New questions are being raised about OneWest Bank, the Pasadena-based savings and loan that was formed by several wealthy financiers and which took over the remains of IndyMac Bank from the FDIC. OneWest has made a ton of money - more than the $1.55 billion that was invested in the place less than a year ago. It's just that the lender has been accused in lawsuits of pushing home loan borrowers into foreclosure. From the Sacramento Bee:
The allegations filed in the Eastern District of U.S. Bankruptcy Court claim that OneWest can make more money by foreclosing than by keeping borrowers in their homes. That's due to its so-called "shared-loss" agreement with the Federal Deposit Insurance Corp., at least 10 local lawsuits allege. A video made in Fairfield and circulating widely on the Internet also alleges that OneWest stands to earn millions from taxpayers by foreclosing on borrowers as a result of its shared-loss agreement with the FDIC.
The FDIC won't comment on the Sacramento lawsuits, but it said that the video was all wrong - and that OneWest must take adequate steps to modify loans. The lender has temporarily or permanently modified 25 percent of its delinquent loans. Still, the original deal with regulators has raised questions, mostly because of the billions of dollars in bad loans that the federal deposit insurance fund could be on the hook for. OneWest does have to absorb the first $2.5 billion. From the LAT:
The OneWest profit was reminiscent of those earned by aggressive investors who paid low prices for assets of numerous savings and loans that failed in the 1980s. But this time, such profit may make the FDIC a lightning rod for criticism of the government's efforts to clean up the latest debacle. "It makes you wonder whether the [FDIC] loss is due to the acquirer getting too sweet a deal," said [Bert Ely, a longtime consultant to banks].
Meanwhile, OneWest keeps investing. Over the weekend it took over the assets of La Jolla Bank and in December it bought locally based FirstFed Financial Corp.