DETROIT BUSINESS MAIN 09-15-08 A 1 CDB 9/12/2008 4:56 PM Page 1 ® www.crainsdetroit.com Vol. 24, No. 37 SEPTEMBER 15 – 21, 2008 $2 a copy; $59 a year ©Entire contents copyright 2008 by Crain Communications Inc. All rights reserved THIS JUST IN MortgageMortgage fraud:crisis Suppliers wait Uncompensated care load increasing for hospitals Reflecting a worsening economy, Michigan’s hos- pitals provided a 61 percent Who’sfallout: to Fraudblame? on $25B federal increase in uncompensat- ed care in 2007, to $2.1 bil- ortgage fraud continues to be a drain on the nation’s lion from $1.3 billion in economy, a byproduct of years of frenetic activity in 2005, according to the Michi- economy, a byproduct of years of frenetic activity in gan Health & Hospital Associ- the home-loan industry, when brokers happily ation, a trade group based happilyprocessed processed what they what called they “liar called “liar in Lansing. M loans,” mail arrived daily offering in- loan program From stantstant home-equityhome-equity loansloans forfor what- 2005 to WEB EXTRA everwhatever you said you yoursaid houseyour 2007, was worth, and finan- For more Michigan house was worth, and Big companies would fund details, go to hospitals cialfinancial institutions institu- from www.crains nearly Walltions Street from Wallto Cal- detroit.com. ifornia figured R&D, small ones see spillover doubled Street to Cali- the out ways to make fornia figured out BY RYAN BEENE fund their new R&D and intro- amount of charity care pro- (and later lose) CRAIN’S DETROIT BUSINESS ductions of new technologies, so ways to make vided, to $209 million from billions from they’re directly interested in the $110 million. Bad debt also (and later lose) Suppliers are watching Wash- charging high same way the Detroit 3 are,” said increased to $605 million billions from ington, D.C., while lawmakers Craig Fitzgerald, a partner and rates to buyers from $439 million. Unreim- charging high mull a program to guarantee $25 auto analyst at Southfield-based bursed costs for Medicare with bad credit. billion in government loans for rates to buyers Plante & Moran L.L.C. and Medicaid remained “There were all the domestic auto industry. Andrea Puchalsky, Lear Corp.’s the same, at about $1.2 bil- thesewith bad excesses credit. The loan program, part of the director of corporate communica- lion. in the“There market- were far-reaching Energy Indepen- tions, says her company is watch- Increasing uncompensat- dence Act of 2007, would make placeall these and excess- the NEWSCOM ing the issue very closely and is in ed care costs pushed down es in the market- $25 billion in loans available for favor of the loan program. Michigan hospitals’ operat- government sat by, watched it all happen, and did nothing automakers and suppliers to in- place and the government sat by, watched it all happen, and “These loans would assist ing margins from 3 percent about it,” said Gibran Nicholas, chairman and president of the vest in research and develop- American automotive compa- in 2005 to 2.9 percent in 2006, Certifieddid nothing Mortgage about it,” Planning said Gibran Institute Nicholas, in Ann chairman Arbor, which and of- ment projects for fuel-efficient nies in making the transition to the last year for which mar- ferspresident training of andthe certificationCertified Mortgage for mortgage Planning professionals. Institute in Ann and low-emissions vehicles, im- more fuel-efficient vehicles and gin data was available. At Arbor“People, which who offers blame training greedy and mortgage certification brokers for miss mortgage the big pro- prove assembly operations and help preserve American manu- the same time, hospitals na- fessionals. expand or build factories geared facturing jobs, ultimately tionally have increased picture. It was like putting candy in front of a baby,” he said. for advanced vehicle production. “People who blame greedy mortgage brokers miss the big strengthening the overall U.S. margins to 4 percent in 2006 Crain’s reporters Tom Henderson and Daniel Duggan Auto industry lobbyists have economy,” Puchalsky wrote in from 3.7 percent in 2005. breakpicture. the It wasnews like of puttingtwo local candy task in forces front of on a mortgagebaby,” he fraudsaid. been pushing hard for the loans, an e-mail to Crain’s. “We would Michigan’s unemploy- beingOn Pagesassembled 25-28 by, Crain’sthe Michigan reporters State Tom Police Henderson and the and FBI. with the Detroit 3 being the most evaluate the need for loans in ment rate has increased in TheyDaniel also Duggan look atbreak two thelawsuits news involving of two local Livonia-based task forces Quick- on visible proponent for the pro- funding our R&D activities to- gram. But suppliers are in the mix the last year, rising to 9.1 