[Congressional Record Volume 163, Number 16 (Tuesday, January 31, 2017)]
[House]
[Pages H755-H756]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
PRESIDENT TRUMP'S CABINET NOMINEE, STEVE MNUCHIN
The SPEAKER pro tempore. The Chair recognizes the gentlewoman from
Ohio (Ms. Kaptur) for 5 minutes.
Ms. KAPTUR. Mr. Speaker, today I rise to place in the Record a very
important story from The Columbus Dispatch newspaper. It focuses on
Steve Mnuchin, President Trump's nominee to be Treasury Secretary, and
it raises issues of deep concern.
[From the Columbus Dispatch, Jan. 29, 2017]
Trump Treasury Pick Mnuchin Misled Senate on Foreclosures, Ohio Cases
Show
(By Alan Johnson and Jill Riepenhoff)
President Donald Trump's nominee for U.S. treasury
secretary was untruthful with the Senate during the
confirmation process, documents uncovered by The Dispatch
show.
Steve Mnuchin, former chairman and chief executive officer
of OneWest Bank, known for its aggressive foreclosure
practices, flatly denied in testimony before the Senate
Finance Committee that OneWest used ``robo-signing'' on
mortgage documents.
But records show the bank utilized the questionable
practice in Ohio.
``The guy is just lying. There's no other way to say it,''
said Bill Faith, executive director of the Coalition on
Homelessness and Housing in Ohio.
The revelation comes with the committee's vote on whether
to confirm Mnuchin's nomination, currently scheduled for
Monday night.
Barney Keller of Jamestown Associates, who represents
Mnuchin, was asked to comment for this story but did not
respond before deadline. Jamestown Associates is a Washington
political consulting and advertising firm that represented
Trump in his campaign.
``Robo-signing'' is the informal term for when a mortgage
company employee signs hundreds of foreclosures, swearing
they have scrutinized the documents as required by law when
in fact they have not.
``OneWest Bank did not `robo-sign' documents,'' Mnuchin
wrote in response to questions from individual senators,
``and as the only bank to successfully complete the
Independent Foreclosure Review required by federal banking
regulators to investigate allegations of `robo-signing,' I am
proud of our institution's extremely low error rate.''
But a Dispatch analysis of nearly four dozen foreclosure
cases filed by OneWest in Franklin County in 2010 alone shows
that the company frequently used robo-signers. The vast
majority of the Columbus-area cases were signed by 11
different people in Travis County, Texas. Those employees
called themselves vice presidents, assistant vice presidents,
managers and assistant secretaries. In three local cases, a
judge dismissed OneWest foreclosure proceedings specifically
based on inaccurate robo-signings.
The Dispatch found more than 1,900 OneWest foreclosures in
the state's six largest counties from 2009 to 2015.
Carla Duncan, a social worker from Cleveland Heights, was
snared by OneWest's robo-signing machinery.
On her way out of town for a short trip in 2010, Duncan
stopped by her home to get her mail and found a note from a
field inspector for her mortgage company saying that her
house was vacant and was going to be boarded up.
``It wasn't vacant. I was living there,'' Duncan said.
``There were curtains on the windows. The radio was playing
and the dog was there.''
What Duncan didn't know at the time was that OneWest had
begun foreclosure proceedings on her three-bedroom home even
though she was up-to-date on her payments. OneWest refused to
accept a loan modification approved by a previous lender that
had been purchased by OneWest, and it wanted to substantially
increase Duncan's interest rate and monthly payment and add
late fees. The company also put a lock box on a separate
rental property she owned in Cleveland.
After hiring former Ohio Attorney General Marc Dann, waging
a five-year court battle and filing personal bankruptcy,
Duncan was finally able to get the foreclosures dismissed and
keep her home and rental property. She said the experience
was devastating.
``It's almost like being raped, like being emotionally
violated,'' Duncan said. ``It got to the point that I was
afraid to open my own door.''
Court records show that Duncan's mortgage was robo-signed
by Erica Johnson-Seck, vice president of OneWest's department
of bankruptcy and foreclosures. From her office in Austin,
Texas, Johnson-Seck robo-signed an average of 750 foreclosure
documents a week, according to a sworn deposition she gave in
a Florida case in July 2009.
Under oath, Johnson-Seck acknowledged that she did not read
the documents she was signing, taking only about 30 seconds
to sign her name. To speed up the process, Johnson-Seck said
she shortened her first name on her signature to just an
``E.'' She said in the deposition that OneWest's practice was
to review just 10 percent of the foreclosure documents for
accuracy.
