Steven Mnuchin

The Foreclosure King

Trump’s Secretary of Treasury

Steven Mnuchin is President Donald Trump’s nominee for Treasury Secretary. He is an out-of-touch, wealthy, mortgage banker who made tens of millions of dollars foreclosing on the homes of hard-working Americans during the financial crisis. From Arizona to Nevada to Florida, Mnuchin’s bank uprooted families in a merciless attempt to pad its bottom line. And what did Mnuchin do with all that money? He bought enormous and expensive homes, extravagant artwork, and contributed hundreds of thousands of dollars to politicians like President-elect Donald Trump.

Mnuchin Is a Wall Street Insider Who Made Millions by Foreclosing on Family Homes During the Financial Crisis. Like Trump, He Was Drawn to the Glitz and Glamor of Hollywood.

Despite repeatedly attacking the “rigged” system of Wall Street insiders, K Street lobbyists, and corrupt politicians during his campaign, President-elect Trump selected Wall Street insider Steven Mnuchin as his nominee for Treasury Secretary. Mnuchin previously worked as a mortgage banker and dramatically increased his wealth during the last financial crisis by assigning most of the risk to the government while he reaped the rewards. [Ylan Q. Mui and Max Ehrenfreund, “Trump Nominees Map Out Plans for Tax Revamp, Trade,” Washington Post, December 1, 2016; and “Money Machine: Big-Name Investors Have Transformed the Assets of Failed IndyMac into Banking Powerhouse OneWest–With Help from a Sweet Deal from the FDIC,” Los Angeles Business Journal, June 20, 2011.]

A Former Goldman Sachs Banker, Mnuchin Created a Hedge Fund That Sought to Profit from the Financial Crisis . . . and Hollywood?

Mnuchin Was a Goldman Sachs Partner Before Starting His Own Hedge Fund, Which Is Named After a Spot Near His House in the Hamptons and That “Spun Out of Soros Fund Management.” It Had Offices Overlooking the Rockefeller Center Skating Rink.

  • Mnuchin, after graduating from Yale, went to work at Goldman Sachs, where he was a mortgage banker. He became a partner before leaving in 2002 “to work for two hedge funds,” one of which was Soros Fund Management, LLC. In 2004, Mnuchin “founded his own hedge fund, Dune Capital Management, named for a spot near his house in the Hamptons, and got hundreds of millions of dollars from Soros.” In fact, it “spun out of Soros Fund Management.” The hedge fund’s first offices overlooked the Rockefeller Center skating rink. [Lore Croghan, “Bank’s Threats Bring Tax Break,” New York Daily News, November 17, 2004; Joel Chernoff, “No Plain Vanilla Portfolios Here,” Pensions & Investments, August 7, 2006; Max Abelson and Zachary Mider, “Trump’s Top Fundraiser Eyes the Deal of a Lifetime,” Bloomberg Politics, August 31, 2016; and Rachel Louise Ensign, Anupreeta Das, and Rebecca Ballhaus, “Steven Mnuchin’s Defining Moment: Seizing Opportunity from the Financial Crisis,” Wall Street Journal, December 1, 2016.]
  • Dune Capital Management co-owned Capmark Financial Group, which had been created in March 2006, near the peak of the real estate market. It went bankrupt in 2009 after collapsing “‘under the weight of the [bad real estate] loans it made and the debt that [had] financed its leveraged buyout’” by the group that included Dune Capital Management. [Joseph N. DiStefano, “How Goldman Sachs, KKR Wrecked Capmark: Report,” Philadelphia Inquirer, October 27, 2009.]
  • “Mnuchin’s entry into Hollywood was the second act in his career.” He used Dune Capital Management to finance movies. Mnuchin was the executive producer of Get Hard, which trivializes prison rape. “Will Ferrell’s . . . comedy Get Hard has been branded both racist and homophobic by critics as it deals with a rich white man who is sent to the terrifying San Quentin prison for 10 years. Ferrell’s character approaches the only black man he knows, played by the comedian Kevin Hart, to help him prepare for life behind bars.” As one critic said, “‘It’s an absolutely horrible, amateurishly assembled comedy that is more offensive than just about anything we’ve seen lately, a non-stop parade of racist, homophobic bile.’” [Darren Boyle, “Is Will Ferrell’s New Film Racist? Comedy Get Hard Sparks Controversy at SXSW Screening,” Daily Mail, March 18, 2015; Greg Gilman, “Get Hard Reviews: Critics Slam Will Ferrell, Kevin Hart Prison Farce,” The Wrap, March 26, 2015; Kevin Lincoln, “Donald Trump’s Pick for Treasury Secretary Produced Suicide Squad,” Vulture, November 30, 2016; and “Steven Mnuchin” biography, Internet Movie Database website, accessed December 12, 2016.]
  • “Some acquaintances . . . [think] that Mnuchin gradually has become more enamored of show-business glitter. ‘It’s not the first time a middle-aged financier came to Hollywood and got caught up with the glamour and excitement,’ says one industry veteran who knows Mnuchin. Says another: ‘He’s changed. He became that dude.’” Five years after starting Dune Capital Management, Mnuchin “moved from New York to Los Angeles when he took the helm of OneWest in 2009. He bought a 23,000-square-foot, $26.5 million home in Bel Air, complete with a ballroom, and ended his 15-year marriage to the mother of his three children.” He became co-owner of a Falcon 50 jet. He “took up residence at the Hotel du Cap during the Cannes Film Festival” and is a regular “at the see-and-be-seen Tower Bar restaurant on Sunset Boulevard.” [Kim Masters, “Inside Steven Mnuchin’s Hit-and-Miss Path From Hollywood to Treasury Secretary Pick,” Hollywood Reporter, November 29, 2016.]

