Los Angeles Community Leaders Speak Out Against OneWest Bank Merger

The testimony of  Renee M. G. Chavez, Operations Manager of Montebello Housing Development Corporation (MHDC), about the proposed OneWest and CIT Group merger, is featured in its entirety below.

If you were unable to attend the hearing, CRC live-blogged it here and you may also find our CIT Group/OneWest Merger resource page help.  It outlines why 21,000 people are opposing this merger along with 100 California and national organizations. Pictures of the rally against the merger are available here.

Testimony of Renee Chavez

Thank you for taking the time to take our responses.  I hope that you are serious and committed to doing what is right and that we are all not wasting our time today.

My name is Renee M. G. Chavez, I am the Operations Manager of Montebello Housing Development Corporation (MHDC) a 501 (c)(3) non-profit community based housing agency with offices in Montebello, CA that serves low to moderate income families in Los Angeles and San Bernardino Counties via education and counseling.  MHDC was established in 1992 to meet the affordable housing needs of Los Angeles County residents.  MHDC’s mission to educate and assist in the delivery of safe, sanitary, quality and affordable housing to individuals and families of modest financial means has been the driving force of the organization.  We believe in creating financial wealth through home ownership.

All who have responded today and you are aware that Indy Mac was one of the subprime lenders whose bad lending practices preyed on our communities of color and seniors.

During the foreclosure crisis families lost homes and their wealth because of the lack of assistance to modify underwater homeowners. Because of the loss of assets and wealth, communities of color are now struggling to rebuild.  The dream of homeownership was stolen from many families.

The OneWest investors received not only a bargain basement price to purchase Indymac, they also obtained a favorable loss share agreement with the FDIC that provided for the FDIC to cover a significant amount of the losses on loans made by Indymac.

In other words, OneWest investors paid little for a bank that came with limited risks to the investors while forever impacting communities.

15% of OneWest’s branches are located in low and moderate-income census tracts, as compared to a statewide average of 30% of bank branches being located in LMI tracts.  35,000 Californians have lost their homes due to foreclosures by OneWest and its subsidiary, Financial Freedom

All in this room and you know that CIT Group received $2.3 billion from the US taxpayers, via TARP Troubled Asset Recovery Program.  A little while later, CIT Group filed bankruptcy, and eliminated its obligation to repay the government.

How many homeowners might have been able to keep their homes if that money had gone to modifications instead?

Remember those who are still suffering.  In 2014 in LA County there were 21,538 families that faced foreclosure.  In January there were 1631 notice of defaults.  Remember, these people paid the taxes that bailed out CIT.

We hope that the Federal Reserve and the Office of the Comptroller of the Currency is serious about their consideration of another Too Big to Fail Bank.  Our communities have already paid too high a price while both banks were separate entities.  Stop this insult to the taxpayers, that include those people who lost their homes, by rejecting the merger.

Too Big to Fail is too big to approve.

However, since this merger will probably go through it is imperative that protections for our communities be put in place prior to the approval.  These protections should include, at a minimum:

  • Prior to approval, CIT Group and OneWest Banks should be required to make strong public community reinvestment commitment based on the new size of their bank with benchmarks clearly established. These CRA commitments need to made public with input with a cross section of those agencies testifying today.  MHDC, with these other agencies, are interested in safeguarding our communities.  The CIT Group and OneWest Banks are interested in their investors.  Together, there would be a compromise on CRA requirements that could be fair.
  • As both banks have demonstrated that they cannot be trusted to work in good faith, when merged should they be in violation they should be fined $2.3 billion. Those funds could be used to assist communities in low and moderate-income census tracts that continue to be severely underserved.
  • Should the banks be allowed to merge, they should not receive any loss share agreement with the FDIC.
  • If merged, the banks should not be able to participate in any bailout should their business practices, that include obscene salaries to only a few, prove them unfit to continue. The bank should be allowed to fail.  As you know, businesses fail every day.

Thank again for taking time to hear our comments.  I look forward to your response and participating in future discussions to put accountability back into the banking industry.

Inside One Family’s Financial Freedom Reverse Mortgage Nightmare

The testimony of Julie Cheney, a surviving family member of a OneWest reverse mortgage borrower, about the proposed OneWest and CIT Group merger, is featured in its entirety below. If you were unable to attend the hearing, CRC live-blogged it here and you may also find our CIT Group/OneWest Merger resource page helpful as well. Pictures of the rally against the merger are available here.




