Records dispute denial by treasury pick over use of ‘robo-signing’ in foreclosures
SEATTLE — A bank founded by Steven Mnuchin, President Donald Trump’s nominee for treasury secretary, engaged in ethically questionable foreclosure practices in Washington state — including so-called “robo-signing” of documents.
OneWest Bank employees robo-signed numerous foreclosure-related filings in the Seattle area, documents show. The bank also was sanctioned in 2013 by a Seattle federal judge for obstructionist tactics in a foreclosure lawsuit.
Mnuchin, a former Goldman Sachs banker who was the Trump campaign’s finance chairman, is scheduled for a Senate confirmation vote Monday.
Mnuchin joined with other investors to create OneWest in 2009, purchasing assets of the bankrupt California lender IndyMac. Under Mnuchin’s watch, consumer advocates labeled OneWest a “foreclosure machine” for its aggressive moves to force defaulting homeowners out of their houses.
That included “robo- signing,” which had company employees rapid sign stacks of legal documents without checking them for accuracy. During Senate confirmation hearings, Mnuchin explicitly denied that OneWest engaged in robo-signing.
30 seconds a document
But his denial has been picked apart by media reports pointing to a 2009 deposition by OneWest Vice President Erica Johnson-Seck, who testified to robosigning hundreds of foreclosure documents a week, spending no more than 30 seconds on each.
That included paperwork in Washington. A review of King County Recorder’s Officefilings found Johnson-Seck’s signature on dozens of recorded real estate documents. Numerous other foreclosurerelated papers in King County were signed by a small group of JohnsonSeck’s colleagues operating out of a Texas office.
Such robo-signing was among the abuses called out in 2012 as part of a national $25 billion settlement with the five largest mortgage servicers. That settlement did not include the much smaller OneWest.
Mnuchin spokesman Barney Keller said the criticisms of OneWest were overblown, saying the documents signed by JohnsonSeck have withstood legal scrutiny.
Mnuchin is proud of his OneWest tenure, which included saving thousands of jobs and modifying tens of thousands of mortgages so people could stay in their homes, Keller said. He called attacks on that record “nothing more than garbage that belongs in a dumpster.”
Mnuchin defended OneWest in Senate testimony, saying he’s proud of his bank’s “low error rate” in foreclosure filings.
‘Publicity stunt’
OneWest was acquired by CIT Bank in 2015. Mnuchin stepped down from CIT’s board in December when he was announced as Trump’s choice as treasury secretary.
Democrats on the Senate Finance Committee oppose Mnuchin and boycotted his committee vote, accusing Republicans of ramming him through without adequate vetting.
Senate Finance Committee Chairman Orrin Hatch, R-Utah, has defended Mnuchin and called the Democratic walkout a “publicity stunt.”
Attorneys who have fought foreclosures in Washington acknowledge lender shortcuts such as robo-signing documents typically have not been enough to stop people who have defaulted on loans from losing their homes.
But Seattle attorney Melissa Huelsman argued that OneWest’s adoption of robo-signing and other aggressive tactics was especially egregious because the mortgage industry already was under a cloud at the time of the bank’s formation.
“They were later in the game. They acquired those assets and immediately started mirroring the stuff that was the subject of litigation,” said Huelsman, who specializes in foreclosure and mortgage-fraud cases. “That’s a reason why I think it’s somewhat more offensive with OneWest.”