thinkprogress.org | February 8, 2017
By Bryce Covert
Before he was picked by President Trump to lead the Treasury Department, Steve Mnuchin ran a bank named OneWest, which foreclosed on tens of thousands of homeowners under his leadership. After his Senate hearing, he was asked specifically about the practice of robo-signing, which entails mortgage officials rapidly signing off on hundreds or thousands of foreclosure documents without verifying that the information is accurate or giving it a thorough review as required by law. Thus a bank can speed up the foreclosure process and, in some cases, get courts to let it take possession of a property with a full trial.
Mnuchin wrote in his written response, “OneWest Bank did not ‘robo-sign’ documents.”
Ever since then, however, the evidence has piled up that his bank did in fact engage in this practice.
The White House could not be reached for comment. In an email, a spokesperson for CIT Bank, which bought OneWest, said that since the acquisition, “CIT has and continues to remain committed to meeting the credit and banking needs of borrowers in our communities.”
But a report released by progressive advocacy group Allied Progress on Monday collected a number of court cases that accused OneWest officials of signing off on sloppy and even inaccurate paperwork in California, Massachusetts, New Jersey, Nevada, Rhode Island, and Texas during Mnuchin’s tenure.
In Nevada, OneWest was named in a class action lawsuit against Lender Processing Services (LPS), a vendor it used to process documents, which was accused of a “massive” robo-signing scheme in the state that violated its Deceptive Trade Practices Act. The state’s attorney general also accused LPS of using teams of robo-signers who filed tens of thousands of false documents in 2011.
In New Jersey, OneWest was even banned from foreclosing for a year thanks to its robo-signing practices, along with five other banks. The ban was lifted in 2011 after a federal judge created a monitoring program for foreclosure proceedings because, he said, courts couldn’t determine which assertions were accurate.
The Allied Progress report comes after other evidence has surfaced that OneWest robo-signed documents. The Columbus Dispatch reviewed almost four dozen foreclosure cases in Ohio in 2010 alone in which the bank reportedly robo-signed documents, including three that were dismissed by a judge because of the practice.
One victim was Carla Duncan, as the Dispatch reports. One day in 2010 she found a note on her home’s door saying that her house was vacant and going to be boarded up, even though she was currently living there. She eventually found out that even though she was current on her mortgage payments, OneWest had started foreclosure proceedings on her home after it refused to allow a loan modification that had been approved by the lender that previously owned it. Court records showed that OneWest had relied on a robo-signer to do the paperwork.
Duncan was only able to get the foreclosure dismissed and keep her house after a five-year legal battle. The experience took a toll on her. “It’s almost like being raped, like being emotionally violated,” she told the Dispatch. “It got to the point that I was afraid to open my own door.”
The person who robo-signed foreclosure proceedings against Duncan did the same for countless OneWest customers. Erica Johnson-Seck, OneWest’s vice president for bankruptcy and foreclosure, said in a later deposition that she had signed 750 documents a week, spending just 30 seconds on each one without properly reviewing everything, along with eight other employees. Johnson-Seck said she moved so fast that she shortened her signature to just the letter “E.”
That E appears on dozens of mortgage documents in Maine that were processed in 2009 and 2010, according to the Portland Press Herald, a number of which were linked to foreclosures.
OneWest itself admitted that it has processed faulty documents. In a review it submitted to the Office of the Comptroller of the Currency in 2014, the bank said 5.6 percent of all its borrowers were due remediation for improper practices, including errors. That review came after a consent order that was issued by the Office of Thrift Supervision, which said that OneWest filed documents in which officials asserted they reviewed records when they had in fact not done so.
Despite all of this evidence that flies in the face of what Mnuchin told the Senate in his written responses, Republicans pushed his confirmation vote through committee last week, despite a Democratic boycott, by changing the rules.
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