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 Lies, Damn Lies, and Mnuchin
Further Proof Trump Treasury Nominee Steven Mnuchin Is "Robo-Misleading" the U.S. Senate

Executive Summary

On February 1, the Senate Finance Committee suspended its rules regarding quorum requirements for
nomination votes to advance President Trumps nominee for Treasury Secretary, Steven Mnuchin, to
the full Senate for a confirmation vote. The move allowed Republicans to avoid involving Democrats in
the confirmation markup process since at least one member of that party would need to be present to
reach a quorum and proceed.1

The Republican power play followed a boycott of the confirmation markup the day before by committee
Democrats who were rightfully angry at Mnuchin for his lack of honesty with the committee following
reports from both The Columbus Dispatch and The Intercept that revealed Mnuchin willfully misled
senators about the foreclosure practices of his former bank: contrary to his repeated denials, OneWest
did, in fact, robo-sign foreclosure documents.2

Hours after the procedural protest from committee Democrats, CNN reported that Mnuchin admitted
during a private meeting with Senate Finance Committee staff that his responses to the committee had
not been true, accurate and complete.3

Since the procedural fireworks in the Senate Finance Committee, several additional examples have been
unearthed indicating Mnuchin was not honest with senators about OneWests history of robo-signing
foreclosure documents. This report details those findings, including:

In additional to Ohio and Texas cases reported by The Columbus Dispatch and The Intercept,
OneWest also has been accused of robo-signing documents in numerous court cases,
including cases in California, Massachusetts, and Rhode Island.4

OneWest was temporarily barred from foreclosing in New Jersey after its involvement in a
robo-signing scandal.5

OneWests outsourcing vendor, Lender Processing Services (LPS), was entangled in a
massive robo-signing scheme in Nevada. OneWest was named in a class action lawsuit in
which LPS was accused of robo-signing foreclosure documents.6

Despite claiming his bank never robo-signed mortgages, Mnuchin signed a document in 2011
in which the United States Office of Thrift Supervision found that OneWest had filed or caused
to be filed potentially false affidavits not based . . . on personal knowledge or review of
relevant books and records. Mnuchin hired an independent consulting firm that wrote a
report to support his claim that OneWest had never robo-signed documents, but just 2 percent
of OneWests relevant mortgages were reviewed for that portion of the report. Furthermore,
one of the co-owners of OneWest had a financial stake in the company that did the
independent analysis.7

LIES, DAMN LIES, AND MNUCHIN | ALLIED PROGRESS | 1

 The Details: More Evidence Mnuchin Hasnt
Been Honest With Senators About Robo-Signing

Mnuchins OneWest Has Been Accused of Robo-Signing Documents in Numerous Court

Cases in California, Massachusetts, Nevada, New Jersey, Ohio, Rhode Island, and Texas

OneWest was accused of robo-signing after the bank foreclosed on Rhonda Mills Massachusetts
home in 2011. Mills filed suit against OneWest, alleging that a known robo-signer employed
by the bank had signed her documents in 2009.8

Kevin Hughes sued OneWest Bank, alleging the bank had used an admitted and known robo-
signer to fabricate documents in order to foreclose upon his California home in 2009.9

OneWest was accused of robo-signing by Carol Stoner, who alleged in a lawsuit that the bank
had begun to foreclose on her home in 2009, by using documentation signed by a well-known
robo-signer, not in front of a notary and not on the date of her signature.10

Kenneth Henning sued OneWest Bank in 2010, alleging that OneWest was using documentation
signed by a notorious robo-signer in order to get him to default on his home loan on his home
in Texas, which he contended was proof of OneWests intent to mislead and rely on fraudulent
documents.11

In 2010, Clara Akalarian sued OneWest Bank, alleging that the person who executed foreclosure-
related documents was a robo-signer, and that OneWest had wrongly started to foreclose
upon her Rhode Island home.12

During the 2012 bankruptcy proceedings of Morris Maxwell, the court ruled that Erica Johnson-
Seck, an admitted robo-signer, had executed the mortgage on Morris Maxwell, whose home had
been foreclosed upon.13

In 2012, Eliazer Robles and her husband unsuccessfully sued OneWest for fraud and unfair
business practices. They accused OneWest of employing a robo-signer for the foreclosure
documents on their home.14

OneWest Financial Services Inc., was subject to a foreclosure ban in New Jersey after a robo-
signing scandal in 2010.15

