FOR FOUR YEARS during Treasury Secretary Steven Mnuchin’s tenure as chair of OneWest Bank, its reverse-mortgage subsidiary Financial Freedom ripped off the government by receiving unlawful federal insurance payments on reverse mortgages, according to an $89 million Justice Department settlement made public today.
Financial Freedom serviced thousands of government-insured reverse mortgages from 2011 to 2016. According to the settlement, the company repeatedly filed insurance claims with the Federal Housing Administration (FHA), and received interest payments, without following program guidelines. This gave Financial Freedom a critical backstop for reverse mortgages that often harmed borrowers.
“This lender failed to comply with FHA servicing requirements and sought to receive financial gains that it was not legally entitled to,” said Inspector General for the Department of Housing and Urban Development David Montoya, in a statement accompanying the settlement.