Dann, who now specializes in representing clients who have
problems with banks and other lenders after he was forced to
resign as attorney general nearly 10 years ago, said
Mnuchin's businesses were a ``major offender'' in problem
mortgages. Dann said Mnuchin's firms were known for dual
tracking (pursuing foreclosures simultaneously as they
allegedly worked with homeowners), fabricating documents and
other tactics ``that caused unbelievable devastation in
people's lives.''
In 2010, federal laws were changed, enabling borrowers
victimized by lenders to sue them. Dann said he worries that
Mnuchin, as treasury secretary, would quietly work to repeal
reforms, collectively known as the Dodd-Frank Wall Street
Reform and Consumer Protection Act.
That appears to be the case.
``It has been over six years since the passage of Dodd-
Frank and it seems like an appropriate time to review all of
the regulations from Dodd-Frank to understand their impact on
the market, investors, small businesses and economic
growth,'' Mnuchin said in a written answer to the Senate.
U.S. Sen. Sherrod Brown, D-Ohio, grilled Mnuchin at his
recent hearing and in follow-up written questions.
``Mnuchin profited off of kicking people out of their homes
and then gave false testimony about his bank's abusive
practices,'' Brown told The Dispatch. ``He cannot be trusted
to make decisions about policies as personal to working
Ohioans as their taxes and retirement.''
Faith, the homelessness coalition director, said
foreclosure practices by Mnuchin's companies and others like
them ``created havoc.''
``People were bamboozled into signing these mortgages,''
Faith said. ``We watched this train wreck happen. It's been
devastating, not only to the people who got caught in this
kind of scheme, but also to people who happened to live in
the neighborhood . . . . It's scary that he's going to be
treasury secretary.''
The Dispatch analysis showed thousands of Ohio homeowners--
including 245 in Franklin County--found themselves in
OneWest's crosshairs when they defaulted on their loans, the
majority of them with high interest rates. Many mortgages had
terms that housing and financial experts view as predatory:
prepayment penalties, interest-only loans and no-money-down
loans.
In addition to OneWest, which was born in 2009 from the
collapse of subprime mortgage giant IndyMac, Mnuchin's
banking group also acquired Financial Freedom, a subsidiary
of Lehman Brothers that went bankrupt because of its toxic
mortgage portfolio. The firm specialized in loans to senior
citizens cashing in on their homes' equity.
Mnuchin was labeled by critics at the time as the
``Foreclosure King.''
Of the nearly four dozen foreclosure cases filed by OneWest
in Franklin County in 2010 that were analyzed by The
Dispatch, a quarter were filed within three years of the
homeowner taking out the loan, typically a red flag that
there was a problem with the mortgage terms and/or vetting
the borrowers.
Thirteen of the borrowers had double-digit interest rates,
ranging from 10 percent to 17.31 percent, largely because of
adjustable-rate mortgage terms.
In the cases in which the houses were sold at an auction,
two-thirds ended up in the hands of the federal government,
which had backed those loans. Collectively, more than $4
million was due on those loans.
Only seven borrowers were able to get a loan modification,
even though former President Barack Obama's administration
had been pushing since 2009 for lenders to help Americans
keep their homes by lowering interest rates and, in some
cases, the principal balance.
Mnuchin does have supporters, including the American
Bankers Association, which sent a letter to the Senate
committee saying Mnuchin's ``public statements as well as his
career in finance bring us optimism with regard to the
outlook for public policies focused on growth and
prosperity.''
Grover Norquist, head of Americans for Tax Reform, released
a statement supporting Mnuchin's nomination, in part because
of his stated intention to roll back some of the Dodd-Frank
legislation: ``Mr. Mnuchin has made it clear that reforming
the Dodd-Frank Act will be his `number one priority on the
regulatory side' once he becomes secretary of the treasury.''
Ms. KAPTUR. According to The Columbus Dispatch, Mnuchin was
untruthful to the Senate Finance Committee regarding his company's
aggressive role in hastening thousands of home foreclosures during the
2000 financial crisis and what followed, and his misdeeds deeply
impacted places like Ohio.
Mr. Mnuchin was the chief executive officer of OneWest Bank, which
engaged in so-called robo-signing of mortgage documents. That means you
really don't--you treat people like objects; you really don't go into
the details of every case.
The Columbus Dispatch said its analysis of dozens of foreclosure
cases in Ohio, and subsequent action, prove otherwise.
The dastardly practice of robo-signing, prevalent throughout the
mortgage industry in the aftermath of that terrible financial crisis,
had certain leaders, of which Mr. Mnuchin was at the top of the heap;
and their employees signed foreclosure documents en masse without
properly reviewing them and forcing unjust foreclosures.
