Press Release - Regulators Heap Praise on Mnuchin

(Washington, DC) – Regulators who oversaw Treasury Secretary-nominee Steven Mnuchin's purchase of IndyMac are heaping praise on him today:

"While some have criticized OneWest over mortgage foreclosures, those foreclosures were already underway before Mr. Mnuchin and his partners arrived to save the bank. The real story is how hard Mr. Mnuchin's team worked to find the best foreclosure avoidance solutions for the largest number of customers. After a major financial crisis, it should not be surprising that some unfortunate individuals lost jobs, suffered other tragedies, and were not able to repay their mortgages on any terms; those foreclosures are human tragedies. But the real story here is how much better OneWest was at saving homes than most banks. Government reviews show that OneWest offered more than 100,000 loan modifications to delinquent borrowers, as well as that those loan modifications included more principal forgiveness than any similarly sized bank. Importantly, when foreclosure was the only option, OneWest made mistakes far less often than others in the industry." - Walter Mix, Former Commissioner of the California Department of Financial Institutions, Letter to the Senate Finance Committee, 1/12/16

"A 2011 audit by the FDIC Office of Inspector General found that OneWest properly administered these loan-modification requirements "more than 98 percent of the time." The remaining 93% of the loans were owned by investors, tied up mostly in securitization trusts. For these, implementing similar loan-modification terms as those required by the FDIC would have required investors' consent….Ultimately, the facts around the IndyMac failure and sale are clear. IndyMac was felled by a toxic mix of bad underwriting, aggressive growth and high-cost funding, which made it a uniquely unappealing bank that was going to cost the FDIC a lot of money no matter who bought it. Simply put, it was sold to a buyer who was willing to pay more than any other after an open and fair competitive bidding process in a highly distressed market environment. This, in the end, lowered the FDIC's losses." - Jim Wigand, former deputy director of the FDIC's Division of Resolution and Receiverships and John Bovenzi, former deputy to the FDIC chairman former CEO of IndyMac during its conservatorship, Wall Street Journal, 1/18/17

"In the IndyMac transaction, to my knowledge, Mr. Mncuhin and the investors adhered to all aspects of the FDIC's requirements, persevered through months and months of anguish and negotiations, and did what even the FDIC had not expected. They invested $1.3 billion of their own cash to acquire the entire bank at the least cost to the government, earning the right to keep it open for business for the benefit of its customers, employees and new shareholders." - Thomas Vartanian, former General Counsel of the Federal Home Loan Bank Board and FSLIC, Letter to the Senate Finance Committee, 1/12/17