Donald Trump wasn’t the only person to see opportunity in the 2008 housing collapse. As the economy recovered from the rubble of failed banks, foreclosed homes and government bailouts, Steven Mnuchin emerged a winner.
That success is coming back to haunt the hedge fund manager and Hollywood producer who is Trump’s choice for Treasury secretary. OneWest, a bank Mnuchin and his partners established during the collapse, has taken steady fire from regulators and consumer advocates for myriad failures ever since.
In Florida, the company foreclosed on a 90-year-old woman after a 27-cent payment error. New York Gov. Andrew Cuomo singled out the lender for squeezing Superstorm Sandy victims. Last month, the company’s successor, CIT Bank, was accused of discriminating against minority borrowers.
“We’re just coming out of a foreclosure crisis and a serious economic downturn. It’s not the time to appoint someone who sided with corporate America over real people,” said Alys Cohen, an attorney with the National Consumer Law Center. “Mr. Mnuchin comes from Wall Street and has served monied interests over homeowners.”
Ultimately, Mnuchin’s story, like the housing collapse, doesn’t fit into a simple narrative. While earning the ire of consumer advocates, Mnuchin also brings an understanding of the global mortgage market that Trump will need to complete the unfinished business of the housing recovery. Inside the Beltway, some are cheering his appointment.
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