an member station
When President Trump picked Steven Mnuchin to be his treasury secretary, it drew skepticism from many quarters.
As a candidate, Trump had railed against Wall Street. Yet, Mnuchin was a former Goldman Sachs executive, who recently turned Hollywood financier – the same pedigree as Trump advisor Steve Bannon.
What bothered Heather McCreary, though, was Mnuchin’s time as head of OneWest Bank. OneWest is the company formed out of IndyMac, which failed almost immediately after the financial crisis started.
McCreary and tens of thousands of others took advantage of a federal program that was instituted by federal lawmakers during the 2009 bank bailout.
The program, called the Home Affordable Modification Program (or HAMP), was supposed to help homeowners renegotiate their underwater mortgages, and save them from foreclosure.
But the program was not run by the government. Banks, themselves, were allowed to oversee their own handling of HAMP, and former IndyMac mortgage holders have complained that the bank never dealt with them in good faith.
Heather McCreary was one of the people who lost her home to One West. She lives in Sparks. And she felt so strongly about the choice of Mnuchin as Treasury Secretary, she flew up to Washington D.C. to testify in front of the Senate Finance Committee against the pick.
“We were foreclosed on," McCreary told KNPR's State of Nevada, "That’s what got me going.”
McCreary's story is similar to a lot of other people in Nevada during the housing crisis. She lost her job in 2008. Her husband lost his a year later. While the loan on their home was a regular 30 year fixed-rate mortgage, they struggled to make payments.
McCreary worked with OneWest/IndyMac to get a loan modification under HAMP. She said the loan modification was approved, but from there it soured.
“The first payment that I submitted to the modification was returned 30 days later with a check," she said, "They stated that the modification was null and void now due to the fact that I submitted a personal check and not a certified check”
McCreary said she searched the modification paperwork to see where it stated it had to be a certified check. She could not find that rule anywhere. She said she has since learned that OneWest/IndyMac did this to other people looking to get a loan modification, putting small loopholes in that nullified the modification.
The McCrearys applied two more times for a modification and sent monthly letters asking for information. They did not hear a response until they got a final foreclosure notice. Their home was sold the day after they received the foreclosure notice.
“We were stuck," she said, "We were homeless for sure.”
McCreary said they had to pack their things and move in with her parents until they could find a property to rent.
“You try to be a respectable adult and set out an example for your kids that you’re working hard, you’re doing what’s right," she said, "And to foreclosure, it’s just this big shame because you did not have what it took to make your house payment."
The McCrearys had to move three more times in the years after the foreclosure. Eventually, Heather's parents were able to buy a home and rent it to the family.
She had tried to put the whole thing out of her mind, until Steve Mnuchin was nominated as treasury secretary. She remembered that he was the president of OneWest Bank, when she was applying for a loan modification.
She was asked by California Reinvest Coalition to testify during his confirmation hearing.
“It was an amazing experience,” she said of the Senate hearing.
McCreary told her story, but she also learned a lot about how the process worked, including something called 'black lining,' which she said is having different departments in different places around the country that don't actually process loan modification applications.
“They had no intention of modifying,” she said.
McCreary said why would a bank want to modify a loan when they can simply foreclosure, sell the property and pocket the profit.
She said Sen. Dean Heller, (R)-NV brought that exact question up during Mnuchin's hearing, but the bank president didn't respond.
McCreary also said she found out in Washington that Mnuchin likes to call himself the modification king.
“I truly believe he is still the foreclosure king," she said.
McCreary is very clear about what she thinks of Steve Mnuchin as treasury secretary.
“I think that people believe that Steven Mnuchin as Secretary of Treasury that that would work for the United States, but that might work for some people but that’s not going to work for us, you know, the common people,” she said.
McCreary said that Mnuchin personally profited from OneWest Bank to the tune of $200 million not because of foreclosures, but because of loan modifications that were never processed.
Heather McCreary, testified against Mnuchin