Donald Trump’s treasury secretary nominee Steve Mnuchin on Monday doubled down on his lie to the Senate Finance Committee, again claiming in amended answers for the record that OneWest Bank never robo-signed foreclosure documents, despite copious evidence that they did.
To make his claim, Mnuchin relied on a discredited government review of OneWest foreclosures, while neglecting actual examples of robo-signing newly uncovered in a news report Sunday.
The Columbus Dispatch found dozens of cases in Ohio public records where low-level OneWest employees in Austin, Texas signed off on affidavits attesting to reviewing the underlying loan file, when they had not. These affidavits included those signed by Erica Johnson-Seck, who admitted in a July 2009 court deposition to spending only 30 seconds on each document and never even reading them.
Bill Faith, executive director of the Coalition on Homelessness and Housing in Ohio, told the Dispatch, “The guy is just lying. There’s no other way to say it.”
But Mnuchin ignored this and other evidence in his resubmission of answers. On the robo-signing question, offered by Sen. Bob Casey, D-Pa., Mnuchin explained that “The concept of ‘robo-signing’ generally referred to two distinct but related issues: (a) a signer of a foreclosure affidavit attested to facts that were not verified to be accurate; or (b) a signer of a foreclosure affidavit represented himself or herself to be someone else.”
Those two techniques were precisely what Johnson-Seck admitted to in her deposition. She attested to facts in foreclosure cases without verifying them in any way. She also represented herself as having the authority to sign documents for at least seven different financial institutions. In fact, Brooklyn judge Arthur Schack threw out a OneWest foreclosure because Johnson-Seck had both assigned a mortgage to Deutsche Bank and executed an affidavit on behalf of Deutsche Bank, appearing as multiple officers in the same case.
Mnuchin blew right past this evidence and pointed only to this April 2014 report of the results of the Independent Foreclosure Review, saying it proves OneWest’s innocence. According to a table showing tens of thousands of OneWest errors in foreclosure cases, the bank never executed a foreclosure where “the servicer did not have standing to foreclose,” and on only 23 occasions (out of nearly 179,000) foreclosed when the “borrower was not in default.”
“It is true that small numbers of borrowers were found to have been affected by errors,” said Mnuchin, “and OneWest fully remediated those borrowers in the manner prescribed by federal regulators.”
But the Independent Foreclosure Review he cited was neither independent nor a review. OneWest and its fellow banks hand-picked and paid for the reviewers themselves. These reviewers were not government officials but third-party consultants, who labored under guidelines chosen by the banks. For instance, Aurora Loan Services hired a consultant that had previously managed Aurora’s own foreclosure practices. Bank of America created default answers that the consultants would just double-check.
Whistleblowers at a number of consultants disclosed being pressured by managers to overlook entire categories of borrower harm, and steered away from reporting significant mistakes. “Quit digging so deep… put down your shovel,” one reviewer was told. And if any errors did go through, banks could overrule them through an appeal process.
Indeed, this review, ordered by the Office of the Comptroller of the Currency and the Federal Reserve, minimized evidence of borrower harm, according to a 2013 Government Accountability Office report. Regulators allowed banks to design the reviews and make them incomprehensibly complex, drowning the reviewers in data. In two years, OCC and the Fed never offered guidance as to whether basic errors – like missing loan documents – constituted a violation.
OneWest was actually the only servicer to finish its review; the others were abandoned. But the table to which Mnuchin refers only reinforces how banks were allowed through the reviews to hide their past.
Mnuchin claims the chart shows that OneWest never foreclosed on a homeowner when they did not have standing to foreclose, but OneWest created that category, and there’s no way to know how they defined it. Similarly, only OneWest knows what was covered in the category showing foreclosures when the borrower was not in default.
By contrast, there’s a large category of 10,547 borrowers who were harmed by “general issues,” with no explanation of what that means. This allows people like Mnuchin to deflect criticism about abusive practices by not requiring OneWest to be specific about what they actually did.
Because of this lack of definition, there’s no way to be sure that the table “proves” a lack of robo-signing by OneWest or not. But the clear admission of guilt by a OneWest employee, and clear examples of robo-signed documents in the public records of Ohio and other states, means that we don’t have to wonder about whether Mnuchin lied.
Mnuchin’s use of the Independent Foreclosure Review as a shield reveals yet another example of the sad legacy of accountability for financial fraud under President Obama. Regulators designed a flawed study of foreclosures that, almost by design, did not reveal the extent of borrower harm in the foreclosure crisis.
And now Trump’s Treasury Secretary nominee is using that flawed review to whitewash his lie to the Senate Finance Committee.
Democrats on the committee blocked the vote to advance Mnuchin’s nomination to the Senate floor. Instead of being held Monday night, it will now be taken Tuesday morning.