Mnuchin Bought a Bank During the Financial Crisis, Profited While the Federal Government Absorbed Loan Losses, “Came Under Fire for . . . Foreclosure Practices,” and Discriminated Against Blacks and Hispanics

  • OneWest “came under fire for its foreclosure practices.” It “foreclosed on over 35,000 homeowners in California, including seniors and surviving spouses who had reverse mortgages with a subsidiary of OneWest.” The high number of foreclosures is “not surprising, since nonprofit housing counselors consistently ranked OneWest as one of the most difficult servicers to work with in helping homeowners avoid foreclosure.” A judge in a foreclosure case said OneWest committed “‘harsh, repugnant, shocking and repulsive’ acts,” and called the “bank’s conduct ‘inequitable, unconscionable, vexatious and opprobrious.’” In another case, OneWest foreclosed on a 90-year-old woman over 27 cents. [Kiernan Crowley, “Judge Blasts Bad Bank, Erases 525G Debt,” New York Post, November 25, 2009; Kevin Stein and Daniel Rodriguez, “Is the FDIC Subsidizing a ‘Too Big to Fail’ Merger?American Banker, November 20, 2014; David Lawder, “Trump Expected to Name Former Goldman Banker Mnuchin for Treasury,” Reuters, November 29, 2016; and Lorraine Woellert, “Trump Treasury Pick Made Millions after His Bank Foreclosed on Homeowners,” Politico, December 1, 2016.]
  • OneWest has foreclosed on numerous elderly people, including some who lived in their homes for decades and could have stayed in their homes with the help of government-assisted loan modifications. Some of these people were deceived by OneWest employees and had their homes sold out from under them without their knowledge. For example, “Rex Schaffer, 86, and his wife Rose were among those who lost their homes, in a OneWest foreclosure. After living nearly 50 years in their home in La Puente, Calif., the Schaffers took a home equity loan but struggled to make the payments. They say they qualified three times for a government assisted modification, but OneWest failed to modify the loan. ‘It was a disaster dealing with those people,’ Rex Shaffer says. ‘We’d have a different person every time we called in.’ He counted 33 OneWest employees, in all, and each one would give him ‘a different story.’ Facing threats that their home would be auctioned off, the Schaffers finally got through to a OneWest vice president. According to Rex Shaffer, the VP said, ‘I’m going to get you a 60-day extension on the sale date, so we can work this thing out.’ That was on Feb. 17, 2011. But the next day, the Schaffers’ house was sold without their knowledge. ‘We didn’t even know it–didn’t have the faintest idea,’ Rex Shaffer says.” [John Ydstie, “Trump’s Potential Treasury Secretary Headed A ‘Foreclosure Machine’National Public Radio, November 29, 2016.]
  • OneWest even foreclosed on an elderly widow despite court orders telling the bank to stop. More specifically, in 2009 OneWest repeatedly tried “to foreclose on an elderly widow’s house despite two court orders telling them to stop.” Irene Jones, 89, said stress from the repeated threats of foreclosure “made her husband depressed and may have contributed to his death.” [Maria Dinzeo, “Bank Won’t Quit Demands on Elderly Widow,” Courthouse News Service, November 23, 2009.]