My name is Julie Cheney, I live in Simi Valley California and I am a computer programmer.

Thank you for the opportunity to testify today.  My testimony is in opposition to the proposed merger of OneWest Bank (OWB) and CIT Financial.

I was a Successor Trustee of my parents Trust when they were sold a Financial Freedom reverse mortgage they didn’t need, while my dad was in the last month of his life, with terminal cancer, on narcotic pain medication, and my mother had Alzheimer’s disease and could not complete a sentence.

A month after dad’s death we found the Financial Freedom loan docs and learned my parents received a lump sum of $80,000 that sat untouched in their bank account.

The nightmare began when we tried to give the money back to OneWest Bank 3 times over the course of a year after dad’s death.  OWB refused each time.

OneWest Bank knowingly and wrongfully foreclosed on our property 3 times.

The 1st Notice of Default (NOD) in 2010 falsely claimed mom didn’t occupy the property as her primary residence when OneWest Bank had verified evidence she did.  This NOD was rescinded with HUD intervention.

The 2nd NOD in 2012 cited the same 2010 occupancy default letter.

On the 2nd defective NOD we appealed to the court for an injunction and OneWest Bank voluntarily agreed to rescind the 2nd NOD.

The day the 2nd NOD was rescinded a third NOD was recorded concurrently.  OneWest Bank cut off all communication with us.

Finally, we received a letter from Gail Balettie Sr. VP of Reverser Mortgage Operations acknowledging our intention to retain the property but demanding certified funds within the 2 business days before the scheduled auction.  The payoff included an unverified loan balance, unauthorized legal fees and other foreclosure related fees for OWB’s 3 wrongful foreclosures.

Our property was wrongfully auctioned by OneWest Bank April 2, 2013

Over 8 years from 2005 to 2013 OneWest Bank:

Recorded false documents with the county recorder

Refused to accept annual occupancy certificates because they were not “certified” by a notary

Violated our HUD rights & all attempts to retain the property

Failed to provide a Single point of contact

Inflated an appraisal in order to prevent us from exercising the 95% option

Charged unauthorized legal, service and foreclosure related fees to the loan payoff

Wrongfully auctioned our property

All violations of federal regulations, consumer rights and protections were knowingly directed from the Senior Vice President level or higher.


Sandy Jolley Testimony on Abuses by Financial Freedom Reverse Mortgage Servicer, Owned by OneWest Bank

The testimony of Sandy Jolley, a reverse mortgage suitability and abuse consultant, about the proposed OneWest and CIT Group merger is featured in its entirety below. If you were unable to attend the hearing, CRC live-blogged it here and you may also find our CIT Group/OneWest Merger resource page helpful as well. Pictures are available here.



My name is Sandy Jolley.  I am a Reverse Mortgage Suitability and Abuse Consultant and Certified HUD Counselor. 

Reverse Mortgage servicing provides billions of dollars in revenue to OneWest Bank (OWB).  Of the 6 major loan servicers OWB holds position 1 through 5 as the worst servicer by far.

My testimony illustrates OneWest Bank’s consistent and deliberate failure to comply with Federal Regulations, State Laws, and Consumer Protections in the servicing and foreclosure practices of Reverse Mortgages.

Repayment and Single Point of Contact

The most common maturity event is the death of the borrower. The family is grieving when they get a repayment letter that is confusing, contradictory, deceptive, and frankly no consumer could understand what this letter says.

The repayment letter makes it critical to have a Single Point of Contact and Customer Support Staff trained in:

a) the regulatory requirements,

b) the maturity/foreclosure process,

c) to provide guidance, and

d) to help the consumer understand and exercise their rights and options.

All OWB documentation states a Single Point of Contact (SPOC) will guide the consumer through the process, yet as you will hear today, that is not happening.

In addition, the “customer support” representatives at Financial Freedom also:

  • Obstruct consumer efforts to repay the loan balance or the 95% option;
  • Refuse to grant HUD authorized time extensions;

Financial Freedom also:

  • Makes a legal determination on the validity of consumer documents
  • Refuse to speak to heirs without proof of legal authority.
  • Require the consumer to record their Trust – a violation of consumer privacy rights, state laws and federal regulations.

