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What Exactly Did OneWest Do?

Heather McCreary talked about the California Reinvestment Coalition, which is the group that brought her to Washington D.C. to testify against Trump Treasury nominee Steven Mnuchin.

Mnuchin was head of OneWest Bank, which took over IndyMac when the financial crisis hit. OneWest then foreclosed on tens of thousand of homes – even ones that were eligible – like Heather said – for mortgage loan modifications.

Paulina Gonzalez is the executive director of the California Reinvestment Coalition, which advocates on banking issues for low income families in her state. She explained what OneWest did and the impact it had on families in Nevada.

INTERVIEW HIGHLIGHTS:

Is Heather McCreary’s story typical?

Heather’s story isn’t, unfortunately, the only story we’ve heard with this situation. We heard three other women tell their story in D.C. with similar situation where OneWest approved their modifications then subsequently lost paperwork, lost checks and then after being approved, lost their modification and they had to reapply.

Was this incompetence by the bank or was it done on purpose?

It is hard to say, but either way the results are the same. There was a responsibility by the bank, and Mr. Mnuchin was the CEO at the time, to follow the law and to do all that they could at this time to keep families in their homes.

If Mr. Mnuchin was unable to manage a bank, it is unclear how he can manage our economy.

Heather talks about learning that the people at the bank who received the modification applications weren’t actually empowered to do anything. Can you shed more light on that?

The bank modification process was very opaque to borrows. Borrows were sending in their applications. As Heather said in her testimony, she was crossing her T’s dotting her I’s, she was following the process as it was laid out to her.

The bank on the other end was supposed to be doing all that they could on their end to keep families in their homes. The HAMP process was clear. The bank knew what it was. And so they at different points qualified Heather for a modification process, but what we learned later was, even though the bank offered 100,000 modifications many of those people then fell off and weren’t actually able to keep their homes.

Mr. Mnuchin is throwing around this number, ‘We offered 100,000 modifications,’ but what he doesn’t say is how many people actually kept their homes. In Nevada, close to 4,000 people lost their homes. Senator Heller asked how many people were foreclosed upon. He didn’t give that number to Senator Heller. We had to provide that number to him.

It’s clear that there isn’t in the bank a lot of clarity and transparency about their process or even how many people kept their homes or how many people modified their loans because clearly there were a lot of problems in the process.

Do you think One West was intentionally dishonest?

I think Mr. Mnuchin has been dishonest up until this point. He hasn’t provided numbers to the senators. He wasn’t honest to Senator Heller in the confirmation hearing. Sen. Heller asked him seven times for the number of modifications and number of foreclosures in his state. He didn’t give those numbers to Sen. Heller prior to the confirmation hearing.

He’s being dishonest now in terms of modifications. He’s inflating those numbers.

If he’s not being honest now, in terms of the number of foreclosures and the number of modifications. There’s a lot of questions about whether he ran his bank honestly and whether he was honest with borrows at the time of their applications of modifications.

The mortgage modification program is called HAMP. Tell us what HAMP is?

HAMP stands for the Home Affordable Modification Program. And it allowed and provided incentives for banks to keep families in their homes. The banks were the ones making the final decisions in terms of the actual modification for families.

Unfortunately, for the families that had loans with OneWest, the denial rates were very high… with 73 percent.

Paulina Gonzalez, executive director, California Reinvestment Coalition

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(EDITOR'S NOTE: Carrie Kaufman no longer works for KNPR News. She left in April 2018)