  • In the past, OneWest has foreclosed on people who followed their often contradictory directions. For example, Katrina Perkins Steinberger sued OneWest in Arizona, claiming she followed the bank’s directions to have her mortgage modified, but the bank proceeded to foreclose on her for following their directions. Making matters worse, the bank regularly mishandled her applications and other paperwork. In another example, Teena Colebrook of Hawthorne, CA, spent five years unsuccessfully trying to adjust her OneWest loan through the Home Affordable Modification Program, but OneWest “lost” the paperwork, gave “conflicting statements about ownership of the loans and fees, and submitted charges that were unverified and caused her loan balance to balloon.” When OneWest foreclosed in 2015 she owed $517,662 on her $248,000 house. [Steinberger v. McVey, 234 Ariz. 125; and Josh Boak and Jeff Horwitz, “Trump Voter Lost Home, Blames Incoming Treasury Secretary,” Associated Press, December 5, 2016.]
  • OneWest has foreclosed on people going through temporary hardships who could pay their mortgages if they went through a loan modification program. For example, OneWest tried to foreclose on Rose Gudiel, who “missed her mortgage payments after her younger brother was fatally shot and she was furloughed from her state government job. Gudiel said she was applying for a loan modification when OneWest issued a notice that it would foreclose.” After extensive news coverage and protests she got “a loan modification and [said she] hasn’t missed a payment since receiving it.” [Ylan Q. Mui and Renae Merle, “With Treasury Candidate Come Possible Conflicts,” Washington Post, November 17, 2016.]
  • At a Federal Reserve Board hearing in 2015, “visibly shaken borrowers, some of them on the verge of tears, described trying to get a response from OneWest Bank about home loan modifications and reverse mortgages.” In one example, “Helen Kelly, a former Minnesota prosecutor who lives in Pleasanton, Calif.,” described OneWest as “criminals” who “should be in jail.” Kelly “alleged that OneWest refused to offer her a loan modification, and tried to foreclose on her home until she contacted the Office of the Comptroller of the Currency and ultimately got relief in 2011.” [Kate Berry, “The Big Surprise at CIT-OneWest Merger Hearing: Lots of Support,” American Banker, March 2, 2015.]
  • “Problematic reverse mortgage servicing” by OneWest affiliate Financial Freedom “has led to over 2200 foreclosure sales on seniors in California. Disturbingly, Financial Freedom does not meaningfully allow for surviving spouses not listed on the loan to remain in the home.” [California Reinvestment Coalition, Letter in Opposition to CIT Group Application to Acquire IMB and OneWest Bank, October 10, 2014.]
  • “‘Dual tracking’–negotiating with a homeowner while pursuing foreclosure–violates federal servicing statutes,” yet OneWest has been caught doing it to customers, such as Leslie Parks in Minneapolis, MN. [David Dayen, “Donald Trump’s Finance Chair Is the Anti-Populist From Hell,” New Republic, May 9, 2016.]
  • OneWest foreclosed “on 36,000 households in California alone, plus an unknown number around the country, according to the California Reinvestment Coalition, a housing advocacy group that . . . dubbed OneWest a ‘foreclosure machine.’” Many of these foreclosures were questinable. “OneWest was involved in a string of lawsuits over questionable foreclosures, and settled several cases for millions of dollars.” [Andrew Ross Sorkin, “Donald Trump’s Pick for Fund-Raiser Is Rife With Contradictions,” New York Times, May 9, 2016: and Victoria McGrane, “Democrats Say They’ll Take Aim at Trump’s Treasury Pick,” Boston Globe, December 1, 2016.]
