Trump’s treasury pick headed ‘foreclosure machine’
Steve Mnuchin made money by throwing people out of their homes.
Mnuchin spent 17 years at Goldman Sachs, ultimately as a partner at the investment bank. More recently, he’s headed a privately owned hedge fund, Dune Capital Management. Last April he became Trump’s chief fundraiser, and he’s now a member of the president-elect’s transition team.
But Mnuchin’s resume also includes a stint as chairman and CEO of a California bank that’s been called a foreclosure machine.
During the depths of the financial crisis, Mnuchin was looking to make profits from the ruins of the housing bust. In 2009, he put together a group of billionaire investors and bought a failed California-based bank, IndyMac. It had been taken over by the Federal Deposit Insurance Corp. after its sketchy mortgage loans went bad.
Mnuchin and his partners bought IndyMac on the condition that the FDIC agree to pay future losses above a certain threshold. They renamed the bank OneWest Bank and, after running it for six years, they sold it last year for a profit, estimated at close to $1.5 billion.
Kevin Stein of the California Reinvestment Coalition, a housing advocacy group, says that profit was made on the backs of suffering California homeowners. “In essence what they did is they bought a foreclosure machine,” he says.
According to the coalition, OneWest foreclosed on more than 36,000 homeowners under Mnuchin. During that time, the FDIC made payments to OneWest totaling more $1 billion. Those payments went to the “billionaire investors of OneWest Bank,” says Stein, “to cover the cost of foreclosing on working-class, everyday, American folks,” many of whom lived in California.