David Dayen: Bankers and Profiteers of the “Great Foreclosure Machine”

https://www.democracynow.org/2016/12/2/bankers_behind_great_foreclosure_machine_joine

 

We look at two of Donald Trump’s Cabinet picks: Steven Mnuchin for treasury secretary and Wilbur Ross for commerce secretary. Mnuchin has deep ties on Wall Street, including working as a partner for G

oldman Sachs, and his hedge fund played a role in the housing crisis after it scooped up the failing California bank IndyMac in 2008. Trump’s commerce secretary pick, Wilbur Ross, is a billionaire private equity investor who specializes in flipping bankrupt companies for profit, often buying the U.S. companies at low prices and then selling them to overseas investors. He and his companies have sometimes shipped jobs and factories overseas—practices Donald Trump has railed against. We are joined by David Dayen, whose recent article for The Nation is “Wilbur Ross and Steve Mnuchin—Profiteers of the Great Foreclosure Machine—Go to Washington.”


TRANSCRIPT
This is a rush transcript. Copy may not be in its final form.

AMY GOODMAN: We turn to look in more detail at two of Donald Trump’s Cabinet picks: Steven Mnuchin for treasury secretary and Wilbur Ross for commerce secretary. Mnuchin has deep ties to Wall Street, including working as a partner for Goldman Sachs, where his father also worked. Mnuchin’s hedge fund also played a role in the housing crisis after it scooped up the failing California bank IndyMac in 2008. Under Mnuchin’s ownership, IndyMac foreclosed on 36,000 families, particularly elderly residents trapped in reverse mortgages. Mnuchin was accused of running a foreclosure machine. People protested outside his home. The bank, which was renamed OneWest, was also accused of racially discriminatory lending practices. In 2015, Mnuchin sold the bank for $3.4 billion, $1.8 billion more than he bought it for.

Trump’s commerce secretary pick, Wilbur Ross, is a billionaire private equity investor. Ross specializes in flipping bankrupt companies for profit, often buying the U.S. companies at low prices, then selling them to overseas investors. He and his companies have sometimes shipped jobs and factories overseas, practices Donald Trump has railed against. He, too, had a role in the foreclosure crisis. In 2007, Wilbur Ross bought the second-largest servicer of subprime loans in America, a company called American Home Mortgage Servicing.

To talk more about Mnuchin and Ross, we’re joined by David Dayen, author of the award-winning book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. His most recent piece for The Nation, “Wilbur Ross and Steve Mnuchin—Profiteers of the Great Foreclosure Machine—Go to Washington.”

So, talk about the significance of this, David. Talk about who Mnuchin and Ross are.

DAVID DAYEN: Right, so they are both—I call them profiteers because they, like most banks and mortgage servicing companies, just profited from the lack of attention to the foreclosure crisis at the federal level. Mnuchin foreclosed on 36,000 people—in California alone. He foreclosed on much more through OneWest Bank, where he was CEO. And Wilbur Ross, through American Home Mortgage Servicing, which eventually became a company called Ocwen, also did so, and they did so illegally.

 

These were fraudulent foreclosures, where fake documents were used to prop up those foreclosures. There are depositions with individuals from OneWest Bank saying that they spent 30 seconds looking at foreclosure files before signing affidavits that said that they knew everything in that file and reviewed all the business practices. There were forged documents routinely from Wilbur Ross’s American Home Mortgage Servicing. They were done by a third-party company known as DocX, where the CEO of that company actually is in prison right now, went to prison for five years for forging millions of mortgage assignments to be used as evidence in court cases all over the country. So, these were very normal practices, but it’s very ironic that the Obama administration kind of lost track and didn’t pay attention to this crisis that was going on. And now, after Trump’s election, he brings in two people who profited almost the most from that to help run his Cabinet.

AMY GOODMAN: And what does it mean to be head of treasury and commerce? How does that relate to what their history is around the issue of foreclosure?

