Mnuchin’s Bank Foreclosed on Thousands of Homeowners, but: ‘I’m Proud of our Results’
by Bryce Covert –
Steven Mnuchin came under fire during his confirmation hearing for numerous complaints against OneWest.
At Treasury Secretary nominee Steven Mnuchin’s Senate hearing on Thursday, Democratic lawmakers repeatedly brought up the foreclosure practices of the bank Mnuchin previously ran, OneWest.
During one particularly heated exchange, Sen. Sherrod Brown (D-OH) aired a laundry list of complaints that were made about OneWest’s practices while Mnuchin was CEO.
Brown cited the assertion by the community group California Reinvestment Coalition that the bank foreclosed on 60,000 homes across the country and denied three-quarters of borrowers’ applications for loan modifications so that they could avoid foreclosure and stay in their homes. He brought up a consent order that OneWest entered into with the Office of the Comptroller for the Currency (OCC) over “errors that resulted in financial harm.” This included 10,781 loans the OCC determined needed to be remedied, including 23 foreclosures on borrowers who weren’t actually in default on their loans and 54 that violated the Servicemembers Civil Relief Act by foreclosing on active duty military families.
At one point, Mnuchin cut in to defend the practices, saying he followed loan modification procedures imposed on the bank by the Federal Deposit Insurance Corporation and that while it was “unfortunate” and “inappropriate” that the bank foreclosed on military members, it compensated the families.
“I’m proud of our results,” he said.
Brown went on to bring up a leaked memo written by top prosecutors in the California attorney general’s office from 2012 that outlined evidence that the bank broke California foreclosure laws. Officials found that the bank frequently backdated documents illegally to speed up the foreclosure process, among other violations. It also said that OneWest officials stymied the officials’ investigation.
The senator also mentioned a OneWest employee who said in a 2009 deposition that employees were forced into “robo-singing,” or singing off on foreclosures without adequately reviewing or verifying information.
Other complaints have been brought against the bank that Brown didn’t mention. The California Reinvestment Coalition recently filed a lawsuit with the Department of Housing and Urban Development (HUD) accusing it of redlining by rarely lending to people of color and operating few branches in their neighborhoods. Its reverse mortgage unit, which makes loans typically to elderly homeowners who borrow against their home’s equity, is under investigation by the Department of Housing and Urban Development’s (HUD) Office of Inspector General.
Mnuchin defended the bank’s practices by saying that it offered restitution and corrected errors in any cases where it was found to have wronged borrowers. But the bank may not have been held accountable for all of its actions. Even though the California officials who wrote the memo about OneWest breaking the law advised that the attorney general bring a case against it, then-Attorney General Kamala Harris, now a senator, declined to do so.