Steve Mnuchin, President Trump’s nominee for Treasury Secretary, recently told members of the Senate Finance Committee that his former bank OneWest did not use the illegal practice of “robo-signing” when foreclosing on homeowners after the collapse of the housing bubble. However, a new report claims that OneWest repeatedly used robo-signed documents on foreclosures.
For those who have forgotten about the whole robo-signing mess, it refers to the practice of speeding up foreclosures by having non-experts sign hundreds affidavits and other documents without actually reviewing them. These documents usually require a thorough review of someone who is not only well-versed in the foreclosure process, but familiar with the loan.
Many of the nation’s largest banks and mortgage servicers were caught using robo-signed documents to fast-track foreclosures, resulting in billions of dollars in penalties, settlements, and redress for affected homeowners.
As part of Mnuchin’s confirmation process, he responded in writing to questions from individual members of the Finance Committee, declaring that “OneWest Bank did not ‘robo-sign’ documents.”
However, the Columbus Dispatch claims to have found multiple OneWest foreclosures involving Ohio homes that appear to be cases of robo-signing, including three foreclosures that were dismissed by a judge for using inaccurate, robo-signed documents.
One local woman says received a note from a OneWest field inspector declaring that her house was vacant and was to boarded up.
Problem was, not only was the homeowner still living there, but she was not behind on her mortgage payments. What she didn’t know was that OneWest had decided to ignore a loan modification previously granted by a lender that OneWest had acquired. She says it took her five years and a personal bankruptcy before the foreclosure was finally thrown out.
The OneWest employee who signed these foreclosure documents had admitted in a separate lawsuit that she signed some 750 documents a week, while only reviewing about 10% of them for accuracy.
OneWest was known for using a practice called “dual tracking,” which refers to when a bank would simultaneously review a loan modification while moving forward with a foreclosure.
This practice is now heavily restricted, thanks to rules put in place in 2013 by the Consumer Financial Protection Bureau and the Dodd-Frank financial reforms.
Mnuchin has been openly critical of these reforms, telling Senators that it’s time for these laws to be reviewed.
The Dispatch report has helped to rile up opposition to Mnuchin, who is nonetheless expected to be confirmed this week.
“Mnuchin profited off of kicking people out of their homes and then gave false testimony about his bank’s abusive practices,” Sen. Sherrod Brown (OH) said in a statement to the Dispatch. “He cannot be trusted to make decisions about policies as personal to working Ohioans as their taxes and retirement.”
In a statement, Karl Frisch of Allied Progress says, “We already knew that Steven Mnuchin made hundreds of millions at the expense of hardworking Americans and their families. Now we know he lied about his bank’s foreclosure practices during the Senate confirmation process. Rather than taking responsibility for the way he profited off kicking people out of their homes, he blatantly deceived members of the U.S. Senate.”
by Chris Morran via Consumerist