She supported Trump for his populist vows to “drain the swamp” in Washington of moneyed elites and Wall Street insiders who crashed the economy, so when she learned of Trump’s Cabinet pick for Treasury Secretary — Steven Mnuchin — she felt betrayed.
OneWest, a bank formerly owned by a group of investors headed by Mnuchin, had foreclosed on her Los Angeles-area home in the aftermath of the Great Recession, stripping her of the two units she rented as a primary source of income.
“I just wish that I had not voted,” said Colebrook, 59. “I have no faith in our government anymore at all. They all promise you the world at the end of a stick and take it away once they get in.”
Less than a month after his presidential win, Trump’s populist appeal has started to clash with a Cabinet of billionaires and Wall Street elites.
In addition to Mnuchin, Trump has chosen Wlibur L. Ross Jr., a billionaire investor in distressed assets as Secretary of Commerce Department and Chicago Cubs owner and billionaire Todd Ricketts as deputy commerce secretary.
‘Now backing his buddies’
Less than a month after his presidential win, Trump’s populist appeal has started to clash with a Cabinet of billionaires and millionaires that he believes can energize economic growth.
The prospect of Mnuchin leading the Treasury Department drew plaudits from many in the financial sector. A former Goldman Sachs executive who pivoted in the early 2000s to hedge fund management and movie production, he seemed an ideal emissary to Wall Street.
When asked about his credentials to be Treasury secretary, Mnuchin emphasized his time running OneWest — which not only foreclosed on Colebrook but also on thousands of others in the aftermath of the housing crisis caused by subprime mortgages.
“What I’ve really been focused on is being a regional banker for the last eight years,” Mnuchin said. “I know what it takes to make sure that we can make loans to small and midmarket companies and that’s going to be our big focus, making sure we scale back regulation so that we make sure the banks are lending.”
But the prospect of Mnuchin leading the Treasury Department prompted Colebrook and other OneWest borrowers who say they unfairly faced foreclosure to contact The Associated Press. Colebrook wishes she could meet with Trump to explain why she feels betrayed by his Cabinet selection after believing that his presidency could restore the balance of power to everyday people.
“He doesn’t want the truth,” she said. “He’s now backing his buddies.”
The Trump transition team has been sensitive to preserving trust with its voters. Senior adviser Kellyanne Conway publicly warned that supporters would feel “betrayed” if former critic Mitt Romney was named secretary of state, for instance.
Wealth from Great Recession foreclosures
For Mnuchin, the fundamental problem stems from the Great Recession. His investor group was the sole bidder to take control of the troubled bank IndyMac in 2009. The group struck a deal that left the Federal Deposit Insurance Corporation responsible for taking as much as 80 percent of the losses on former IndyMac assets and rebranded the troubled bank as OneWest.
The combination of OneWest’s profitability, government guarantees and foreclosure activities drew the ire of activist groups like the California Reinvestment Coalition. It found the bank to be consistently one of the most difficult to work out loan modifications with even though OneWest never drew a major response from government regulators.
By June of 2014, five years after taking over OneWest, Mnuchin sold the bank for $3.4 billion at a tremendous profit.
Colebrook said she learned the hard way about OneWest’s tactics, after the regional bank acquired her home lender, First Federal Bank of California, in late 2009.