Erica Johnson-Seck, OneWests vice president for bankruptcy and foreclosure, said OneWest
hired outsourcing vendor Lender Processing Services. She claimed that firm checks the
documents completely.16

Gary Trafford and Gerri Sheppard of LPS were accused of overseeing teams of so-called robo-
signers and filing tens of thousands of false documents by the Nevada Attorney General in
2011. Nevada Chief Deputy Attorney General John Kelleher said, if banks sanctioned the
alleged robo-signers activities . . . they could be the subject of future actions.17

LIES, DAMN LIES, AND MNUCHIN | ALLIED PROGRESS | 2

 Johnson-Seck says she conducted quality control on LPS and was close friends with an LPS
employee who worked on-site at OneWest in Pasadena, CA.18

In 2010, a division of OneWest was named as a defendant in a Nevada class-action lawsuit that
alleged LPS violated Nevadas Deceptive Trade Practices Act and sought to block pending
foreclosures involving allegedly forged . . . documents and [sought] unspecified damages for
completed foreclosures. The defendants included LPS, one of the nations largest foreclosure
processors, as well as IndyMac Mortgage Services, a division of OneWest Bank.19

Mnuchins OneWest Was Temporarily Barred from Foreclosing on Customers in New Jersey
after Its Involvement in a Robo-Signing Scandal

As previously noted, OneWest Financial Services Inc., was subject to a foreclosure ban in New
Jersey after a robo-signing scandal in 2010.20

Judge Richard J. Williams, in 2011, lifted the New Jersey foreclosure ban on One West Financial
Services and other lenders after he noted that it was impossible for courts to determine which
assertions were accurate in foreclosure proceedings. As a result, Williams created a process for
monitoring servicers foreclosure operations that will involve site visits.21

OneWests Outsourcing Vendor, Lender Processing Services (LPS), Was Entangled in a
Massive Robo-Signing Scheme in Nevada, and OneWest Was Named in a Class Action
Lawsuit in Which LPS Was Accused of Robo-Signing Foreclosure Documents

As previously noted, Erica Johnson-Seck, OneWests vice president for bankruptcy and
foreclosure, said OneWest hired outsourcing vendor Lender Processing Services. She
claimed that firm checks the documents completely.22

Gary Trafford and Gerri Sheppard of LPS were accused of overseeing teams of so-called robo-
signers and filing tens of thousands of false documents by the Nevada Attorney General in
2011. Nevada Chief Deputy Attorney General John Kelleher said, if banks sanctioned the
alleged robo-signers activities . . . they could be the subject of future actions.23

Johnson-Seck says she conducted quality control on LPS and was close friends with an LPS
employee who worked on-site at OneWest in Pasadena, CA.24

In 2010, a division of OneWest was named as a defendant in a Nevada class-action lawsuit that
alleged LPS violated Nevadas Deceptive Trade Practices Act and sought to block pending
foreclosures involving allegedly forged . . . documents and [sought] unspecified damages for
completed foreclosures. The defendants included LPS, one of the nations largest foreclosure
processors, as well as IndyMac Mortgage Services, a division of OneWest Bank.25

Despite Claiming His Bank Never Robo-Signed Mortgages, Mnuchin Signed a Document in
2011 in Which the United States Office of Thrift Supervision Found That OneWest Had Filed
or Caused to Be Filed Potentially False Affidavits Not Based . . . on Personal Knowledge or
Review of Relevant Books and Records

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 On April 13, 2011, the Office of Thrift Supervision (OTS) issued a Consent Order regarding
OneWest Bank FSB. In the order, the OTS listed findings from an examination of the residential
real estate mortgage foreclosure processes of OneWest Bank, FSB. The OTS found that
OneWest:

o Filed or caused to be filed in state and federal courts numerous affidavits executed by
its employees or employees of third-party service providers making various assertions,
such as ownership of the mortgage note and mortgage, the amount of the principal and
interest due, and the fees and expenses chargeable to the borrower, in which the affiant
represented that the assertions in the affidavit were made based on personal
knowledge or based on a review by the affiant of the relevant books and records, when,
in many cases, they were not based on such personal knowledge or review of relevant
books and records.

o Filed or caused to be filed in state and federal courts, or in local land records offices,
numerous affidavits or other mortgage-related documents that were not properly
notarized, specifically that were not signed or affirmed in the presence of a notary.

o Litigated foreclosure and bankruptcy proceedings and initiated non-judicial foreclosure
proceedings without always ensuring that the promissory note and mortgage document
were properly endorsed or assigned and, if necessary, in the possession of the
appropriate party at the appropriate time.

o Failed to devote sufficient financial, staffing and managerial resources to ensure proper
administration of its foreclosure processes.

o Failed to devote to its foreclosure processes adequate oversight, internal controls,
policies, and procedures, compliance risk management, internal audit, third party
management, and training.

o Failed sufficiently to oversee outside counsel and other third-party providers handling
foreclosure-related services.

