YouTube Rant on OneWest 'Deal' Persists Despite FDIC Rebuke

FDICA rare rebuke from the Federal Deposit Insurance Corp. has only emboldened the makers of an accusatory YouTube video against the agency, despite the vehement denial by the FDIC of any “sweetheart deal” in the sale of seized assets of IndyMac to a group of prominent investors.
More YouTube videos by other real estate industry-related bloggers have surfaced reciting the same storyline in the deal between the FDIC and OneWest Bank – formerly IndyMac.
The central accusation that drew the unusual FDIC response:  The federal agency’s so-called “loss-sharing agreement” with OneWest makes it a much more profitable incentive for the bank to move forward with short sales or foreclosures — instead of working with homeowners on mortgage modifications.
Pasadena, Calif.-based IndyMac, one of FDIC’s biggest bank failures, became OneWest after the sale of its assets by the FDIC in March 2009 to a consortium of investors led by Steven T. Mnuchin for $13.9 billion. Mnuchin is a former Goldman Sachs executive, and other members of the consortium included firms with ties to the Wall Street investment banking giant that took a government bailout at the height of the financial crisis.
The YouTube video – now longer at seven minutes in response to the FDIC statement – implies favoritism in the Goldman Sachs connection, but it focuses on the loss-sharing agreement between the FDIC and OneWest.
The video is produced by Think Big Work Small, a Fairfield, Calif. provider of video marketing and mortgage news for real estate entrepreneurs.
The two hosts of the video carefully outline what they call an actual case in which OneWest acquired an IndyMac mortgage valued at $485,200 for $334,600, or at nearly 70 percent of its value. Then, after moving forward with a short sale, the bank pocketed a little more than $100,000 in profit, they said.
It did so because the government covered 80 percent of the “loss” – the difference between the original loan’s value and the short sale price, the video by Think Big Work Small claims.
“It is unfortunate but necessary to respond to blatantly false claims in a web video that is being circulated about the loss-sharing agreement between the FDIC and OneWest Bank,” said FDIC Director of Public Affairs Andrew Gray in the statement posted on the agency’s website.
The facts are the following, Gray said: “OneWest has not been paid one penny by the FDIC in loss-share claims. The loss-share agreement is limited to 7 percent of the total assets that OneWest services, and OneWest must first take more than $2.5 billion in losses before it can make a loss-share claim on owned assets.”
The statement drew an extended video from Think Big Work Small with a new ending that it posted last night.
“So Maybe the reason why so many people are having trouble getting loan modifications from OneWest is that they’re working to hit that magical $2.5 billion loss mark…If you think about it, this makes even more sense now,” said one of the video’s hosts.
But the FDIC said in its statement that OneWest must meet its requirements to assist distressed homeowners with mortgage relief trials and permanent modifications under the government’s Home Affordable Modification Program (HAMP). “In order to be paid through loss share, OneWest must have adhered to …(HAMP),” the FDIC said.
The FDIC also defended itself from another allegation in the video – that the agency needs to “start borrowing money” from the U.S. Treasury.
“The producers of this video perpetuate other falsehoods,” the agency said. “The FDIC has not requested to borrow money from the Treasury Department. Indeed, we continue to be funded by the banking industry through assessments, not by taxpayers as claimed in the video. This video has no credibility. Regardless of the personal or professional motivations behind its production, there is always a responsibility to be factually correct and transparent.”

One thought on “YouTube Rant on OneWest 'Deal' Persists Despite FDIC Rebuke

  • February 17, 2010 at 11:01 am

    My name is Bob Hertzog, and I wrote a blog in September/2009 titled, “Is The FDIC Killing OneWest IndyMac Short Sales”. The numbers (and to story, to some extent) in the video were taken directly from my blog. This was an actual case that happened to one of my clients, and the numbers are real. The FDIC press release sounds like a ticked-off 7th grader, and doesn’t address much of what was in the video. The fact that they even chose to respond to a YouTube video has to make you wonder if there is more to this than what meets the eye. Methinks so….

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