The battle surrounding President Donald Trump’s U.S. Treasury Secretary pick Steven Mnuchin is nearing an end as the nomination finally cleared to move before the Senate floor.
The months of attacks from Democrats all culminated to Democrats ultimately boycotting Mnuchin’s nomination vote this week after an article came out raising flags about his alleged role in robo-signing during the crisis and reportedly “lying” to the Senate Finance Committee about it.
But robo-signing isn’t a black and white situation, as HousingWire knows well since it first coined the word in the media back in 2010.
As a quick recap of Mnuchin’s history, after leaving Goldman Sachs in 2002, Mnuchin founded Dune Capital Management, a private equity firm.
Mnuchin and his partners at Dune Capital formed OneWest after buying the remains of IndyMac Federal Bank from the Federal Deposit Insurance Corp. in 2009.
Mnuchin and his partners eventually sold OneWest to CIT Group in 2015.
Of the timeline above, the main disagreements around Mnuchin have focused on when he was a former chairman of OneWest, which has been called into question since his name was tossed out to potentially lead the Treasury.
He was only rumored to be the leading candidate to lead the Treasury when OneWest was accused of violating the federal fair housing laws by redlining minority neighborhoods and engaging in discriminatory lending practices, according to two housing advocacy groups.
The situation would soon escalate to Senate Democrats collecting complaints from consumers about Mnuchin and OneWest Bank in preparation for Mnuchin’s confirmation hearing, dubbing him the “foreclosure king” due to his role in his bank’s foreclosures during the housing crisis.
Mnuchin addressed these attack in his confirmation hearing saying his bank made “every effort” to prevent foreclosures during his time there.
But after his hearing, the situation only got more heated.
The Columbus Dispatch published a story on Jan. 29, 10 days after his hearing, which claims that Mnuchin lied to the members of the Senate Finance Committee during his testimony when questioned about the foreclosure practices of OneWest.
Here’s an excerpt of the Columbus Dispatch article:
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.
"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 article was enough for Senate Democrats to reschedule Monday’s vote, which was one day after the article came out, to Tuesday, which Democrats then proceeded to boycott.
Wednesday morning Senate Finance Committee Republicans managed to skirt around the boycott and voted to recommend the nomination of Steve Mnuchin to the full Senate.
HousingWire's expert source defined robo-signers as mortgage servicers who “just sign everything in sight, but the legal system requires that they actually know the information."
At the time, many mortgage servicers robo-signed as a general practice. Back then, it was considered a common corporate conveyance. Today it is widely considered inappropriate.
Instead looking at the bigger picture of OneWest, at least one industry insider and leader defended Mnuchin’s past, saying it wasn’t too different from standard practice during the crisis.
Movement Mortgage CEO Casey Crawford penned a blog for The Hill to try and put an end to everyone calling Mnuchin the “foreclosure king” and instead give him the credit he deserves.
“Mnuchin’s record as a financial executive is clear. He stepped into a tough situation with his own private capital and that of his investors, saved hundreds of thousands of homes and took on the big banks to do so. He is an entrepreneur who saw an opportunity to save a failing company, serve struggling families and boost our weak economy,” said Crawford.
When Senate Republicans finally decided to bypass the Democrat’s boycott, Republican Orrin Hatch, R-Utah, chairman of the Senate Finance Committee, put out the following statement on the situation:
With Mr. Mnuchin, we’ve heard a lot about “robo-signing” in the past couple days. What we haven’t heard is a fixed definition as to what constitutes “robo-signing.” That’s because no fixed definition exists. It is a vague label casually thrown around to refer to a broad set of practices. There is no agreed upon standard – legal or otherwise – as to what constitutes “robo-signing.” Therefore, any question that simply throws out the term without specifically explaining what is meant by it is not only poorly written, it is inherently vague.
In his answer to a colleagues’ vague written question, Mr. Mnuchin stated that OneWest did not engage in the practice and referred to a government review of practices that provide an analog for the loose notion of “robo-signing.” According to the measures utilized in that review, OneWest did not engage in “robo-signing.”
In other words, Mr. Mnuchin provided an honest answer.
Pending any unforeseen circumstances, Mnuchin’s vote will go before the full Senate and likely pass, making him the next Treasury Secretary. Will the robo-signing ghosts finally rest in peace?