Accelerates foreclosure and auction

  • Initiate foreclosure as soon as 60 to 90 days after the death of the borrower:
  • Use State laws to violate HUD regulations to accelerate foreclosure.
  • Auction property when consumer has provided proof funding or contract for sale.
  • Charge unauthorized legal and foreclosure related fees caused by acceleration of foreclosure;
  • Claim Non-borrowing spouses have fewer rights than other heirs.


The non-borrowing spouse issue is a mess and not because of the consumer.

We have all heard the commercials “A reverse mortgage is a safe government insured loan used to supplement retirement and allows seniors to stay in their homes until they die”.

No couple thinks on their own “let’s get a reverse mortgage and take one of us off title so when the other dies the survivor can be evicted.” 

This is a problem caused by HUD, by the Lender at origination and made worse by the OWB practice of accelerating foreclosure.  ML 2015-03 excludes virtually all surviving spouses from relief as evidenced by Secretary Castro’s letter in my supplemental documentation.

I urge regulators, HUD and OWB to come together in a responsible way.

Put a moratorium on foreclosures for Non-Borrowing Spouses until HUD has a policy that is a clear solution for Surviving Spouses. 

  1. I urge regulators to deny the application of OWB and Cit Financial.
  2. Investigate, audit, and review individual OWB Reverse Mortgage Loan Files:
    • for the servicing and foreclosure deficiencies I have put forward
    • to ensure compliance with existing laws and regulations and especially consumer rights.

The supplemental documentation submitted with my testimony supports the facts of my testimony.

Pictures from OneWest and CIT Group Rally in Los Angeles February 26, 2015

Yesterday, LA community leaders, affected homeowners, and reinvestment advocates spoke at a public hearing about the proposed merger of CIT Group and OneWest Bank.  The California Reinvestment Coalition, along with about 100 California and national organizations, as well as over 21,000 individuals who signed Daily Kos and National People’s Action petitions, are all opposing the merger.  To learn more about why these groups are opposing the merger, please visit the OneWest CIT Merger Resource page. 

To view a summary of the day, click here: Impacted Homeowners, LA Community Leaders Speak out

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New Presentation Explains Why Organizations and People Across the US Oppose the OneWest and CIT Group Merger

If you’re wondering why people are opposed the the merger of CIT Group and OneWest Bank, watch this short Prezi!

It outlines the many problems with this proposed merger.  If, after viewing it, you’d like to weigh in with regulators, please visit CRC’s Resource page to get the two email addresses for the regulators who are reviewing this proposed merger.

CIT Merger Presentation

View the presentation by clicking on the picture above, or by clicking here: CIT Group and OneWest Proposed Merger: What You Need To Know.


The CIT Group and OneWest Bank Merger: What You Need To Know About This TBTF Merger

TARP bailout Checks

Have you heard about the Too Big To Fail bank merger that’s being proposed in California?  Our media guide below highlights the many, many troubling aspects of this proposed merger and why the Federal Reserve should hold public hearings on this merger.  If you’re interested in learning more, and sending an email to regulators about this merger, please visit CRC’s OneWest/CIT Group merger resource center.

UPDATE: Over 10,000 people have already signed a new petition to the Federal Reserve about this proposed merger- take a look: Stop the merger of banks that will be Too Big to Fail

What’s being said and written about this proposed merger?

“I have never heard anything like this,” said Bert Ely, an independent banking consultant. “It strikes me as unusual and kind of overkill, unless possibly there is a problem that hasn’t surfaced publicly yet that they are trying to mitigate or minimize.”  Bloomberg: OneWest Seeks Wall Street’s Help Lobbying Yellen on CIT

The windfalls that will accrue to Paulson, Soros, Mnuchin, and others will increase their personal values on Forbes’ charts of millionaires and billionaires and likely be seen in their charitable and philanthropic giving. Just realize, however, how much of that philanthropy, even when devoted to anti-poverty work as Soros and Paulson might do, is both directly and indirectly subsidized by the American taxpayer.  NonProfit Quarterly: Taxpayers Subsidize Top Philanthropists through OneWest Bank Deal

“They consistently refuse to allow consumers to repay a reverse mortgage loan, they accelerate foreclosure and auction the property illegally, and no matter what they sell the property for, OneWest, under its subsidiary Financial Freedom, will make a claim to the FHA insurance fund to get reimbursement for the balance of the loan, closure-related fees and other legal fees,” Jolley said.   Mainstreet: Protestors Oppose Too Big To Fail Bank Merger of OneWest and CIT Group in California