[[Page H756]]
The Columbus Dispatch found more than 1,900 such cases in Ohio alone.
Individual cases revealed OneWest Bank declared properties vacant, even
though someone was living in them. OneWest Bank, time and again,
refused to abide by agreed-upon loan modifications.
Is that the kind of person that we really want in charge of the U.S.
Treasury Department?
Nominee Mnuchin comes with a Goldman Sachs pedigree. Well, wouldn't
we know that? He was nicknamed the ``foreclosure king'' after buying up
IndyMac, a subprime lender that evicted about 36,000 people during the
financial crisis.
Sadly, Mr. Speaker, while President-elect Trump promised to drain the
swamp, his nominee for Treasury Secretary proves he is not doing that
at all. He is enlarging the swamp.
The Columbus Dispatch found more than 1,900, I repeat, OneWest Bank
foreclosures in our State's six largest counties from 2009 to 2015.
In addition, Mr. Mnuchin profited personally off of kicking people
out of their homes. Does such a person actually deserve confirmation as
Secretary of the Treasury of the United States of America?
Wake up, America. Wake up. Pay attention to what is happening here in
Washington, D.C. This city belongs to you. This Capitol belongs to you.
Mr. Speaker, I would also like to place in the Record a release I
sent out over the weekend relating to President Trump's executive order
on immigration and refugees.
Kaptur Statement on President Trump's Executive Order on Immigration
and Refugees
Condemns misguided mandate, invites Trump to meet with refugees who
call Ohio home
Washington, DC.--Today Congresswoman Marcy Kaptur (OH-09)
released the following statement in light of confusion and
hurt emanating from President Donald Trump's Executive Order
on immigration and refugees.
``In New York harbor, not far from President Donald Trump's
office tower stands the awesome Statue of Liberty with Emma
Lazarus' immortal words, `Give me your tired, your poor, your
huddled masses yearning to breathe free.' Surely, President
Trump has read these words.
``Ancesters of the Trump and Kaptur families both passed
through that unforgettable portal as they made their way to
America as immigrants. How can we deny to others the gift of
freedom bequeathed to us?
``I support robust efforts to make America safe and secure.
But a workable solution should ensure America's safety
without destroying our heritage as an immigrant nation,
dedicated to liberty and justice for all.
``President Trump's mandate will make America less safe. It
penalizes worthy individuals and actually gives terrorist
cells ammunition to use against America. This mandate puts
people at risk who have helped America in our battle against
terrorism, at home and abroad. It punishes innocent
individuals caught in the crossfire fleeing terror and tribal
conflict.
``Dangerously this misconceived Executive Order will spur
anti-American sentiment globally and on the Internet,
spurring more terrorism, including against our troops, and it
potentially aggravating religious conflict half way around
the world. Reckless rhetoric puts our nation at greater risk
at home and puts Americans traveling abroad in danger.
``I cordially invite the President to northern Ohio to meet
personally with some of the crossfire fleeing the terror of
war and tribal conflict. A well-crafted policy should
enshrine liberty for all law-abiding persons while avoiding
unintended consequences that can be used by our enemies to
enflame terrorism.''
Ms. KAPTUR. I just wish to say that the ancestors of the Trump
family, as well as the Kaptur family, passed through the unforgettable
portal of the Statue of Liberty in New York Harbor. And the words at
the base of that statue are emblazoned in the minds of families like
our own going back generations. ``Give me your tired, your poor, your
huddled masses yearning to breathe free.'' Surely, President Trump has
read these words.
I support robust efforts to make America safe and secure, and have
served on all the committees in this Congress that aim to do that. But
workable solutions should ensure America's safety, without destroying
our heritage as an immigrant Nation dedicated to liberty and justice
for all.
President Trump's mandate actually will make America less safe
because it penalizes worthy individuals and puts them at greater risk,
and it actually gives terrorist cells ammunition to use against
America.
{time} 1100
Think about it. This mandate puts people at risk who helped America
in our battle against terrorism abroad and at home, and it punishes
innocent individuals caught in the crossfire fleeing terror and tribal
conflict.
Dangerously, this misconceived executive order will spur anti-
American sentiment globally and on the internet spurring more
terrorism. The old World War II motto ``loose lips sink ships'' is
going to happen because of the way this was conducted. Reckless
rhetoric puts our Nation at greater risk at home and puts Americans
fighting for us and those traveling abroad in greater danger.
Mr. Speaker, I cordially invite the President to northern Ohio. Come
and meet some of the people whose lives your order changed. I think you
will change your mind.
The SPEAKER pro tempore. Members are reminded to address their
remarks to the Chair.
____________________