If you like fixing things, as Moose Scheib does, there’s no better place right now than Detroit. The first major American municipality to file for bankruptcy is home for Scheib. “You grow the tallest where you have the deepest roots,” says the 33-year-old Lebanese-American entrepreneur and activist. He’s the founder and former CEO of LoanMod, a pioneer in the business of mortgage loan modification.
Scheib finds investors for his beleaguered city in the Middle East, and promotes cultural pride as co-founder and chairman of the board of the National Arab Orchestra. “I have actually lived the American dream … so it’s easy to translate that to people in the Middle East.”
His story starts in Beirut. Scheib’s father, Mohamed, was a newspaper editor and the head of Lebanon’s equivalent of the DMV. It was a privileged childhood, with a second home in the countryside, even a stable of horses. But a civil war was also raging. “We used to play in the rubble … among dead bodies in the streets,” he says of his early childhood. Then in 1986, the army came to his uncle’s house, then to Moose Scheib’s family home. Luckily, his father was out, but his uncle was killed in the street. Then the Scheibs left Lebanon for good.
Desperate, they entered America as tourists and simply stayed, resolving their citizenship later. Scheib’s father trained as a long-distance truck driver and the family regrouped, staying with grandparents before getting their own home.
After eight years in Michigan, his father suffered a stroke. “I became the man of the family at 12 years old,” Scheib says. He took over the family finances, as his mother spoke little English. Scheib sold newspaper subscriptions, popcorn and flowers to help make ends meet. He was a hard worker, captain of his football team at Albion College, and graduated from Columbia Law School in 2005. He clerked in the New York State Supreme Court and is still a member of the Connecticut bar. But his stint on the East Coast was cut short by a call for advice from an uncle facing foreclosure. For the first time, Scheib tried — successfully — to make a bank see reasons not to foreclose.
We wanted to help people, be in compliance and make money. The best way seemed to be to teach people to do it themselves.
Amid Detroit’s bankruptcy, Scheib pursues foreclosure mediation. “I like to think about bigger issues in business, how it can benefit the city on multiple levels,” Scheib says. Loan modification gives hope to homeowners facing foreclosure. The idea is to convince a lender that while a client cannot pay the full (often escalating) mortgage, a reduced rate could be manageable. Scheib helps lenders see that the costs of the process, and of “warehousing” empty buildings (the costs incurred by simply owning the building, such as taxes), outweigh the financial benefits of foreclosure.
“What we are witnessing now in Detroit is a tale of two cities,” says Scott Kurashige, a professor of American culture at the University of Michigan. “The foreclosure crisis is often portrayed primarily as a moral failing of irresponsible residents and homeowners. But we must consider the roles predatory lending, discriminatory redlining and racial prejudice have played.”
Backed by the state of Michigan, Scheib's new computer program to help those in foreclosure, known as LoanMD, will be available free later this year. It breaks down the foreclosure process across America, state by state and lender by lender. “Laws are skewed in (the banks’) favor,” Scheib says. “We wanted to help people, be in compliance and make money. The best way seemed to be to teach people to do it themselves.”
The first loan modification company in the United States, LoanMod has saved millions of dollars in avoided foreclosures, and now many similar companies have sprung up around the country.
Salvaging the unsalvageable
“Many parts of the city have been written off by developers and the elites as unsalvageable,” Kurashige says. “These are areas of rapid public and private disinvestment where schools have shut down and services are being cut. However, radical grassroots movements are developing in these spaces of marginality.”
Scheib’s own thinking has expanded, along with Detroit’s. He wants to “help people come here that want to create their own dreams. I felt I could fill a gap.”
While practicing corporate law in Manhattan, Scheib heard of immigration legislation called EB5, by which an individual who opens a business creating employment for a minimum of 10 Americans can acquire a green card along with an investment in a company.
Asked by Michigan’s Governor Rick Snyder to co-chair a talent committee including the mayor of Flint to discuss youth, talent and entrepreneurship, Scheib proposed the use of EB5 legislation to lure bright minds, expertise and wise investors from the Middle East to Detroit. “There’s so much turmoil in that part of the world, it can be a viable and attractive choice for people who want options,” he says.
Now Scheib is setting up a network of brokers in the Middle East to help with the demand for potential immigrant investors. To streamline the procedure, the state of Michigan has applied to the federal government to open a state-run EB5 regional center which is scheduled to open in April of this year, offering an alternative to the existing, privately-owned EB5 brokers. A Michigan EB5 is a bargain, requiring a minimum investment of $500,000 as opposed to the $1,000,000 needed in other states.
“Arabs love American know-how. In Europe, there is more prejudice. Here, you can get ahead on merit and hard work, but in much of the Arab world, you have to have connections. It all came full circle after I made a recommendation to Governor Snyder, and they asked me to help them roll it out in the Middle East,” Scheib says.
“The metro Detroit area has one of the largest Arab populations outside the Middle East, and it is vital to our region,” says State Representative Phil Cavanagh. “Some of my closest friends immigrated from difficult backgrounds, and are now essential members of the community. The mayor and governor have combined efforts to facilitate Arab immigration to Detroit. “
There are risks, of course. “Education and relationship building needs to happen to ensure that even well-intentioned foreign investment doesn't cause more harm than good,” says Professor Kurashige. Scheib’s clients, however, are cosmopolitan expat Arabs used to adapting to new places.
An integral part of Scheib’s activities is his role as co-founder and chairman of the board of the National Arab Orchestra, under the direction of Michael Ibrahim. Moose brought business savvy to what was then a small, aspirational outfit, and has helped develop a growing niche for a music that had been relegated to parties and restaurants. Says Scheib, “Using good music to bring people together excites me.”