DAVID DAYEN: Well, certainly, the Treasury Department is a regulatory position now. Steven Mnuchin will be the head of the Financial Stability Oversight Council, which is a superregulator that monitors systemic risk, where there was a lot of systemic risk from the financial crisis and the foreclosure crisis, and he can kind of shut it down. Steven Mnuchin has said that he will seek to privatize Fannie Mae and Freddie Mac, where nine out of 10 mortgages are owned or guaranteed right now. That’s going to be a huge windfall for the hedge funds that bought Fannie and Freddie stock at a low point, at a dollar a share. If that’s spun out and privatized, it would be $30 to $40 a share.

Incidentally, one of the biggest benefactors of that would be John Paulson, who was a business partner to Steven Mnuchin in the OneWest deal. So, you know, through deregulation, through just the lack of attention to these matters, Steven Mnuchin is going to have a lot of control. Wilbur Ross, maybe less so at the Commerce Department, but still you’re talking about Donald Trump’s closest advisers, and it’s very likely they’re going to take their eyes off the ball with respect to the practices of the mortgage industry.

AMY GOODMAN: Well, David Dayen, I want to thank you for being with us, author of the award-winning book Chain of Title: How Three Ordinary Americans Uncovered Wall Street’s Great Foreclosure Fraud. We will link to your piece in The Nation.

9 Responses

  1. Hi Neidemeyer,

    Really wish you the best in finding that good lawyer. I haven’t been active for several years but scammers still occasionally call me with no business credentials. Best of luck!

  2. sorry for the double post ,, it just “disappeared” after “post comment” without showing up on the page… only appeared after 6am despite the timestamps now being correct?? Server Maint issue perhaps??

  3. Steve ,

    I remember!

    That LPS v. AHMSI suit was about AHMSI allowing AIG’s agents to procure the underwriting files and funding docs for my trust OOMLT 2007-FXD2 … The same docs that were found in 11cv10549 US District Ct , Los Angeles to show that BOA was the lender and Option One had no role.

    Those 2 cases show everything I need to win a wrongful FC case .. I just need an angel or a good lawyer that will work on contingency…

  4. Steve ,

    That LPS vs. AHMSI lawsuit was over the evidence (underwriting files and funding for OOMLT 2007-FXD2) procured from AHMSI by AIG’s agents that was later used by AIG against BOA in 11cv10549 US District Ct Central District Los Angeles. ,,, That is the evidence I will be using against OCWEN (who is the “successor servicer” to AHMSI on my “trust”) ,, it’s all been produced in court and verified… nothing on the supposed chain of ownership is true or valid except my signature.

    I haven’t forgotten… but I sure could use an angel with cash or a lawyer willing to go contingency.

    As for “icing on the cake” we have Sand Canyon admitting to owning nothing and BOA denying ownership of my note in a response letter to a rescission notice. We also have 3 “impossible” assignments (a blank, a “corrective” and a self serving OCWEN to OCWEN) and AHMSI and OCWEN unable to produce evidence of ownership of the note in response to discovery.

    RICO RICO RICO RICO RICO !

    OCWEN , you know who I am ,, sue me if you dare … 7141702816

  5. God help us peons. I am now having doubts about trump and his recent appointments. All aristocrats. Kind of reminds me of bush’s days. Oh well. We will see in time soon enough what trump’s true motives will be.

  6. Well i am cautiously optimistic. The way I figure it… IF you want to stop a thief hire a thief that will catch a thief. IF Trump is using these people to correct what has happened and not duplicate or make it so its impossible to catch them… Then I am ok. However we need to take precautions in our stance and make it known that we are watching…

  7. Remember when they were to memorialize the transfer of ownership.

    http://www.nakedcapitalism.com/2011/08/bombshell-admission-of-failed-securitization-process-in-american-home-mortgage-servicinglps-lawsuit.html

    Owned at the time by Wilbur Ross.

  8. As a TRUMPSTER, I am very disappointed in these two appointments.
    Calling him right now on the hotline.

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