On June 9th, 2015, a coalition across the state of California demanded that federal regulators launch an investigation in order to get to the bottom of the extremely and disproportionately high amount of foreclosures made by OneWest Bank among communities of color across California. The analysis of this data was based on processed foreclosures from 2009 to present when the IndyMac Bank was bailed out by billionaire investors and renamed to OneWest Bank. OneWest and its subsidiary, Financial Freedom, has conducted more than 35,000 foreclosures in California since April 2009.
These statistics were compared to United States Census data, and the maps that were put together as a result of this revealed a high number of foreclosures in mostly non-whit communities. In fact, Sixty eight percent of the foreclosures made were in zip codes where the population of non-white residents is more than fifty percent. Thirty five percent of these foreclosures took place in zip codes where the non-white population is over seventy five percent of the total population.
Kevin Stein, who is the associate director of the California Reinvestment Coalition discussed his views on this data in a statement. He stated that the coalition wants an investigation, due to the obvious and serious red flags raised by the analysis. “We’re concerned about the extent of the harm imposed on California communities by OneWest foreclosures, and but the extent to which this harm is concentrated disproportionately in communities of color,” said Stein. “OneWest’s mortgage servicing has been widely criticized and these data increase our concerns that bad servicing practices may have had an outsized impact on communities of color.”
Stein goes on to say that it is necessary that these issues be investigated by government regulators, especially after OneWest has proposed a merger with CIT Group. “Is foreclosure the main way in which OneWest relates to communities of color?” asks Stein. “And how many more OneWest foreclosures will we see, knowing that an estimated 1.4 billion dollars in FDIC loss share payments may still be paid to the bank to cover the costs of future OneWest foreclosures?”
One of the victims of this apparent focus on non-white communities for foreclosure, Nelly Boets, had something to say about her position. Boets is a widowed homeowner living in Anderson, California, and she is facing foreclosure at the hands of Financial Freedom, a subsidiary of OneWest. Upon having the maps revealed to her, she stated that it was disturbing to look at them and see that this was not just a singular incidence but an epidemic, or more appropriately, a scourge. “The possibility of losing my home if my husband passed away was never part of the conversation when we got a reverse mortgage, yet that’s what happening to me right now,” said Boets.
The executive director of the Fair Housing Council of San Fernando Valley, Sharon Kinlaw, commented, attacking the idea that OneWest Bank maintains that its prospective merger will help communities, rather than help them. She states that after the bank has foreclosed on more than 8,000 homes in the LA County, it is impossible for them to say that they have been a good element in the community or that they will help communities in the future. “Foreclosing on families meant billions in profits for the billionaire owners of OneWest,” asserted Kinlaw. “But, it came at the expense of families who were thrown out of their homes.”
These concerns about the amount of foreclosures that OneWest Bank makes in communities of color are not the only ones that have been raised against them. It has also been pointed out that the bank has a problematic record of mortgage lending to Asian American Pacific Islanders and African Americans. They also have failed to allocate enough branches in low income communities, with only 15% of its branches being located in low and moderate income communities, half of the average in the industry. Finally, as was illustrated by Mrs. Boets’ predicament, the bank has a history of processing foreclosures on widows, with Financial Freedom moving extremely quickly to foreclose on surviving heirs after a borrower’s death.
