Tag Archives: foreclosure

Maine robo-signing scandal resurfaces with Treasury nomination

A woman at the center of a foreclosure robo-signing scandal at OneWest Bank in 2009 – and now part of the controversial confirmation hearings for a new Treasury secretary – signed off on mortgage documents in Maine.

The scandal is attracting new attention because Steven Mnuchin, President Trump’s nominee to head the Treasury Department, denied in a Senate confirmation hearing that OneWest, the bank that he headed from 2009 to 2015, engaged in robo-signing. Critics of Mnuchin are hoping that the controversy over robo-signing, along with allegations that the nominee hasn’t revealed all his financial records, might derail his nomination.

Read on.

Mnuchin Lied About His Bank’s History of Robo-Signing Foreclosure Documents

TREASURY SECRETARY NOMINEE Steven Mnuchin lied in his written responses to the Senate Finance Committee, claiming that “OneWest Bank did not ‘robo-sign’ documents,” when ample evidence proves that they did.

Mnuchin ran OneWest Bank from 2009 to 2015 in a manner so ruthless to mortgage holders that he has been dubbed the “Foreclosure King” by his critics.

The robo-signing scandal involved mortgage companies having their employees falsely sign hundreds of affidavits per week attesting that they had reviewed and verified all the business records associated with a foreclosure — when in fact they never read through the material and just blindly signed off. Those records, in many cases, were prepared improperly, but the foreclosures went ahead anyway because of the fraudulent affidavits.

“Did OneWest ‘robo-sign’ documents relating to foreclosures and evictions?” Sen. Bob Casey, D-Penn., asked Mnuchin as a “question for the record”.

Mnuchin replied that “OneWest Bank did not ‘robo-sign’ documents, and as the only bank to successfully complete the Independent Foreclosure Review required by federal banking regulators to investigate allegations of ‘robo-signing,’ I am proud of our institution’s extremely low error rate.”

But even that review – which was not really so “independent,” since the banks hand-picked and paid for their own reviewers – found that nearly 6 percent of the OneWest foreclosures examined were not conducted properly.

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Treasury Pick Steve Mnuchin Denies It, But Victims Describe His Bank as a Foreclosure Machine

TREASURY SECRETARY NOMINEE Steve Mnuchin kicked off his confirmation hearing Thursday with a defiant opening statement, mostly defending his record as CEO of OneWest Bank. He cast himself as a tireless savior for homeowners after scooping up failed lender IndyMac. “It has been said that I ran a ‘foreclosure machine,’” he said. “I ran a loan modification machine.”

But in stark contrast to his fuzzy statistics about attempted loan modifications, the victims of OneWest’s foreclosure practices have been real and ubiquitous.

A TV advertising campaign that’s been running in Nevada, Arizona, and Iowafeatures Lisa Fraser, a widow who says OneWest “lied to us and took our home” of 25 years, right after her husband’s funeral.

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Cuomo will make foreclosure reform a priority — finally

Gov. Cuomo and state lawmakers are finally making reverse-mortgage foreclosure reform a priority this year — following continuing coverage of a crisis by The Post.

Last week, the governor announced plans to provide reverse-mortgage holders the right to a mandatory foreclosure settlement conference with their lender, overseen by the court, just as traditional mortgage borrowers have, and to update regulations to prevent reverse-mortgage foreclosures.

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NY creates “bill of rights” for residents facing foreclosure

ALBANY, N.Y. (AP) New York state has published a “bill of rights” for home owners facing foreclosure.

Democratic Gov. Andrew Cuomo announced the move Wednesday. It’s one piece of a broader effort to help New Yorkers struggling to stay in their homes.

The bill of rights reminds residents that they have the right to stay in their home and the duty to maintain it during the foreclosure process. It also lets residents known they have a right to be properly notified before a foreclosure suit is filed.

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David Dayen on DemocracyNow who exposed a memo that reveals Mnuchin’s bank may have engaged in “widespread misconduct” while foreclosing on homeowners

JUAN GONZÁLEZ: We turn now to Trump’s pick for treasury secretary, Steven Mnuchin, who faces a—who faces scrutiny for his role at OneWest, a bank which has been called a “foreclosure machine” that profited from the collapse of the housing market. On Tuesday, The Intercept reported on a newly obtained memo that reveals [Mnuchin’s former bank] may have engaged in widespread misconduct while foreclosing on homeowners. The memo argued OneWest was guilty of a host of infractions, including backdating mortgage documents to speed up foreclosures and manipulating the results of home auctions, and it urged a top—California’s attorney general then to sue.

