Mnuchin is a highly paid gopher. He has made his money not by his business acumen but by his willingness to do anything for money. That included putting himself on the front line of one piece of the greatest economic crime in human history.

Nominating him for Treasury Secretary is a direct slap in the face of tens of millions of Americans who suffered grievous losses as a proximate result of illegal activities by the Wall Street banks. He will only do what his bank clients tell him to do. He will only say what they want him to say.

Listen to the Last Neil Garfield Show at

Get a consult! 202-838-6345 to schedule CONSULT, leave message or make payments.


Memo Shows Evidence of Illegal Foreclosure Practices at OneWest Bank While Steven Mnuchin was CEO

CA Attorney General Staff Cited Evidence Suggesting “Widespread Misconduct”; Groups Call for Senate Investigation Prior to Confirmation Hearings

WASHINGTON, DC, Jan. 3, 2016 – A 2013 memo written by attorneys in the Consumer Law Section from the California Attorney General’s office is raising new concerns about the track record of OneWest Bank, and the ethics of its former CEO, Steve Mnuchin, who has been nominated to be Treasury Secretary by President Elect Donald Trump. David Dayen first reported on the memo earlier today in an article in the Intercept.

The memo is based on a preliminary investigation by staff at the Attorney General’s office and was triggered by an earlier settlement by the bank with its banking regulator, “together with consumer complaints and the large volume of foreclosures conducted by OneWest.”

The memo focused on a number of fraudulent practices that OneWest was alleged to have engaged in, including:

1) Backdated foreclosure notices of default and other documents and had them notarized in order to “paper over misrepresentations, including cases the attorneys identified where bank staff had backdated documents to dates prior to OneWest’s existence.  In the case of the notices of default, the Attorney General staff asserts that if OneWest had corrected these errors, this would have delayed the foreclosure process.  In addition, OneWest filed these foreclosure notices with county recorders throughout the State which could subject OneWest to a felony charge under state law.

2) OneWest made and directed unlawful credit bids at foreclosure sales.  According to the Attorney General staff, unlawful credit bids may “freeze out other potential bidders (which could include a borrower or his family).”

3) Due to the unlawful credit bidding OneWest claimed an exemption from the applicable city and county transfer taxes and no tax was paid. [EDITOR’S NOTE: QUI TAM ANYONE?]

4)  Performed other acts in the foreclosure process without valid legal authority; and

5)   OneWest Trustees, acting on behalf of OneWest, failed to provide due process to families by speeding up the foreclosure process and timeline.

Impact on Homeowners: The memos of the author explain what the bank’s alleged practices meant for homeowners facing foreclosure:

“As reflected in the examples cited above and appended hereto, in many instances, OneWest’s false filings and unauthorized conduct in the course of the foreclosure process harmed homeowners by denying them timely and important information about their foreclosures and potentially shortening the amount of time they had available to find a way to become current on their mortgage obligations.”

Consumer advocates expressed outrage and urged a full investigation prior to any votes on Mr. Mnuchin’s nomination later this month.

“Where’s there’s smoke, there’s fire, and the American people deserve a full explanation of these serious charges of fraud. Mr. Mnuchin and OneWest Bank need to turn over all of the evidence they previously obstructed so that their banking regulators can conduct a thorough investigation into these serious charges prior to any hearings about Mr. Mnuchin serving as our next Treasury Secretary.  If Mr. Mnuchin’s bank wasn’t engaged in illegal behavior, why did they try and obstruct the Attorney General’s staff?” asks Paulina Gonzalez, executive director of the California Reinvestment Coalition.

The authors of the memo recommended that the Attorney General authorize a civil enforcement action against the bank, which did not happen. In citing challenges with filing the case, the authors of the memo cite concerns about federal bank regulators pre-empting their authority. OneWest and Wells Fargo have both raised pre-emption as defenses in legal cases related to the banks not complying with California’s Homeowner Bill of Rights law. The attorney general had previously filed amicus briefs arguing against OneWest’s position that it was not subject to the Homeowner Bill of Rights.

Additional Context: Senators are still missing key information about Mr. Mnuchin, OneWest Bank, and Financial Freedom:

As part of its earlier merger with CIT Group, consumer advocates had asked for more information about OneWest’s track record which the bank refused to provide, including information about:

1)      Total number of national foreclosures conducted by OneWest Bank and Financial Freedom (reverse mortgages) after Mr. Mnuchin and his group of investors bought the failed IndyMac, First Federal, and La Jolla Banks.

2)      HUD OIG Investigation: CIT Group, which acquired OneWest Bank in 2015, disclosed to investors that it had received subpoenas from the Office of the Inspector General at HUD related to Financial Freedom’s servicing of reverse mortgage loans. The investigation appears to be ongoing, and likely covers a timespan when Mr. Mnuchin was at the helm of OneWest.

