NEW YORK (MainStreet) — In 2005, Sandy Jolley’s then 80-year-old father was allegedly sold a reverse mortgage on his $530,000 home in Southern California by OneWest Bank. A month later, Jolley’s father died, but when she tried to pay back the $80,000 loan, the bank reportedly refused to accept payment.
“My sister and I spent more than $100,000 fighting OneWest’s high priced lawyers in court,” Jolley told Mainstreet. “We are financially bankrupt and never got the inheritance our parents wanted to leave us.” That’s because Jolley says the bank auctioned off the property.
This shystery behavior characteristic of OneWest has driven Jolly to join community leaders this week in front of OneWest's headquarters in Pasadena, Calif. to protest its looming merger with CIT Group.
A Long History of Discontent
Jolley was so bamboozled by the experience with OneWest that she became a reverse mortgage suitability and abuse consultant to help others. Some 85% of the consumers that she works with have a OneWest reverse mortgage. The problem is, indeed, widespread.
“We didn’t even get the proceeds from the sale of our family home,” said Jolley, who launched a website called www.elderfinancialterrorism.com to educate unsuspecting home owners. “They auctioned the property illegally without any accountability to anyone.”
“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.
The Solution“The banks should develop a much more robust community benefit plan given the large amounts of corporate subsidy the two banks have received, including $2.3 billion in TARP money CIT Group received that it never paid back to taxpayers and the more than $1 billion that OneWest has received from the FDIC under shared loss agreements,” said Kevin Stein, associate director with the California Reinvestment Coalition (CRC).
CRC is a membership organization that promotes fair and equal access to banking and financial services for California’s low-income communities and communities of color.
“CRC believes that OneWest and CIT Group should look to the example of Banc of California that agreed to create a five year, public, community reinvestment plan,” said Stein.
OneWest has reportedly foreclosed on an estimated 35,000 California families during the past five years.
“Our coalition and the 50 other organizations opposing this mega-merger believe that the comment period should be extended and that the Federal Reserve should hold hearings about this proposed merger in Los Angeles so that the public has an opportunity to give their input on this too-big-to-fail bank merger,” Stein said.
OneWest's public relations contact David Isaacs declined to comment but said OneWest's Community Reinvestment Plan is posted on the bank's website.
—Written for MainStreet by Juliette Fairley