Mnuchin’s former bank comes under scrutiny

The foreclosure practices of Steve Mnuchin’s former bank, OneWest, are coming under scrutiny now that President-elect Donald Trump has selected him for Treasury secretary.

Mnuchin and his business partners at OneWest bought the remains of the failed mortgage lender IndyMac in 2009, during the height of the housing crash. IndyMac had been shut down by Federal Deposit Insurance Corporation (FDIC) for giving out high risk mortgage loans, Politico reports.

The FDIC paid OneWest nearly $1.2 billion to cover the cost of some of the toxic assets from IndyMac, according to Politico, while the bank itself sustained a total loss of approximately $4.6 billion from the purchase.

OneWest ultimately merged with CIT Bank in a $3.4 billion deal in 2015, with Mnuchin reportedly receiving a $10.8 million payout.

Consumer advocates have questioned OneWest’s business practices, pointing to several examples of alleged customer mistreatment.

One of the cases involved the bank filing a foreclosure on the Lakeland, Fla. home of a 90-year-old Ossie Lofton in 2014, Politico reports.

Lofton, who had taken a reverse mortgage at the time, was billed for $423.30 by the bank after some initial confusion over insurance coverage, the news outlet reported. Lofton sent a check for $423.00, coming 30 cents short of the billed amount.

When the bank sent the Florida woman another bill for 30 cents, Lofton accidentally sent a check for three cents, which resulted in the bank filing for foreclosure in November, according to the report.

The foreclosure was contested by Florida Rural Legal Services, which asked for a jury trial last month.

Lynn Drysdale, the attorney representing Lofton, called the bank’s actions “criminal.”

“I don’t know that they’re the worse, but I certainly think it’s criminal the way these servicers are treating elderly homeowners,” she said, as reported by Politico.

While Mnuchin’s nomination for Treasury has been criticized on the left, it has been met with praise in other quarters. Industry groups and Republican lawmakers have hailed his private sector experience, calling him a perfect choice to help implement Trump’s agenda.

“Given the depth and breadth of Steven’s private sector experience, he will play a pivotal role in bicameral efforts to revamp the nation’s outdated tax code to create a healthier economic environment for American businesses and families here at home,” said Senate Finance Committee Chairman Orrin Hatch. 

Updated at 11:43 a.m.