Steve Mnuchin Confirms Treasury Secretary Nod
While I’m not a Dodd-Frank fan, it’s not because it was too harsh, but because it didn’t really do much of anything. It was the typical neoliberal bait and switch, designed to look tough for public consumption, while merely making tweaks around the edges of a financial system that requires systemic, paradigm level change.
Trump’s support of repealing Dodd-Frank tells you all you need to know. A Trump Presidency will see Wall Street felons who should be in prison, running as wild and free as ever.
He will be the same thing to distressed working class whites that Obama was to the black community. A fake messiah and a shyster.
– From May’s post: Donald Trump’s True Colors Emerge as He Snuggles up to Wall Street
The fact that Steve Mnuchin was a Goldman Sachs partner is the least of my concerns when it comes to the man. Indeed, if someone wanted to create a playing card deck of sleazy Wall Street financial crisis opportunists, it’d be hard not to include Steve Mnuchin.
What exactly am I talking about? Specifically, I’m referring to the collapse of IndyMac (renamed One West), and the generous helping of government welfare Mnuchin and his partners received upon purchasing the failed banking institution. This is a financial crisis saga that is unknown to most, despite having received some extensive coverage over the past year. One of the best articles on the topic was written by David Dayen in his piece, Donald Trump’s Finance Chair Is the Anti-Populist From Hell. Here are a few excerpts:
When I heard Mnuchin’s name last week, I immediately remembered the front lawn of his mansion. Back in 2011, local housing activists and the Occupy movement in Los Angeles camped out on that lawn to save the home of Rose Mary Gudiel, a La Puente, California, resident who faced eviction after being just two weeks late on one mortgage payment. The activists threatened to move all of Gudiel’s furniture into Mnuchin’s $26 million Bel Air estate if the eviction wasn’t stopped. Twenty police officers and a helicopter met the protesters.
Why was Mnuchin’s front lawn the focal point for the protest? Because years after forming Dune Capital in 2004, Mnuchin’s hedge fund purchased the failed lender IndyMac, one of America’s largest home lenders and a leading distributor of Alt-A mortgages, a subprime hybrid which did not require borrowers to accurately state their incomes. After IndyMac failed, Dune led the investment group that purchased it from the Federal Deposit Insurance Corporation (FDIC) in 2009, renaming it OneWest Bank. Mnuchin became OneWest’s principal owner and chairman.
OneWest accomplished these foreclosures through fraud. Erica Johnson-Seck, a vice president of foreclosure and bankruptcy for OneWest, explained in a July 2009 deposition that she “robo-signed” 6,000 foreclosure-related documents per week, spending just 30 seconds on each sworn affidavit that attested to the veracity of all relevant information in the case. Johnson-Seck admitted to not reading the documents before signing them, to not knowing how the records were generated, and to not signing in the presence of a notary, all of which made the affidavits she signed false evidence in court.
The OneWest subsidiary Financial Freedom executed 39 percent of all foreclosures on reverse mortgages between 2009 and 2015, despite servicing only 17 percent of the market, according to data from the Department of Housing and Urban Development (HUD) obtained by the California Reinvestment Coalition. OneWest disclosed in its most recent annual report that it’s under investigation for this disproportionate share of “widow foreclosures” by HUD’s Inspector General. The victims include 103 year-old Myrtle Lewis of North Texas, who OneWest put into foreclosure after her insurance coverage lapsed; Karen Hunziker, who got a foreclosure notice from OneWest ten days after her husband passed away in 2014; and a host of others.
Trump’s loyal fans aren’t likely to scrutinize Mnuchin’s record, but they should. You can measure political candidates in part by who they associate with. The foreclosure history in Mnuchin’s past reflects an extreme mentality of profit at all costs, and hardly a viewpoint of standing up for the little guy. Trump as populist was always something of a pose, covering for a deep nationalism and antipathy to immigrants. The Mnuchin pick just brings that into sharper relief.
Trump’s main money-chaser has profited off the suffering of ordinary Americans for years. There’s no reason to believe Trump will offer a better deal to the working class.
Moreover, an article published in The Nation covered some details of the sweetheart deal the government gave Mnuchin and team for the privilege of turning around to abuse average Americans. Here’s an excerpt from, The Worst of Wall Street: Meet Donald Trump’s Finance Chairman.
The California Reinvestment Coalition—a nonprofit organization that pushes banks to reinvest in low income communities and communities of color—determined from Freedom of Information Requests that the FDIC had already paid out over $1 billion to reimburse OneWest for the cost of over 35,000 foreclosures in California and an unknown number in other states. CRC also estimated that the FDIC will eventually pay out another $1.4 billion for the costs associated with even more foreclosures in the future.
OneWest opened its doors with 33 branches and roughly $16 billion in assets. Mnuchin engineered its growth by purchasing two other failed institutions—First Federal Bank of California and La Jolla Bank—getting the FDIC to agree again to additional “loss share” arrangements so that the owners had little to lose. After these purchases, OneWest had 73 retail branches and $26 billion in assets. It also serviced billions of dollars of mortgage loans on the behalf of third parties, such as Fannie Mae. In multiple surveys of California housing counselors, OneWest was ranked among the worst mortgage servicers in the state.
Nice deal if you can get it. Oh, and there’s also this.
In CIT Group’s most recent annual report, the bank disclosed that it had received multiple subpoenas in 2015 from the Office of Inspector General at the federal Department of Housing and Urban Development (HUD) related to the servicing of reverse mortgages by Financial Freedom.
CRC’s Gonzalez said that, in light of Mnuchin’s new role in the Trump campaign, “HUD should release more information about its investigation of OneWest’s subsidiary.”
Believe it or not, it gets even more interesting from here. For example, you may be interested to know who one of Mnuchin’s partners was in the IndyMac deal. Yep, you guessed it: George Soros.
The Wall Street Journal reports:
In 2008, IndyMac Bank in Pasadena, Calif., collapsed in one of the largest bank failures in U.S. history. Mr. Mnuchin led a group of investors, including funds run by Mr. Soros and other hedge-fund and private-equity titans, who bought it from the government for about $1.5 billion. The Federal Deposit Insurance Corporation agreed to cover a portion of any future loan losses, a lucrative arrangement for Mr. Mnuchin and his partners. Regulators who negotiated with Mr. Mnuchin found him to be the kind of detail-oriented person who would “know the cost of every pencil,” according to a person familiar with their thinking.
Considering many diehard Trump supporters consider Soros to be the spawn of Satan, I’m curious to see the intellectual contortions necessary to justify this relationship.
Moving along, the sad thing is none of this is surprising to me. From day one, I felt that Trump was way too cozy with Wall Street, and wouldn’t do a thing to rein in financial sector abuses. I warned about it on several occasions. See:
- Draining the Swamp? Wall Street is Already Loving Donald Trump
- Donald Trump’s True Colors Emerge as He Snuggles up to Wall Street
- A Nation of Sheep, Afraid of Words
In light of this appointment, I want to revisit something I wrote in a recent post:
If you give cover to Trump to appoint swamp creatures to his cabinet, you have no right to criticize Obama for having done the same. Let’s grow up and start rallying around ideas, not cheerleading political figures.
You can actually participate in the global efforts to cripple the Deep State organized criminal cabal's ability for genocide, while enjoying healthcare freedom at the same time, by boycotting Big Pharma for good.