Legislators are concerned about OneWest Bank

Two legislators from Southland, Rep Adam Schiff (Democrat/Pasadena) and Rep. Linda Sanchez (Democrat/Pasadena) are concerned over alleged activities of OneWest Bank. It is being said that the bank is methodically pushing the homeowners into foreclosure.

These claims have been made in many legal suits and if it is true then it is not good news for those who are desperately trying to continue to stay in their homes. Schiff said, “I personally don’t know what the evidence is, but I’d be shocked if that was going on. I don’t know how banks can unilaterally raise mortgage rates when a bankruptcy is going on.”

Sanchez too expressed her concerns and said, “I’m concerned about recent allegation that banks in Southern California may be victimizing homeowners. With the current economy, banks – especially those that received bailout funds – should be working with borrowers rather than pushing them into foreclosure.”

Lawyer Peter Macaluso of Sacramento and lawyer Mark Wolff of Elk Grove have currently filed many legal suits representing battling borrowers trying to ward off foreclosure. All their mortgages are in the hands of OneWest. The accusation is that the bank, as a matter of routine performs escrow analysis immediately following the filing of bankruptcy by a borrower. Based on that analysis the monthly payment of the homeowner on the mortgage is pushed up – sometimes beyond reasonable limits.

Macluso had said earlier, “They changed the mortgage payment for one of my clients eight times in eight months.” The wayward increases are making it impossible for the already troubled borrowers to be current on their repayment schedule. Thus they are pushed into foreclosure. Macaluso argues that the bank is intentionally following this line because this way it can rake in more profits rather than by allowing the borrowers to continue to stay in their homes.

OneWest took over the assets of IndyMac. The latter was taken over by Federal Deposit Insurance Corp in 2009 March. The newly named OneWest entered into an agreement with FDIC based on shared-loss. As per the agreement OneWest was to take on the first $2.5 billion of losses in loans. But after reaching the threshold FDIC would pay 80% of the losses that would follow.

Schiff said he has been working with those in his 29th Congressional district who are troubled with mortgage dues. He too said that the banks are not being cooperative. He said, “Very few people are getting help with their mortgage loans. The federal programs are all voluntary, so you don’t see many banks doing it. There are incentives for banks to refinance, but I’m sure they pencil it all out to see where they can get their best return. And unfortunately … that’s not always keeping someone in their home.”

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