Reports: New Treasury Secretary Oversaw “Foreclosure Machine”

The Miami foreclosure defense lawyers at Jacobs Keeley have not been shy with criticism of the current presidential administration, in particular with regards to a failure to hold big banks and executives accountable for their central role in the foreclosure crisis. Unfortunately, it does not seem as if the new administration is going to take any more of a hard line on this kind of issue, despite repeated promises to “drain the swamp.” whitehouse

One must look no further than the recent appointment of Steve Mnuchin, Wall Street financier, to the cabinet as Secretary of Treasury. Mnuchin is a career banker. He spent 17 years at Goldman Sachs, ultimately attaining the position of partner. He oversaw a privately-owned hedge fund and later was a top fundraiser for Republican president-elect Donald Trump. He also worked for a time at a California bank that NPR recently referred to as a “foreclosure machine” in the midst of the housing bust.

Essentially, Mnuchin and others were searching for ways to turn a profit from the ruins of the housing market. He and a group of other billionaire investors purchased IndyMac, a bank that took a nosedive after its risky mortgage loans turned sour. He and the others bought it with a promise to pay future losses above a certain threshold – which they did, and after six years, sold it as OneWest at a $1.5 billion profit for $3.4 billion. How did they do this? On the backs of suffering homeowners. 

OneWest is estimated to have foreclosed on 36,000 homes under Mnuchin – with all of those payments going to the billionaire investors.

Among those affected:

  • An 86-year-old man and his wife, who had lived in their home for 50 years, but struggled to make payments after taking out a home equity loan. They qualified three times for a government-assisted modification, but Mnuchin’s bank refused to modify the loan. The couple noted 33 different employees they spoke to at the bank, and each had a different story. After a vice president promised to grant them a two-month extension on the sale date, their home was suddenly sold out from underneath them the very next day. The couple voted for Trump, but are dismayed by Mnuchin’s appointment.
  • A 59-year-old Donald trump supporter whose Los Angeles-area home was foreclosed on, stripping her also of two units that she rented out/ relied on for income. She had purchased the property in 1998 for $248,000, lived in one unit and rented out the other two. She had a “pick-a-payment” loan, which is made her monthly payments as high as $2,000 monthly, which only covered the interest. Then the market crashed, her tenants lost their jobs, they couldn’t pay and she fell behind too. She tried repeatedly to have the loan adjusted through the Home Affordable Modification Program, but the bank lost paperwork, provided conflicting statements about fees and submitted unverified charges. The loan balance ballooned to $520,000. She lost the home, but is still challenging the foreclosure in court.
  • A 90-year-old Florida woman who owed just 27 cents had her home foreclosed on after confusion about payments on her reverse mortgage. She sent a check for $423 on a bill that was for $423.30. The bank sent back a bill for $0.30. But then the woman sent back a check for $0.03. The bank moved foreclose – and ultimately did just that.

Although Trump may not be concerned with this, our Miami foreclosure lawyers recognize the fact that Mnuchin’s appointment to this point runs counter to the message that Trump would fight for and rescue the forgotten middle class.

If you’re battling debt collection in Miami or the surrounding areas contact Jacobs|Keeley for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday at 5 p.m. on “Debt Warriors with Bruce Jacobs and Court Keeley,” discussing foreclosure topics that matter to YOU.

Additional Resources:

Trump voter lost home, blames incoming Treasury secretary, Dec. 2, 2016, By Josh Boak and Jeff Horwitz, AP

More Blog Entries:

Warren Takes Trump to Task for “Selling Out” Americans With Transition Team Picks, Nov. 16, 2016, Miami Foreclosure Lawyer Blog