  • OneWest “routinely jumped to foreclosure rather than pursue options to keep borrowers in their homes; used fabricated and ‘robo-signed’ documents to secure the evictions; and had a particular talent for dispossessing the homes of senior citizens and people of color.” [David Dayen, “Donald Trump’s Finance Chair Is the Anti-Populist From Hell,” New Republic, May 9, 2016.]
  • “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 thirty 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.” [David Dayen, “Donald Trump’s Finance Chair Is the Anti-Populist From Hell,” New Republic, May 9, 2016.]
  • “OneWest was charged by federal regulators with filing false documents during foreclosures. Employees also failed to make sure they had the correct loan documentation before the bank seized a home.” The bank “eventually admitted its wrongdoing in a consent decree with regulators.” [Chris Isidore, “As Treasury Pick, Steven Mnuchin May Get Questions about How He Ran His Own Bank,” CNN Money, November 23, 2016.]
  • OneWest employees claimed that OneWest executives had instructed them “to reject as many loan modification applications as possible and created an environment that encouraged loan modification staff to misinform borrowers about their eligibility status, routinely shred loan modification applications, and inappropriately deny loan modifications.” [FDIC Office of Inspector General, “Audit of OneWest Bank’s Loan Modification Program,” Report No. EVAL-11-004, July 2011.]
  • In 2011 the Office of Thrift Supervision [OTS] found that OneWest “failed to devote sufficient financial, staffing and managerial resources to ensure proper administration of its foreclosure processes” and “failed to devote to its foreclosure processes adequate oversight, internal controls, policies, and procedures, compliance risk management, internal audit, third party management, and training.” It also found that OneWest filed improper affidavits in court in foreclosure cases and improper foreclosure-related documents with local governments. [In the Matter of One West Bank, FSB, Consent Order, Order No. WN-11-011, OTS Docket No. 18129, April 13, 2011.]
  • OneWest Bank “discriminated against blacks, Hispanics, and Asians”; made very few loans to minorities; and “avoided putting branches in minority communities, according to a federal complaint.” [Lorraine Woellert, “Mnuchin-Founded Company Accused of Housing Discrimination,” Politico, November 17, 2016.]
  • “‘I work with hundreds of consumers who share a common experience with OneWest Bank—a deliberate failure to comply with consumer protection laws and regulations or provide any level of customer support,’ said Sandy Jolley, a reverse mortgage suitability and abuse consultant and a certified HUD reverse mortgage counselor.” [Kevin Smith, “Protesters Gather to Oppose OneWest Merger with CIT Group,” Pasadena (CA) Star-News, December 17, 2014.]
  • “Housing counselors from California serving thousands of homeowners in distress have rated [OneWest Bank] among the worst servicers, according to surveys conducted . . . over the years.” In 2010 “thirty housing counselors cited OWB as the worst offender for not offering affordable loan modifications, more than all fifteen of the other servicers surveyed combined. Later that year, only two servicers received more votes than OWB from housing counselors for being the most difficult servicer to work with in trying to help homeowners avoid foreclosure.” In 2012 “95% of responding counselors said OWB was ‘terrible’ or ‘bad.’” [California Reinvestment Coalition to Janet Yellen, et al., Letter in Opposition to CIT Group Application to Acquire IMB and OneWest Bank, October 10, 2014.]