AMY GOODMAN: Mnuchin’s hedge fund bought out the failing California bank IndyMac in 2008, renaming it OneWest. Under his ownership, it foreclosed on 36,000 families, particularly elderly residents trapped in reverse mortgages.

For more, we go to Los Angeles to speak with reporter David Dayen, who broke this story for The Intercept. He’s also the author of the book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud.

David, welcome back to Democracy Now! Lay out what you found. Explain what this previously undisclosed memo shows.

DAVID DAYEN: Yeah, so this is a memo from deputies in the California Attorney General’s Office, and it describes a year-long investigation that they conducted into OneWest, finding well over a thousand violations of California’s foreclosure process. California is a nonjudicial state. The courts are not involved in foreclosures. But there are very precise steps that lenders are supposed to take when they foreclose on a homeowner. And OneWest was found to have violated these. It was a somewhat limited investigation, because OneWest is a national bank, and states don’t have the jurisdiction to do widespread investigation of them. But they found over a thousand violations just in this limited investigation. And if they did file a civil enforcement action, there would be a discovery period, where they extrapolated, the deputies, that they could find thousands more violations. So they requested authorization to file this action, and the California Attorney General’s Office did not move on that.

AMY GOODMAN: And the California attorney general, of course, was now the current California senator, right, Kamala Harris?

DAVID DAYEN: That’s right. And she’ll have the opportunity to vote on Steven Mnuchin’s OneWest—or, on his treasury secretary nomination. Mnuchin actually was a donor to Kamala Harris as recently as February 2016. He gave $2,000 to Kamala Harris’s Senate election campaign. And there’s no real explanation that was given to these deputies as to why Harris decided not to move forward with the case. There’s a lot of speculation. But now we’re seeing sort of the blowback from failing to prosecute these banks and these top executives: Now one is potentially going to be the treasury secretary.

JUAN GONZÁLEZ: And this issue of backdating documents, because, obviously, the mortgage fraud crisis was—there was the original problem of all of the high-interest loans and no-doc loans that were issued, but then, after the collapse, the financial collapse, there were all the banks and financial institutions that came in to so-called clean up the mess and then engaged in massive fraud in terms of documentation of who owned what loan and who had paid back what. Talk about the importance of OneWest in this second stage of the crisis.

DAVID DAYEN: Yes, OneWest was definitely part of that cleanup crew. They were built out of the ashes of IndyMac, which was a failed lender that originated really bad toxic mortgages. And OneWest was brought in, and they engaged in a number of practices to do foreclosures. The backdating scandal here was, they would file notices of default—and that sort of kicks off the foreclosure process here in California—without actually designating what is known as a trustee, that would engage in the foreclosure sale. And so, when they would do that document to designate the trustee, to make it look like the notice of default was done correctly, they would backdate the document. And the way that the deputies at the AG’s Office figured this out is that some of the documents were backdated so far back, it was before OneWest became a bank. OneWest was inaugurated as a bank in March of 2009, and some of the documents had dates before that, that they were executing these what are known as substitutions of trustee before OneWest even became into being.

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Treasury Nominee Steve Mnuchin’s Bank Accused of “Widespread Misconduct” in Leaked Memo

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ONEWEST BANK, WHICH Donald Trump’s nominee for treasury secretary, Steven Mnuchin, ran from 2009 to 2015, repeatedly broke California’s foreclosure laws during that period, according to a previously undisclosed 2013 memo from top prosecutors in the state attorney general’s office.

The memo obtained by The Intercept alleges that OneWest rushed delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions.

In the memo, the leaders of the state attorney general’s Consumer Law Section said they had “uncovered evidence suggestive of widespread misconduct” in a yearlong investigation. In a detailed 22-page request, they identified over a thousand legal violations in the small subsection of OneWest loans they were able to examine, and they recommended that Attorney General Kamala Harris file a civil enforcement action against the Pasadena-based bank. They even wrote up a sample legal complaint, seeking injunctive relief and millions of dollars in penalties.

But Harris’s office, without any explanation, declined to prosecute the case.

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