New research has confirmed OneWest foreclosures are concentrated in ethnic minority communities, especially Afro-Carribeans, raising concerns about fair lending. Now a statewide coalition has called for federal regulators to investigate the disproportionately high number of OneWest Bank foreclosures.
This is based on analysis on foreclosures processed since April 2009, which is when the failed IndyMac Bank was purchased by billionaire investors and renamed OneWest Bank. The analysis found that over 35,000 foreclosures were carried out for OneWest and its subsidiary, Financial Freedom in California since April 2009. When these figures were compared to US Census data, the maps showed a disproportionately high number of foreclosures in predominantly nonwhite communities. Some 68% of the foreclosures were carried out in ZIP Codes where the non-white population is at least 50% while 35% of the foreclosures were in areas where the non-white population accounts for more than three quarters of the total population.
Kevin Stein, an associate director of the California Reinvestment Coalition, said “We are calling for an investigation because this analysis raises serious red flags. We’re concerned about the extent of the harm imposed on California communities by OneWest foreclosures, and by the extent to which this harm is concentrated disproportionately in communities of color. 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 pointed out that these issues needed to be carefully investigated by the regulators particularly due to OneWest’s proposed merger with CIT Group. He is concerned about the way OneWest relates to communities of color and particularly how many foreclosures may still be yet to come. There is an estimated $1.4 billion in FDIC loss share payments that could still be paid to the bank to cover the costs of future OneWest foreclosures.
Sharon Kinlaw, an executive director of the Fair Housing Council of San Fernando Valley, said: “After foreclosing on almost 8,000 homes here in LA County, how can OneWest Bank say with a straight face that they’ve been a good community partner or that this merger is going to somehow help our communities? Foreclosing on families meant billions in profit for the billionaire owners of OneWest, but it came at the expense of families who are thrown out of their homes.”
Nelly Boets, a widowed homeowner in Anderson California currently threatened with foreclosure by Financial Freedom, a subsidiary of OneWest, said: “It’s disturbing to look at these maps and to see I’m not the only one being foreclosed on. 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’s happening to me right now.”