President-Elect Trump and the Foreclosure Crisis
President-Elect Trump’s selection of Steven Mnuchin to head the Department of Treasury has raised a troubling story about this nominee’s involvement with OneWest Bank, a national financial institution (which has since been acquired by CIT Bank). OneWest is reported to have foreclosed a 90-year-old-woman’s home for a $0.27 payment error. OneWest Bank has also been alleged to have made a mess out of reviewing borrowers for loan modifications and proceeding with foreclosure while loss mitigation options have been under review. All of these raise questions regarding President-Elect Trump and the Foreclosure Crisis, namely, how the new administration will assist struggling homeowners trying to avoid foreclosure.
The federal Home Affordable Modification Program (“HAMP”) is set to expire at the end of 2016, and the Trump Administration will need to decide whether to extend this program, or offer another federal program in its place. HAMP has done little to help the many homeowners in need of this assistance, and it will be interesting to see whether the new administration keeps the program, replaces it, or eliminates this type of assistance all together.
Another important policy matter for the Trump Administration will be whether the President-Elect keeps many of the Obama Administration’s consumer protection efforts, namely the Consumer Protection Financial Bureau (“CPFB”) and its regulations for banks and loan servicers. The CFPB has issued numerous regulations on how loan servicers are to review loan modification applications and deal with borrower’s concerns about their accounts. Regulations are issued by a president’s administration, unlike laws, which Congress must pass. Because of this, regulations are subject to change when a new president comes into office. Time will tell whether President-Elect Trump keeps in place many of these rules, or goes in a different direction than the previous administration. Stay tuned!