the vote on passage generally followed party lines. Democrats emphasized the bill’s potential to create jobs in health care, health information technology and clinical research on new drugs. Republicans opposed the bill, but praised a provision that would give the Food and Drug Administration the authority to approve generic versions of expensive biotechnology drugs, along the lines favored by brand-name companies like Genentech.

Obama's Promise: You Can Take It To the Bank! - (www.dailypaul.com) Good video showing how easily politicians can change their mind on making tough decisions after they are elected. Obama's Promise: "I promise you this...I will get our troops home. I will end this war." Obama Promise To End The War, 2007 - "You Can Take That To The Bank". youtube.com — "I will promise you this, that if we have not gotten our troops out by the time I am president, it is the first thing I will do. I will get our troops home. We will bring an end to this war. You can take that to the bank. " - Barack Obama Campaign Promise - October 27, 2007>

Obama's "Affordability" Program Set Up By Lobbyists To Fail - (www.associatedcontent.com) Because of Lobbying in Congress by Lenders and Investors the HAMP Program was Made to Fail. Millions of Americans have lost their homes. Many more could have been save if Obama's administration and Congress had not let lenders have a way out. But thanks to their "get out of jail" card, lenders have found a way not to modify US homeowners. Years ago, when homes were purchased, the bank or lender, owned the mortgage on the property. If the loan got sold the homeowner was notified and the new payment would be posted to the new lender. Today, banks play more the role of a servicer, or collector of the payment for the note, while a pool of investors own the note through another bank. An example of this is Deutsche Bank, who uses Indymac Bank as a servicer for loans. Deutsche Bank themselves are a trustee for the pool of investors that actually own the loans. Confusing right? Many homeowners were excited when they believed that a program was coming out to help them keep their homes. This program known as HAMP, or Home Affordable Modification Program, was a collaboration between Obama's Administration, the US Department of Treasury and Congress. Unfortunately, this program was designed to help the lenders find a way out of not doing the modification. Servicers complained, that they would be in violation of their servicing contracts if they did modifications on homeowners loans and could face possible lawsuits. However, according to a study done by UC Berkley's law school, who looked at contracts, they found that only 8% of them prohibited modifications. About 1/3 said nothing about modifications and the rest has some limits but generally gave most of the authority to the servicers. This was confirmed at the time, earlier this year, by Deutsche Bank's spokesperson, John Gallagher who said, "Servicers are solely responsible for deciding all modifications." according to his interview with for ProPublica. This would soon change once HAMP was approved.

Senate+Teabagger+Lobbyist Health Bill a Windfall for Big Insurance - (www.alternet.org) The Huffington Post’s Sam Stein reports that Goldman Sachs (in the course of performing “God’s work“) did a report analyzing the impact of health reform on Cigna, Aetna, WellPoint, UnitedHealth and Humana. While Stein concludes that insurers would profit from undermining health care reform, the report also points out that a more “centrist” version of the Senate Finance Committee (SFC) legislation would lead to the highest “aggregate revenue growth” for the insurance industry: Should lawmakers further water-down the SFC bill, the industry will stand to profit, the report implies, suggesting that the “bull” case scenario is a reform package that brings in millions of new government-subsidized customers without requiring the industry to pay any new taxes. Industry revenue would grow 6.9% from “more moderation of provisions in the current SFC plan or as a result of changes prior to the major implementation in 2013,” the report states. The report therefore suggests that the insurance industry may actually prefer watered-down reform over nothing. The Wonk Room has more. (Chart courtesy of FDL).

Flood of bank-owned foreclosures to hit Bay Area in 6 months - (www.contracostatimes.com) In a trend that began a few months ago, more Bay Area homeowners in October received a foreclosure notice compared with a year ago while foreclosed homes taken back by banks declined in response to the rollout of loan modification programs. Last month, the three stages of foreclosure activity were at the lowest monthly point since the start of the year, with 5,604 homes in some stage of foreclosure, said a RealtyTrac.com report to be released today. That's a 33.9 percent decrease from September, but 16.7 percent higher from October 2008. But that overall number does not tell the whole story, given that foreclosure notices are rising while the number of foreclosed homes that become

bank-owned properties are falling due in part to the Obama administration's loan modification program launched in March. However, the expected failure of many loan modifications will set the stage for a flood of bank-owned foreclosures to hit the real estate market starting in six months as borrowers fail to keep up with modified payments, said Mark Hanson, head of Menlo Park-based Field Check Group, an independent real estate research firm. "It creates a massive backlog of foreclosures in the foreclosure pipeline. It lowers the number of foreclosures coming out on the other side as (bank-owned properties). What will happen is that 50 to 70 percent of loan modifications will fail," he said. The RealtyTrac report defines the Bay Area as Alameda, Contra Costa, Marin, San Francisco and San Mateo counties. "You've still got underlying cracks in the housing market that are driving foreclosures and it's creating situations where a lot of homeowners are being pushed into foreclosures," said Daren Blomquist, marketing and communications manager for RealtyTrac.com. Some 2,423 homeowners in the Bay Area received a notice of default - the first stage of foreclosure - in October, a 72.1 percent increase from a year ago. Another 2,234 homes that had previously received a foreclosure notice moved to the second stage, or notice-of-trustee sales category, a 37.1 percent increase from a year ago. Another 947 homes became bank-owned, a 46.3 percent decrease, the report said. A notice of trustee sale clears the way for a foreclosed home to be sold at auction. In most cases, the home is not auctioned off to a third-party but ends up being taken back by the bank. Fewer homes being taken back by banks, while the first two stages of the foreclosure process are rising is a pattern being seen in California and many other states, said Blomquist. Loan modification programs are slowing down the number of bank-owned properties, but rising unemployment and loans with resetting interest rates on risky loans continue to drive foreclosure notices. "It does appear to us it is less of a subprime issue and more of an Alt-A mortgage issue," said Blomquist, referring to a type of loan made during the housing boom to home buyers whose credit scores were higher than subprime borrowers, but not as good as prime-rate borrowers.