“This is an embarrassing amount of subsidy for the FDIC to give to the billionaire owners of this bank, especially when the bank leadership refuses to create a strong community reinvestment plan,” said Kevin Stein, the coalition’s associate director, in a statement.  Los Angeles Business JournalOneWest Expected to Receive Over $2.4 Billion From FDIC

“I work with hundreds of consumers who share a common experience with OneWest Bank — a deliberate failure to comply with consumer protection laws and regulations or provide any level of customer support,” said Sandy Jolley, a reverse mortgage suitability and abuse consultant and a certified HUD reverse mortgage counselor.  Pasadena Star-News: Protesters gather to oppose OneWest merger with CIT Group

Under that deal, the FDIC agreed to share the losses from bad IndyMac loans, paying more than $2.4 billion over time. So far, the regulator has paid more than $1 billion in loss-sharing payments to OneWest, the coalition said, and the terms allow continued payments to a buyer like CIT.  Los Angeles Times: Advocacy group protests CIT Group deal for OneWest Bank

“Reverse mortgages are a bet by the mortgage company that they’re going to make money …and someone’s going to die early,” Smith told the I-Team, adding, “In this case, Myrtle Lewis won the bet, and the mortgage company wants to welch.”  CBS DFW: 103-Year-Old North Texas Woman Fights To Keep Her House

For every homeowner who has their story covered, there are countless others whose stories won’t be told, especially in the reverse mortgage context wherein a grieving spouse may not think to call their local media as their bank tries to take their home from them. That’s where bank regulators should play an important role in ferreting out bad behavior and holding them accountable.  HousingWire CRC Op-Ed: This is why reverse mortgage servicers need a foreclosure moratoria

If approved by bank regulators, this would be the first time a Systemically Important Financial Institution (SIFI) was created through a merger. The SIFI designation is given to banks that are so large that their collapse could trigger problems throughout the entire financial system. California Progress Report CRC Op-Ed: Can We Have Bank and Regulator Hearings in California Too?

The $2.3 billion that CIT Group received from the U.S. Treasury’s Troubled Asset Relief Program, which remains unpaid due to CIT’s subsequent bankruptcy filing, serves as an all-too-relevant reminder to regulators about the dangers in subsidizing banks without proper oversight. Before regulators give the green light to this merger, public hearings need to be held that thoroughly consider the risks posed by the creation of a SIFI bank that is still dependent on a subsidy from the FDIC.  American Banker BankThink Blog CRC Op-Ed: Is the FDIC Subsidizing a ‘Too Big to Fail’ Merger?

Would you be shocked to learn that regulators may well approve creation of a new “too big to fail” bank from the ashes of one of the very institutions that crashed our economy? HuffingtonPost Greenining Institute Op-Ed: A New ‘Too Big to Fail’ Bank for the 1 Percent

CRC Opposition to CIT Bank and One West Bank (OWB) Merger (Radio Show)

“We have worked with a homeowner who was ‘dual tracked’ by OneWest,” wrote James F. Zahradka II, the foundation’s supervising attorney. “The client had submitted an application for a loan modification and submitted all of the required documents. Nevertheless, OneWest continued to pursue foreclosure to the point of selling the home at a trustee sale. OneWest only rescinded the sale after we complained to OCC on the borrower’s behalf.”  Pasadena Star-News Groups oppose CIT’s planned acquisition of OneWest Bank

Activists’ Protests On the Money (subscription to LABJ required)

At a hearing on Bank of America Corp.’s 2008 takeover of troubled lender Countrywide, Stein warned that the merger would “not only impact working families and neighborhoods, but also the strength of the national economy.” The Fed approved the merger; BofA has since suffered about $60 billion in losses, most of it from Countrywide loans and securities.  Los Angeles Times: Groups urge U.S. to reject CIT takeover of OneWest Bank

The bankruptcy wiped out preferred stock from the TARP deal, and CIT never repaid the government. But it emerged from bankruptcy with a new CEO, John Thain, the notorious former head of Merrill Lynch who was ousted during the crisis for, among other things, a million-dollar re-decoration of his office, complete with a $35,000 commode.  The Fiscal Times: Are Regulators About to Let Another Bank Get Too Big to Fail?

