By: Molly Cain
Tomorrow, Steven Mnuchin, a Goldman Sachs alum and Donald Trump’s pick for Treasury Secretary, will appear before the Senate Finance Committee for a hearing on his nomination. Trump voters should tune in. If they do, they’ll meet a man who made a significant portion of his estimated $620 million fortune by pushing hardworking American families out of their homes.
Mnuchin’s friends in the mortgage industry are now attempting to paper over the pain he caused, and are taking offense to the nickname Mnuchin has earned as the “foreclosure king.” Unfortunately, the crown fits and the facts speak for themselves.
In 2008, with the housing market in freefall and the global financial crisis in full steam, Mnuchin became the chairman of OneWest Bank. Under his leadership, OneWest was accused of pushing borrowers into foreclosure and widespread misconduct in the ways it carried those foreclosures out. In a memo authored by the California Attorney General’s consumer law division, OneWest was accused of “rush[ing] delinquent homeowners out of their homes by violating notice and waiting period statutes, illegally backdated key documents, and effectively gamed foreclosure auctions.” However, no charges were filed.
OneWest also obtained a reputation for taking advantage of, and foreclosing aggressively on, older borrowers. According to the National Consumer Law Center, OneWest moved to foreclose on a 90 year old woman for owing OneWest a mere 27 cents. Far from an isolated incident, there are serious questions about how Mnuchin’s bank aggressively foreclosed on the homes of distressed elderly customers across the country. In fact, OneWest’s reverse mortgage subsidiary, Financial Freedom, was responsible for 39 percent of all the Federal Housing Administration’s reverse mortgage foreclosures from April 2009 to April 2016.
That’s not all. Under Mnuchin’s leadership, OneWest was also accused of discrimination against people of color. Nonwhite residents were offered much fewer mortgages by OneWest, yet made up a vast majority of OneWest’s nearly 37,000 foreclosures. New Republic put it plainly: “Mnuchin’s bank had a particular talent for dispossessing the homes of senior citizens and people of color.”
Mnuchin’s bank was emblematic of bad behavior throughout the mortgage servicing industry following the housing crisis. Major banks across the board skirted the law, aggressively foreclosed on customers, and used their legal and financial resources against the interests of Americans. As a result, an estimated 7.3 million people experienced the pain of losing their home.
Mnuchin owes his fortune to that pain.
In Thursday’s testimony, Mnuchin will offer evasions. For instance, he’ll say that the Department of Housing and Urban Development forced him to foreclose on a 90-year-old woman who owed 27 cents on her mortgage, and he will claim that OneWest was a leader in helping people get loan modifications that put their payments back in their reach. But on both points, the evidence is clear: according to the Department of Housing and Urban Development, OneWest had the discretion to intervene and stop a foreclosure against someone who owed 27 cents. And according to the California Reinvestment Coalition, OneWest was one of the worst at allowing people to modify their loans.
The vote in the U.S. Senate ought to be an easy one.