I expect bankers to lie, that is what criminals do — what I have a problem with, is that we have no rule of law in this country (well, yes we do, but it only applies to the middle class and poor and the poorer and darker you are the more it applies). Why is no one outraged that Kamala Harris as Attorney General of California saw fit not to indict Mcuchin – her office found evidence of criminal fraud. Harris was not only not held accountable as to her failure at her job, but now this charlatan is a US Senator. The hypocrisy of the politicians and those in charge of government is truly unbelievable.
It may not be popular to defend wealthy bankers, but you’re forgetting to mention a major point, which is not entirely fair to Mr. Mnuchin. Mnuchin’s group didn’t buy IndyMac until March of 2009. The loans Ms. Johnson-Seck was testifying about in July 2009 were made prior to that. In fact, the FDIC was running the bank for nearly a year before Mnuchin’s group bought IndyMac and renamed it OneWest, so it’s entirely possible that some of these loans were made when the FDIC ran it! Mnuchin has actually steered the bank away from originating mortgages to concentrate more on commercial loans.
“The Columbus Dispatch found dozens of cases in Ohio public records where low-level OneWest employees in Austin, Texas signed off on affidavits attesting to reviewing the underlying loan file, when they had not.”
Clear evidence of criminal activity sitting right there in the public records and the only thing these people are doing about it is challenging the nominee for treasury secretary?
Filing a false affidavit with a court is tantamount to perjury, and is a FELONY offense. There are hundreds of such cases sitting in the public records all overt the country, yet nobody has been or is being prosecuted for these crimes. The sheer number of these instances of “robo-signing” could easily be used as the basis for a RICO case against the big banks.
“With Liberty & Justice for Some”
Thanks for using the correct word here. It’s been long overdue.
Lying is a second nature to these bankers. Members of the Senate Finance Committtee can smell a lie almost before it’s spoken since they are schooled in the art of lying very early in their government careers.
I hear Mnuchin hearings/vote is being boycotted by the Dems this morning because they want to know more about his “lies”. That’s the word they used, “lies”.
Good Job David!
Now, can you help us on Jeff Sessions. That guy’s a total weasel.
Were Mr. Mnuchin in a jail cell, where he belongs, his confirmation battle would have been much tougher. For that we can thank the Obama administration on their forward looking policies.
A day isn’t complete for me until I’ve read your incisive commentary. You sir, are a treasure.
Indeed. Had laws been enforced, we could have possibly avoided a President Trump. (Of course, we’d have avoided a second President Clinton too, which would also be a good thing…)
I thought I would also thank Kamala Harris for “independently” greasing the skids.
Right now, as a matter of fact.
Occupy at home, close your accounts, refuse to work. Starve the beast.
Lying is an artform for the 1% and the wallstreet thieves and congress elected whores. Now when professional liars catch other professional liars, it’s like hot potato. The game is about who can handle the most hot potatoes. If under the weight of a hundred pounds of hot potato lies, Mnuchin doesnt break a sweat, he’s in.
1000 words. That pucker-face look is telling and i am wondering if the bedazzled look on the face of the young woman behind him has something to do with it.
after taking another gander at that pic, one just might wonder if he speaks from his arse…
Mnuchin lied about robosigning. Tom Price lied about his drug stock purchases. They will be confirmed anyway. Nothing can be done, because Republicans in Congress will not hold them accountable. Unless Congressional Republicans revolt, the President and his aides pretty much have the power to commit any crimes they wish.
I’m stuck living in a state with two Republicans in power. I plan to speak out, and point out that this is a simple issue of trust and law. If he lies to Congress on this, what will he not lie about? If he is willing to ignore organized, systematic forgery, is that a good thing for someone in power?
If they vote for him anyway, I think it would make a great issue for their opponents.
We’ve had former Goldman Sach’s executives infiltrating our government for years, with an abundance of recruits under Trump. Might as well make it eponymous…The United States of Goldman Sachs. I must say that Goldman Sachs’ current and former executives play a mean game, always several plays ahead of any opposition and-or competition. They make their own rules.
Mr. Mnuchin is demonstrating his perfect suitability for a role in the Trump cabinet. I wish the Congress would cut him some slack. After all, he is the appointee of our liar in chief; were he to revert to the truth it would contradict his boss, and therefore undercut his credibility with the hundreds of millions of people who voted for him. We cannot have that, can we?
restructure capitalism. Move beyond feudal lords/serfs…masters/slaves…government/socialists…
employer/employees.
put production in charge. Not merely what they produce but how, what, when and where, as well the control of their surplus (now being controlled by a concentrated sociopathic few).
Let democracy come into the elite capitalist’s enterprises…the time is beyond due.
Thanks for holding Trumps cabinet picks feet to the fire.
Maybe an actual Senator will vet this Alligator, Drain the Swamp.
Half a truth is often a great lie.
Benjamin Franklin