Politics

New Treasury Secretary Foreclosed Senior Owing 27 Cents

| by Sarah Zimmerman

President-elect Donald Trump's pick for treasury secretary, Steven Mnuchin, has been getting some backlash after it was released the hedge fund manager and movie producer profited off of the 2008 housing collapse, even going so far as to foreclose on a 90-year-old woman who owed 27 cents. 

Mnuchin, a former Goldman Sachs partner and owner of the bank OneWest, has been consistently criticized by bank regulators for mistreating homeowners, according to Politico. During the height of the housing crisis, the bank aggressively foreclosed on a number of homeowners, leading some to claim the bank purposefully did not work in the favor of the American people.

“We’re just coming out of a foreclosure crisis and a serious economic downturn. It’s not the time to appoint someone who sided with corporate America over real people,” Alys Cohen, an attorney with the National Consumer Law Center, told Politico. “Mr. Mnuchin comes from Wall Street and has served monied interests over homeowners.”

Ossie Lofton, 90, saw these "monied interests" first-hand after taking out a reverse mortgage with OneWest. A reverse mortgage is a type of loan for the elderly that gives the homeowner payments each month. After some confusion with insurance coverage, the bank sent her a bill for $423.30. After sending in a check for $423, the bank tried to collect on the missing 30 cents. Due to some confusion, Lofton only sent in a check for 3 cents. The bank promptly foreclosed on her in November 2014.

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The nonprofit Florida Rural Legal Services took up her case, and the bank dropped the action, according to the Daily Mail. Lynn Drysdale, Lofton's attorney, called OneWest's actions "criminal."

"I don’t know that they’re the worst, but I certainly think it’s criminal the way these servicers are treating elderly homeowners," she said.

OneWest has since merged with CIT Bank NA, a deal that made Mnuchin more than $10 million. 

Mnuchin was Trump's finance chairman during his campaign and was considered to be a top contender for the cabinet position, according to the Los Angeles Times. 

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Dennis Kelleher, chief executive of a nonprofit advocating for tighter regulation on Wall Street, called the pick a "flip-flop of historic proportions."

"We had candidate Trump who got elected promising to drain the swamp of special interests," Kelleher said. "Now we have President-elect Trump promoting the biggest swamp-dwellers into his administration."

Mnuchin promises that his top priorities as treasury secretary would be to create jobs and to boost the economy through tax cuts and looser financial regulations.

"We’re really going to be focused on economic growth and creating jobs," he said. "Our most important priority is sustained economic growth."

Mnuchin predicts the economy will sustain a growth rate of 4 percent, two times faster than the economy has grown since President Barack Obama took office. 

Sources: Daily Mail, Politico, Los Angeles Times / Photo credit: Jason Pratt/Flickr

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