Ironically, many of the banks deemed “too big to fail” ended up failing low-income communities and communities of color throughout the United States as they made shoddy mortgages, robo-signed documents, and later foreclosed on millions. Some of these same communities are now asking if this merger between OneWest Bank and CIT Group would result in any public benefit and are asking how further harms by a “too big to fail” bank will be prevented. Los Angeles Daily News Op Ed by CRC and Greenlining Institute: Shouldn’t communities be considered ‘too big to fail’? Guest commentary

How Much Corporate Welfare Have CIT Group and OneWest Bank Received?



As part of a five-day public awareness campaign, Californians are asking bank regulators, including the FDIC, the Federal Reserve Bank of New York, the Federal Reserve, the Office of the Comptroller of the Currency, and the Consumer Financial Protection Bureau, questions about the possible negative impacts of a Too Big To Fail Bank merger that would combine CIT Group and OneWest Bank.

CIT Group Corporate WelfareThe questions on the fourth day focus on the subsidies both banks have already received from taxpayers in the form of TARP money and tax breaks the newly merged bank plans to use after the merger. These subsidies are in addition to the ongoing support OneWest investors are probably still receiving under the FDIC’s shared loss agreements.  In response, community groups are asking how much government welfare one bank can receive.

CIT Group unpaid TARP $2.3 billionDespite these government handouts, the bank plans big payouts to investors, executives, and shareholders, while only offering a meager community benefit and reinvestment plan as part of the merger, and zero plans to repay the $2.3 billion it received from taxpayers under TARP. Ironially, the LA Times reports that OneWest bank has paid out $2.3 billion in dividends as of June 30- the exact same amount of money that CIT Group never repaid to the US Government.

“Once again, we see there are two sets of rules for Wall Street and Main Street,” commented California Reinvestment Coalition Executive Director Paulina Gonzalez. “Bank CEOs and investors will potentially ‘earn’ millions from this merger, despite no clear community benefits from the merger, and despite the fact this merger dramatically increases risks for the US financial system. Americans who are working two or three jobs to keep their head above water will have a hard time understanding how bank regulators would approve a merger that includes a plan for exorbitant executive salaries and planned corporate tax breaks and no guarantees of a clear public benefit.”

Leadership of CIT Group and OneWest Bank refused to tell CRC members how much money they have received from the FDIC (via the Shared Loss agreement), so CRC submitted a FOIA request to the FDIC. Thus far, the FDIC has denied CRC’s FOIA fee waiver request, informing CRC that “The subject matter of your request is not now of interest to the general public.”

FOIA fee waiver denial for OneWest BankThis shocking response from the FDIC flies in the face of intense public interest in the recent This American Life/Propublica story about bank regulators coddling Goldman Sachs and the considerable interest generated by the recent AIG trial about the government bailout of AIG.

Kevin Stein, associate director at the California Reinvestment Coalition, comments: “CIT wants regulatory approval to buy OneWest, which will bring expected corporate profits, billions for investors, and millions for bank executives. It also wants: to not to have to pay back $2.3 billion in TARP money it received from the US Government; to take advantage of merger’s expected profits and use tax gimmicks to lower its IRS bill; to have the FDIC agree to cover certain future losses; and to not offer a meaningful plan to serve and reinvest in the community. Has a merger ever had so much public subsidy, so much private gain, and so little public and community benefit?”

Under the merger application, the CEO of the newly merged bank will receive a $4.5 million annual salary plus over $12 million in stock options, for a potential total of $26 million over the course of three years. Meanwhile, the chair of the merged institution may earn $4.5 million annually working for the bank, though his offer letter allows him to retain his other job of running a private equity fund at the same time.

CRC’s questions for regulators include:

1) Is there a contradiction between a bank arguing that its strong enough to become the first SIFI created, while at the same time holding out its hand for subsidies from the FDIC via the Shared Loss Agreement?

2) Are regulators concerned about the outsized compensation for bank executives under this merger, especially in light of the miserly goals the bank’s leadership has created in regards to community reinvestment activities?

Today is the fourth of five days of questions for regulators about this merger, to review previous questions for regulators, visit these links:

Day 1: Bank Merger Would Benefit Investors, But What About Communities?

Day 2: Advocates Question If FDIC Loss-Share Agreements Should Continue As Part of Bank Merger

Day 3: Community Groups Question OneWest’s Foreclosure Record

Tomorrow’s release will focus on Community Benefit and Reinvestment Plans and how CIT Group and OneWest can improve their current plan.

CRC’s detailed letter to the Federal Reserve Bank of New York includes an analysis of the merger and a long list of concerns and unanswered questions about the proposed merger.