Steve Mnuchin, Trump’s pick for Secretary of Treasury, has a checkered past (he once foreclosed on a 90 year old customer who was $0.27 short on her mortgage payment) but a leaked memo from the California attorney general’s Consumer Law Section reports that Mnuchin’s leadership of Onewest Bank involved “widespread misconduct” in foreclosing on Californians, through which the bank was able to fraudulently confiscate their customers’ homes.
The California foreclosure process basically runs on the honor system, giving banks the power to seize homes without judicial oversight, so “misconduct” in this process allows banks to commit breathtaking, unaccountable acts of fraud that destroy their customers’ lives and strip them of their largest asset and their homes literally at the stroke of a pen.
The California AG never prosecuted the “misconduct,” apparently at the order of then-Attorney General Kamala Harris, who has just won a federal Senate seat, thanks in part to large donations from Mnuchin and other major Onewest shareholders, including George Soros.
Onewest stonewalled the investigation into its misconduct, ordering its contractors to refuse to cooperate with subpoenas from the AG’s office.
OneWest already had a history of using false documents in foreclosures. A July 2009 deposition of Vice President Erica Johnson-Seck revealed that she “robo-signed” 6,000 foreclosure-related papers per week, spending just 30 seconds on each sworn affidavit that attested to the veracity of all relevant information in the case. Johnson-Seck even admitted to not reading the documents before signing them. OneWest entered into a consent order in April 2011 with the now-defunct federal Office of Thrift Supervision over related failures in the foreclosure process.Knowing that OneWest foreclosed on thousands of California homeowners, the Consumer Law Section decided to investigate in 2012.
Because of federal pre-emption rules, state prosecutors cannot subpoena national banks for information about their core functions prior to filing a lawsuit. But the California attorney general’s office was nevertheless able to review over 204,000 publicly available foreclosure documents filed with county recording offices throughout the state, along with other documents purchased from a website called Foreclosure Radar that tracks foreclosure activity.
Working through the county records, the attorneys immediately uncovered a startling finding: 86 OneWest documents changing the designation of third-party trustees (SOTs) bore a date prior to March 19, 2009, the date OneWest opened for business. Some dated back to 2008.
“Because it would have been impossible for OneWest to sign the instruments before it became an operational bank,” four deputy attorneys general from the Consumer Law Section wrote in the memo, “we deduced that the instruments were backdated.”
Treasury Nominee Steve Mnuchin’s Bank Accused of “Widespread Misconduct” in Leaked Memo [David Dayen/The Intercept]
(Image: Sign of the times – Foreclosure, respres, CC-BY)