Mnuchin Benefited from Bernie Madoff’s Ponzi Scheme

Mnuchin Is a Wall Street Insider Who Advocates for Complex Financial Instruments That Helped Bring Down the Economy in 2008, Not a Published Expert on Financial or Economic Matters

  • Mnuchin has not written any books or articles that can be found in LexisNexis or WorldCat, two of the world’s largest catalogs of journal articles and books. [Based on searches in LexisNexis and WorldCat on December 11, 2016; and “What is WorldCat,” WorldCat website, accessed December 11, 2016.]
  • Mnuchin “was front and center for the advent of instruments like collateralized debt obligations (CDOs) and credit default swaps (CDSs), which he calls ‘an extremely positive development in terms of being able to finance different parts of the economy and different businesses efficiently.’” Such instruments helped bring down the economy in 2008. [Karl Taro Greenfeld, “From IndyMac to OneWest: Steven Mnuchin’s Big Score,” Bloomberg, March 22, 2012.]

Mnuchin Is a Wealthy, Out-of-Touch Elitist with a Taste for Expensive Real Estate and Contemporary Art

Despite attacking elites during his campaign, President-elect Trump’s pick for Treasury Secretary, Steven Mnuchin, is a wealthy elitist with extravagant tastes and a warped, out-of-touch worldview.

Mnuchin’s Childhood “Makes Trump’s Deluxe Childhood Look Ordinary” 

  • Mnuchin “was born into a level of privilege that makes Trump’s deluxe childhood look ordinary. His grandfather, an attorney, co-founded a yacht club in the Hamptons, and his father, Robert, was a top Goldman Sachs trader who later became an art dealer.” [Max Abelson and Zachary Mider, “Trump’s Top Fundraiser Eyes the Deal of a Lifetime,” Bloomberg Politics, August 31, 2016.]

In the Late 1990s Mnuchin Purchased for $10.5 Million “a 6,500-Square-Foot Apartment in a Famous Park Avenue Building” That Requires Liquid Assets of at Least Four Times the Purchase Price, and Ran “in the Same Philanthropic and Social Circles” as Donald Trump

Contemporary Art Collector Mnuchin Has a Net Worth “Estimated at $40 Million,” Summered in the Hamptons, Owns a $26.5 Million, 23,000 Square-Foot Mansion with a Ballroom in California, Celebrated His Engagement with a Champagne-and-Caviar Party at the Beverly Hills Hotel, and Criticized a Staffer for Wearing Gucci Shoes Because They Were “Unserious”

  • Mnuchin had a “growing collection of contemporary art,” including “pieces by Teresita Fernández, Vincent Desiderio, Mark Innerst, and Lisa Yuskavage.” [Stephen Henderson, “Tour a Southampton Home Where East Meets West,” Hamptons Cottages & Gardens, September 2011.]

Mnuchin Made $200 Million from the Sale of OneWest and $11 Million in Severance for a Few Months at the Company that Merged with OneWest

  • Steven Mnuchin “may have personally gotten more than $200 million in proceeds from the sale” of OneWest to CIT Bank, “according to Bloomberg calculations. That doesn’t count any dividends or payments he might have received as chairman and chief executive officer of OneWest’s parent company.” [Zachary Mider, “Nominating Mnuchin for Treasury Will Dredge Up Mortgage Meltdown Controversies,” Bloomberg Politics, November 22, 2016.]
  • When OneWest merged with CIT Bank in 2015, Mnuchin became the vice chair of CIT. When Mnuchin stepped down soonthereafter, he “received a $10.9 million severance package from CIT for less than one year’s work as vice chair.” [David Dayen, “Donald Trump’s Finance Chair Is the Anti-Populist From Hell,” New Republic,  May 9, 2016.]

Trump Picked GOP Mega-Donor Mnuchin Despite His Repeated Attacks on the GOP Establishment

Despite repeatedly attacking the Republican establishment during the campaign, President-elect Trump’s nominee for Treasury Secretary is a GOP mega-donor.

Mnuchin Donated More Than $250,000 to Federal Candidates, Committees, and PACs, Including Contributions to House Speaker Paul Ryan, Former GOP Presidential Candidate Mitt Romney, and the RNC

  • Mnuchin has given more than $250,000 to federal candidates and committees over the last twenty years, including contributions to Paul Ryan, Mitt Romney, and the Republican National Committee. [Based on Data from Political Money Line]

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