OneWest neither admitted nor denied the findings, however Steven Mnuchin did sign the Order
on behalf of OneWest.26

As part of the consent order, OneWest agreed that within forty-five days, they would retain an
independent consultant acceptable to the Regional Director to conduct an independent review
of certain residential foreclosure actions regarding individual borrowers with respect to
[OneWests] mortgage servicing portfolio. The review shall include residential foreclosure
actions or proceedings (including foreclosures that were in process or completed) for loans
serviced by [OneWest], whether brought in the name of [OneWest], the investor, the mortgage
note holder, or any agent for the mortgage note holder (including MERS), that have been
pending at any time from January 1, 2009 to December 31, 2010, as well as residential
foreclosure sales that occurred during this time period (Foreclosure Review).27

OneWests independent consultant was Navigant Consulting, Inc.28

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Mnuchin Hired an Independent Consulting Firm That Wrote a Report to Support His Claim
That OneWest Had Never Robo-Signed Documents, but Just 2 Percent of OneWests
Relevant Mortgages Were Reviewed for that Portion of the Report, and One of the Co-
Owners of OneWest Had a Financial Stake in the Company That Did the Analysis

On September 8, 2011, Navigant Consulting, Inc., submitted a Statement of Work to OneWest
concerning an independent review of residential foreclosure proceedings for loans serviced by
One West Bank, FSB (OneWest) and residential foreclosure sales that have been pending or
occurred during the period from January 1, 2009 to December 31, 2010. The statement
comments and guidance received from the Office of the Comptroller of the Currency and
outlined the steps the company would take to review foreclosures.29

Soros Fund Management, LLC, in the quarter that ended on September 30, 2011, disclosed
ownership of 12,300 shares of Navigant Consulting, Inc. valued at $114,000. At the time, Soros
was a co-owner of OneWest Bank.30

During the Confirmation process, Steven Mnuchin was directly asked by Senator Bob Casey of
Pennsylvania, did OneWest robo-sign documents relating to foreclosures and evictions?
Initially Steven Mnuchin responded, OneWest Bank did not robo-sign documents, 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 institutions
extremely low error rate.

In his amended response, Steven Mnuchin attempted to clarify his statement: the concept of
robo-signing generally referred to two distinct but related issues: (a) a signer of a foreclosure
affidavit attested to facts that were not verified to be accurate; or (b) a signer of a foreclosure
affidavit represented himself or herself to be someone else (for example, if the signer was
employed by a company that did not have standing to foreclose but represented himself or
herself as someone with standing to foreclose). Page 14 of the OCCs April 2014 report on the
Independent Foreclosure Review (IFR) demonstrates that OneWest did not do these things.
On the review category services did not have standing to foreclose, OneWests error rate was
zero percent. On the review category that investigated the possibility that foreclosure occurred
without proper facts supporting the foreclosure (Borrower not in default), OneWests error
rate was .001 percent. In fact, for 12 of the 14 categories independently reviewed as part of the
IFR, OneWests error rate was less than 0.5 percent.31

It appears that Mnuchins comments above are based on the independent study by Navigant.
However, Navigant reviewed just 3,836 of the 192,199 cases that fell within the scope of the
review to determine if the Servicer did not have standing to foreclose. This constitutes just
under 2 percent of the total number of mortgages within the scope of review.32

