Just three days away from his confirmation hearing, Donald Trump’s pick for treasury secretary, Steven Mnuchin, faces a formidable sea of doubt — among Senate Democrats and beyond — in respect to his tenure as CEO of Pasadena-based OneWest bank in the years following the housing crisis.
His critics and fair housing advocates have long pointed to OneWest’s aggressive tactics in foreclosing on homeowners, but a memo recently leaked to the Intercept suggests that the bank went as far as violating state foreclosure proceeding laws.
By examining a limited number of loans through county records, the California Attorney General’s consumer law division deduced that OneWest forced delinquent homeowners out of their homes by illegally backdating key documents, violating notice periods, refusing to comply with state subpoenas, and unlawfully bidding on properties at foreclosure auctions.
The authors of the memo, leaked anonymously to the Intercept, recommended that Attorney General Kamala Harris file a civil enforcement action against OneWest, in which the state would seek millions of dollars in penalties and injunctive relief.
The memo found that nearly 1,000 OneWest documents that were dated before the bank became operational, and deduced that OneWest fabricated the dates on documents related to notices of default, effectively speeding along California’s foreclosure process, which lacks judicial oversight.
OneWest, which sold to CIT Group Inc. for $3.4 billion in 2015, also unlawfully bid on properties at foreclosure sales despite not being the current owner of the mortgages, thereby evading transfer taxes, the memo found. It’s unclear why Harris ultimately decided against prosecuting the case.
OneWest is also the target of a housing discrimination lawsuit, in which two advocacy groups claim the bank discriminated against black and Hispanic borrowers in California. Senate Democrats are now encouraging homeowners and their families directly effected by OneWest’s practices to testify during Mnuchin’s hearing Thursday.
“Before deciding whether Mr. Mnuchin should serve as the country’s top economic official, the committee should hear from some of these families and other Americans who have had first-hand experience with Mr. Mnuchin or the businesses he has led,” 25 Senate Democrats wrote in a letter to Senate Finance Committee Chairman Orrin Hatch (R-Utah) last week. [The Intercept] [The Hill] — Cathaleen Chen