National Financial Services Consortium, LLC

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This Consortium is working to keep homeowners in their homes, and to preserve the value of the communities where the impact of foreclosures has been most severe.  The Consortium plan serves to get bad loans off bank books, enabling renewed lending and increased investment.

UPDATE: 

Wall Street Journal, 7/14/2010 -- LOS ANGELES---A partnership between Tom Barrack's Colony Capital LLC and a minority-owned investment firm won the bidding for a $1.85 billion portfolio of distressed commercial real-estate loans auctioned off by the Federal Deposit Insurance Corp.

The deal, the second-largest bulk sale of commercial-property debt under a public-private partnership, is expected to be announced Wednesday by the FDIC. Under terms of the transaction, Los Angeles-based Colony and New York-based Cogsville Group LLC agreed to pay 59 cents on the dollar, or $445 million, for a 40% equity stake in the assets consisting of 1,660 commercial-property loans held by 22 now-defunct banks, including Community Bank of Nevada, First Bank of Beverly Hills and New Frontier Bank.

The FDIC retained the remaining 60% and offered seven-year, zero-interest financing to the Colony-Cogsville group, which reduces the venture's upfront cash input to $218 million.

This deal is the first public-private setup in which a minority-owned firm has taken a stake, albeit a small one, during this economic downturn. Cogsville, an African-American-owned firm, contributed $16 million to the $218 million investment, for a 7% stake in the portfolio.

"The FDIC is encouraging partnerships between large and small firms," said Don Cogsville, a former player on the U.S. national soccer team in 1988 who had worked as a lawyer and an investment banker before forming his own firm in 2007. "We see it as a major opportunity." Barclays Capital advised the FDIC on the auction.
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Over the past year, there have been complaints on Capitol Hill and among smaller financial firms, especially those owned by minorities and women, about the lack of minority-firm participation in various public-private investment programs.

"A lot of minority-owned firms have been angry because they haven't been included in a lot of deals," said William Michael Cunningham, an investment adviser who tracks minority-owned financial firms.

In response, the FDIC started its minority-and-women outreach program this year, conducting seminars to facilitate participation by firms in its asset sales, FDIC officials said. The move also comes as politicians are ratcheting up pressure on regulators and financial firms to boost minority firms' chances of participating in various asset-management and bank-rescue programs sponsored by the government. These programs are expected to generate millions of dollars in management fees and investment opportunities for private companies.
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"You have to qualify and have to have the management and experience to deal with distressed real estate," said Tim Kruse, manager of structured transactions at the FDIC. "You can't be retail investors."

Mr. Kruse said the agency encourages relatively small, minority-owned firms to join with bigger companies to bid for its structured-asset sales via public-private ventures. The FDIC also is tailoring some of its asset sales to specifically target small and minority investors. It has created a portfolio of $181 million of commercial-property debt held by various failed banks that is aimed for these investors. The bidding deadline for the portfolio is July 27.
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The public-private partnership structure is modeled on about 70 such deals pioneered by Resolution Trust Corp., a federal agency formed to clean up the savings-and-loan mess of the late 1980s and early 1990s. Rising property values in the mid- and late-1990s enabled the RTC to reduce taxpayer losses. These structured deals, however, carry additional risk for the FDIC and, by extension, taxpayers. Because the agency takes a big chunk of the equity and provides financing, it stands to lose more if the markets decline.