3)      Modification and foreclosure data: While a spokesperson for Mr. Mnuchin suggested to the Washington Post that OneWest had made “over 101,000 modification offers,” advocates question how many of those modifications provided substantial enough payment relief that a homeowner could retain the home, and how many modified loans subsequently went into default, especially if the original modification didn’t provide a sustainable solution for the homeowner. Because 2/3 of OneWest foreclosures in California occurred in majority minority communities, advocates also suggest the bank should provide data about the extent to which homeowners of color received sustainable modifications, data which the bank likely already provided to the Treasury Dept.

4)      Settlements and Court Cases: During the past six years, OneWest Bank and its subsidiary, Financial Freedom, have lost multiple lawsuits and/or agreed to settlements with homeowners for illegal lending, servicing, and foreclosure practices.  However, the bank has never provided a comprehensive picture of these lawsuits and settlements which could help senators better understand Mr. Mnuchin’s leadership at the bank.

Example OneWest Settlement: OneWest Bank agreed to pay Greg and Irene Rigali, from San Luis Obispo, California a seven figure settlement after the bank foreclosed on the homeowners at the same time the homeowners were attempting to obtain a modification, a practice known as “dual tracking.” For more, see: CalCoastNews: “OneWest Bank pays 7 figures in mortgage fraud case.”

The California Reinvestment Coalition (CRC) has been advocating for fair and equal access to credit for all California communities since 1986. Over its 30 years, CRC has grown into the largest state community reinvestment coalition in the country with a membership of 300 nonprofit organizations working for the economic vitality of low-income communities and communities of color. Among our members are a diverse set of organizations including nonprofit housing counselors, consumer advocates, community organizers, legal service providers, affordable housing developers, small business technical assistance providers, and more.

10 Responses

  1. Perhaps Trump had it in mind that some of this would come out on these guys during appointment hearings, just prior to exiting stage right. One can hope.

  2. iwantmynpv — that’s the problem — these loans were NEVER on the bank’s balance sheets. In order for securitization to be valid, the loans must FIRST be on the balance sheet. Off balance sheet conduits were just a shell. Why wasn’t this disclosed to the public? Understand the Fed had to clear up the mess, but public did not get full disclosure. Mr. Mnuchin is likely aware of this — He was a distressed debt buyer — not an asset buyer.

  3. To all. I received a reply from Steve Berman’s office about joining the class action on the racketeering claims where banks use in house mods to charge interest and fees that are higher than HAMP. The paralegal sent out a group reply that mr berman advises parties to seek local representation since the class action can take years. Go to his website via google to get the link for consumer protection attorneys

  4. Anon, the fed was in control… you don’t think all the folks that bought GSE bonds would permit their holdings to become worthless. If the treasury and the fed expand credit under the same premise and model as the reserve system banks, what’s the difference. It’s all part of one big balance sheet, much of which is supported by the same crappy tier one assets and hedges that caused the correction in 2008.

    One thing that has escaped the public view this entire election cycle, we owe twenty trillion dollars to the Fed and a bunch of sovereigns… What is the strategy to service the debt in a rising rate environment… tough to roll maturing short terms a point higher, let alone begin to think about about paying this mess down.

  5. This is great if withdrawal occurs. However, we have those in the current administration that have not disclosed what actually happened leading up to and during financial crisis. Perhaps, they can discuss with Mr. Mnuchin, and agree to put forth why nothing has been done in over 8 years. SOL?? Dollar short and a day late. Perhaps, Mr. Mnuchin can help to reinstate despite SOL, and help disclose what really went on — because, truth has not yet been told. Wilbur can help too. But, let’s see why it was never pursued – to begin with. Who was in control?

  6. Hope Trump would realize that to make America great again, people in this country need to have home. When we went to Washington D.C. a few months ago, we were shocked to see people living under tress in our nation’s capital. This is not what a developed nation such as America should be. These news get around the world so soon in this information highway age. The result would be lack of respect for Americans in the world or they may think that we are a bunch of losers with propaganda. This is not good for our nation.

  7. Deadlyclear ,

    Agreed , Ross needs to go … I have all the evidence ,, some developed by me , some by WF and some by AIG … all of it now in the public record and from unimpeachable sources … that shows that Wilbur Ross knowingly foreclosed on people when he had absolutely no standing to do so. will speak with anyone in authority to take any kind of action.

    We need someone with high morals in that post , not a scumbag bottom-feeding junk debt buyer that sidesteps every law the courts allow him to avoid.

  8. Reblogged this on Deadly Clear and commented:
    Just one question… where are the objections to corrupt Wilbur Ross?! If Mnuchin is the foreclosure King – Ross has to be the great foreclosure Emperor. Neither of them should be serving in the cabinet. Like it or not, the majority of the folks electing a Trump were from the highest foreclosure rate states – and considered slime like these guys and what appears to be their fraudulent actions part of the swamp.

  9. Just one question… where are the objections to corrupt Wilbur Ross?! If Mnuchin is the foreclosure King – Ross has to be the great foreclosure Emperor. Neither of them should be serving in the cabinet. Like it or not, the majority of the folks electing a Trump were from the highest foreclosure rate states – and considered slime like these guys and what appears to be their fraudulent actions part of the swamp.

Contribute to the discussion!