enmortgage Loans Inc.fraudthat being illuminate assembled how bythings the Michiganwent wrong State and Po- the ward developing alternative percent in July from 8 per- too, especially large, publicly finger-pointinglice and the FBI. that They results. also look at two lawsuits involving power-distribution solutions to cent a year earlier. Wayne traded tier-one suppliers that fo- meet the changing needs of our County’s unemployment Livonia-based Quicken Loans Inc. that illuminate how things cus on fuel-saving components. customers.” rate crept up to 10.9 percent went wrong and the Seefinger-pointing Pages 25-28 that results. “Their interest is in trying to in July, with Oakland Coun- secure low-cost capital that can See Loan, Page 29 ty and Macomb County at 7.3 percent and 9.5 percent, respectively. Rising unemployment has put pressure on to in- crease outreach programs such as free health screen- Can Book Cadillac be belle of the balls? ings and education, said David Seaman, MHA’s execu- hosted the event last year. The GM Wintergarden tive vice president. In its New hotel booking events; keeping them will be key hosted it prior to the Marriott. 2008 Hospital Community With a soft opening planned Oct. 1 and a Benefits Report, the MHA BY DANIEL DUGGAN raise $2 million. grand opening Oct. 25, the Book Cadillac’s sales collected data from 132 of CRAIN’S DETROIT BUSINESS The spice of having an staff is making sure that every charity event in the state’s 146 nonprofit hos- AREA VENUES event in Detroit’s newest lo- the region has to at least consider the historic pitals. The MHA, however, In the three years Kathy Kauffmann has been Competition for cale outweighs the risk of a hotel. used uncompensated care planning the American Heart Association’s Heart events grows. “It is keeping us on our toes on a daily basis,” Page 32. new operation. and operating margin data Ball, she’s never had to scout a venue with a said Judy Dufour, director of sales and market- “It’s a new thing,” she from the American Hospital hard hat on. ing for the Marriott. said. “But you have to take chances to make a Association and included all But in May, she toured the unfinished Westin While no planner has yet to experience an 146 hospitals. Book Cadillac, stared at sketches and was admit- difference.” event at the Book Cadillac, 14 social events are See This Just In, Page 2 tedly a little nervous about signing on with the The Book Cadillac’s gain was a loss for the charity’s most important event, expected to Marriott at Detroit Renaissance Center, which See Book Cadillac, Page 32 Crain’s 2008 Dauch sets window women to watch, for retirement, NEWSPAPER Page 11 Page 4 DETROIT BUSINESS MAIN 09-15-08 A 2 CDB 9/12/2008 5:19 PM Page 1 Page 2 CRAIN’S DETROIT BUSINESS September 15, 2008 Southeastern Michigan said it has Venture Investors to invest in, of the lease could not be resolved. largest residential brokers with THIS JUST IN awarded more than $4 million in one which she can then join as a The case was settled out of court. $149 million in transactions. grants in its first round of funding C-level executive. — Daniel Duggan — Daniel Duggan ■ From Page 1 to revitalize Detroit neighbor- Her position is jointly funded by Chamber hires senior director hoods extending from the river- Venture Investors and an execu- Residential brokers combine Detroit Make It Here launches front through Detroit’s near east tive-in-residence program funded Two residential real estate bro- The Detroit Regional Chamber side. by the state’s 21st Century Jobs Fund kerages in Brighton are merging Detroit Make it Here (www.detroit- has hired Dan Piepszowski to head The grants are part of the foun- and administered by the Michigan their businesses under the flag of makeithere.com) officially launch- the organization’s new communi- dation’s $15 million Detroit Venture Capital Association. one ReMax franchise. es today. The news, information ty leadership development and Neighborhood Fund. The largest Last year, Venture Investors Effective Oct. 1, the Brighton- and networking hub is designed engagement programs. of the new grants included $1.5 got commitments of $7.5 million based Michigan Group Inc. will take to grow metro Detroit’s creative Piepszowski, most recently a million to New Urban Learning to- each from the state’s Venture over the ReMax franchise which economy. consultant for nonprofit and gov- ward the estimated $15 million Michigan Fund and 21st Century In- has been used by Brighton-based The site, which is powered by ernment agencies, also was previ- cost of the University Prep Sci- vestment Fund, providing it funds ReMax Platinum. Two of the three Crain’s and sponsored by Detroit ously a vice ence and Math High School and to open a local office.