Leaked memo: Mnuchin’s bank violated foreclosure laws

by Ryan Smith05 Jan 2017

The bank run by President-elect Donald Trump’s nominee for Treasury secretary from 2009 to 2015 repeatedly broke California foreclosure laws during that time, a leaked memo alleges.

The memo, obtained by The Intercept, alleges that OneWest — the bank formerly headed by Trump Treasury pick Steve Mnuchin — violated notice and waiting-period laws to rush delinquent homeowners out of their houses, illegally backdated documents and “effectively gamed foreclosure auctions.”

The memo was written in 2013 by prosecutors in the California attorney general’s office. The prosecutors alleged that they had “uncovered evidence suggestive of widespread misconduct” by OneWest in the course of a yearlong investigation, The Intercept reported. The memo detailed more than 1,000 legal violations in just the small portion of OneWest loans the prosecutors were able to examine.

The memo also alleges that OneWest obstructed the state’s investigation by ordering third parties not to comply with subpoenas.

The prosecutors recommended that Attorney General Kamala Harris file a civil action against OneWest seeking millions of dollars in penalties, The Intercept reported. But Harris’s office declined to prosecute the case, offering no explanation.

As the former CEO of OneWest, Mnuchin is already facing criticism from hostile Democrats over his bank’s foreclosure practices, which have been described as particularly harsh. During Mnuchin’s tenure, OneWest locked one homeowner out during a blizzard and foreclosed on another over payment that was 27 cents short, The Intercept reported.

“After years peddling the kind of dangerous mortgage-backed securities that eventually blew up the economy, Mnuchin swooped in after the crash to take a second bite out of families by aggressively — and sometimes illegally — foreclosing on their homes,” Sen. Elizabeth Warren said in a December statement.

“Given Mr. Mnuchin’s history of profiting off the victims of predatory lending, I look forward to asking him how his Treasury Department would work for Americans who are still waiting for the economic recovery to show up in their communities,” said Sen. Ron Wyden, the ranking Democrat on the Senate Finance Committee.

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