LIES, DAMN LIES, AND MNUCHIN | ALLIED PROGRESS | 5

End Notes
1
MJ Lee, Republicans Suspend Committee Rules, Advance Mnuchin, Price Nominations, CNN, February 1, 2017.
2
Zachary Warmbrodt, Senate Finance Democrats Boycott Mnuchin, Price Votes, Politico, January 31, 2017; Alan Johnson and
Jill Riepenhoff, Trump Treasury Pick Mnuchin Misled Senate on Foreclosures, Ohio Cases Show, Columbus Dispatch, January
29, 2017; and David Dayen, Mnuchin Again Denies Robo-Signing, despite yet More Evidence He Is Lying, The Intercept,
January 30, 2017.
3
Phil Mattingly, Treasury Secretary Nominee's Foreign Money Links Bring New Scrutiny, CNN, January 31, 2017.
4
Mills v. U.S. Bank, et al., No. 13-1907; Hughes v. OneWest Bank, No. A130897; OneWest Bank, FSB v. Stoner, 2011-Ohio-4672;
Henning v. OneWest Bank FSB, DC-10-16465-L; Akalarian v. Nation One Mortgage, et al., No. PC 2010-4744; Maxwell v.
OneWest Bank, No. 12-31917DM; Chapter 13, Eliazer Robles, et al. v. One West Bank, FSB, October 22, 2012; Johnson-Seck
Deposition, July 9, 2009.
5
Kate Barry, Court Lifts N.J.s Foreclosure Ban on Ally, National Mortgage News, September 19, 2011; and Appraisal Institute,
New Jersey Lifts Ban on Foreclosures by Robo-Signing Banks, September 21, 2011.
6
Ariana Eunjung Cha, OneWest Bank Employee: 'Not More Than 30 Seconds' to Sign Each Foreclosure Document,
Washington Post, September 30, 2010; Jeff Horwitz, Nevada Files First Criminal Charges in Robo-Signing Case, American
Banker, November 16, 2011; Johnson-Seck Deposition, July 9, 2009; Steve Green, Lender Processing: Faces Class Action Over
Robosigning Problems, Class Action Reporter, January 30, 2012; and James OToole, Two Indicted in Massive' Nevada Robo-
Signing Case, CNN, November 17, 2011.
7
In the Matter of One West Bank, FSB, Consent Order, Order No. WN-11-011, OTS Docket No. 18129, April 13, 2011; Holdings
Report for the Calendar Year or Quarter Ended September 30, 2011, Soros Fund Management LLC, Securities and Exchange
Commission Form 13-F, File Number 028-06420, November 14, 2011; Nathan Vardi, John Paulson and George Soros Score Big
Selling OneWest Bank For $3.4 Billion, Forbes, July 22, 2014; Dan Froomkin, Mnuchin Questions for Response, from Senate
Finance Committee, Hearing on the Nomination of Steve Mnuchin to be Secretary of the Treasury, The Intercept, January 22,
2017; and Foreclosure-Related Consent Orders Status Report: Observations, Payments, and Foreclosure Prevention
Assistance, United States Office of the Comptroller of the Currency, April 2014.
8
Mills v. U.S. Bank, et al., No. 13-1907
9
Hughes v. OneWest Bank, No. A130897
10
OneWest Bank, FSB v. Stoner, 2011-Ohio-4672
11
Henning v. OneWest Bank, FSB, DC-10-16465-L
12
Akalarian v. Nation One Mortgage, et al., No. PC 2010-4744
13
Maxwell v. OneWest Bank, No. 12-31917DM, Chapter 13
14
Eliazer Robles, et al. v. One West Bank, FSB, October 22, 2012.
15
Kate Barry, Court Lifts N.J.s Foreclosure Ban on Ally, National Mortgage News, September 19, 2011.
16
Cha, 'Not More Than 30 Seconds'.
17
Horwitz, First Criminal Charges.
18
Johnson-Seck Deposition, July 9, 2009
19
Steve Green, Lender Processing: Faces Class Action Over Robosigning Problems, Class Action Reporter, January 30, 2012.
20
Barry, Court Lifts Ban.
21
Appraisal Institute, New Jersey Lifts Ban on Foreclosures by Robo-Signing Banks, September 21, 2011
22
Cha, 'Not More Than 30 Seconds'.
23
Horwitz, First Criminal Charges.
24
Johnson-Seck Deposition, July 9, 2009
25
Steve Green, Lender Processing: Faces Class Action Over Robosigning Problems, Class Action Reporter, January 30, 2012.
26
In the Matter of One West Bank, FSB, Consent Order, Order No. WN-11-011.
27
Ibid.
28
Testimony of Morris Morgan, Deputy Comptroller for Large Bank Supervision, Before the Committee on Oversight and
Government Reform, United States House of Representatives, March 19, 2012.
29
Statement of Work: April 13, 2011, Consent Order, Foreclosure Review, Navigant Consulting, Inc. (Presented to OneWest
Bank, FSB), September 8, 2011.
30
Holdings Report, Soros Fund Management LLC; and Vardi, Paulson and Soros Score Big.
31
Froomkin, Mnuchin Questions for Response.
32
Foreclosure-Related Consent Orders Status Report.

LIES, DAMN LIES, AND MNUCHIN | ALLIED PROGRESS | 6