Cesar Sayoc’s Home Was Foreclosed on by Steve Mnuchin’s Bank, Using Dodgy Paperwork
October 26 2018, 6:07 p.m.
Cesar Sayoc, the Donald Trump-loving Floridian who was taken into custody in relation to pipe bombs mailed to prominent Democrats, was foreclosed on in 2009 by a bank whose principal owner and chair is now Trump’s treasury secretary, Steven Mnuchin.
The documents used to enact the foreclosure were signed by a prominent robo-signer and seemingly backdated. Nonetheless, the evidence was good enough for the famously inattentive Florida foreclosure courts to wave the case through. Years later, Sayoc became a supporter of Trump, who came into office and appointed a treasury secretary who ran the bank that snatched Sayoc’s house.
The Intercept obtained the records by searching Broward County foreclosure documents, which are all public.
It’s a bizarre twist to a story that has captured America’s attention this week. Thirteen pipe bombs were sent by mail to high-profile Trump critics: former President Barack Obama, former Vice President Joe Biden, Bill and Hillary Clinton, Sens. Cory Booker and Kamala Harris, Rep. Maxine Waters, former Attorney General Eric Holder, actor Robert DeNiro, financier and Democratic donor George Soros, among others. None of the bombs exploded.
In yet another irony, Soros was one of the investors in the bank that executed the foreclosure on Sayoc’s home.
Details quickly emerged about Sayoc and his apparent devotion to Trump. He drove a van covered in pro-Trump messages. He apparently hadn’t registered to vote until March 2016, pulled off the sidelines by Trump’s messaging. He was a “celebrity” at “Make American Great Again” rallies and protests in South Florida.
Earlier in his life, Sayoc went through a difficult period, and the experience intersects with people allied with his political idol — and some on the other side as well.
By early 2009, foreclosures had soared across the country to record highs, particularly in Florida, one of the hardest-hit areas. Millions of subprime mortgages would go sour as the housing bubble collapsed. Sayoc was living in Fort Lauderdale, in a house purchased in 2006. He refinanced in April 2007, getting an adjustable-rate mortgage from IndyMac Bank for $385,500.
Through the often operatic system of mortgage transfers at the time, the mortgage holder for Sayoc’s loan ended up as MERS, a shell company that housed an electronic spreadsheet in which mortgages could be quickly traded between buyers. By making the owner MERS, IndyMac could trade the mortgage with other institutions without having to file additional documentation.
Not even two years after the mortgage sale, on January 7, 2009, IndyMac Bank filed for foreclosure. The docket in the case indicates that Sayoc did not receive notice of this lawsuit; the summons was returned unserved in February.
The legal representation for IndyMac was the Law Offices of David J. Stern, a notorious foreclosure mill that prosecuted about one-fifth of all foreclosures in the state at the height of its powers, many of them in slipshod ways and with fraudulent documents. They often served “notice by publication,” placing the foreclosure notice in a local paper called the Daily Business Review.
In order to foreclose, IndyMac needed to assign the mortgage back from MERS to IndyMac, making them the mortgage holder and therefore eligible to enforce the lien. This appears to have been done after the fact. The documents state that the assignment was executed on January 5, 2009, but elsewhere in the document, the date is listed as January 23. And the document was not filed with the county clerk’s office until April 23.
This wasn’t abnormal in the slapdash world of foreclosures at the time. But in real terms, it would mean that, at the time that IndyMac filed notice for foreclosure on Sayoc, they hadn’t completed the paperwork proving that it owned the mortgage in question. Backdating documents, in fact, was a specialty of the Stern law firm. It allowed them to quickly process the thousands of foreclosure cases they managed, and it was quite lucrative for David J. Stern, who lived in a $15 million mansion and owned a 130-foot yacht called Misunderstood.
The assignment was signed by Erica Johnson-Seck, who, just six months later, would admit in a court deposition that she “robo-signed” 750 foreclosure-related papers per week, spending just 30 seconds on each document. She acknowledged that she did not read the documents before she signed them nor did she learn who inputted the information on them. And she admitted to not signing in the presence of a notary, undermining the purpose of notarization.
Other judges threw out cases where Johnson-Seck was involved. But Sayoc’s case wasn’t met with much resistance. According to the docket, Circuit Court Judge Robert Fogan ruled for summary judgment for IndyMac on September 2, 2009. In November, the house was bid upon and sold.
IndyMac was a failed bank under federal receivership at the time it initiated the foreclosure on Sayoc. By March 2009, it would fall into the hands of a consortium led by Mnuchin. He renamed it OneWest Bank. As part of a standard deal during the financial crisis, the Federal Deposit Insurance Corporation backstopped losses on loan defaults, limiting the downside risk of foreclosures.
Mnuchin turned a big profit on OneWest, and along the way, numerous homeowners accused him of running a foreclosure machine. The bank did agree to a 2011 consent order stipulating that it wronged homeowners and made restitution to a number of them.
Incredibly, Mnuchin has repeatedly denied for years that OneWest ever robo-signed on anyone, despite copious evidence to the contrary. The watchdog group Campaign for Accountability asked the Justice Department in August 2017 to investigate Mnuchin over possible false statements before Congress about robo-signing, but no investigation has been undertaken.
The Sayoc foreclosure certainly fits a pattern of dodgy documents, known robo-signers, and a successful rubber stamp from the judicial system regardless. Given what we know about how David J. Stern’s law firm whipped through foreclosures, it’s likely to have other process errors. And we know that it happens to involve several people at the heart of his suspected mail bombings.
Mnuchin co-owned and chaired the bank that eventually foreclosed on Sayoc. Soros, an investor in the bank, received one of the mail bombs. Kamala Harris, another mail bomb recipient, had an opportunity to prosecute OneWest Bank over similar foreclosure-related abuses in California when she was state attorney general, but declined to do so. Eric Holder, yet another recipient, did next to nothing to sanction bankers over foreclosure crimes.
In a final irony, David J. Stern, the law firm that handled Sayoc’s foreclosure, eventually went out of business, with its leader disbarred. But the state investigation opened into Stern in 2009 fizzled, after the two lead investigators on the case, career attorneys June Clarkson and Theresa Edwards, were fired by the Florida Attorney General’s Office, under the leadership of Pam Bondi, a close friend of Trump.
It’s highly doubtful Sayoc knew any of this when he allegedly sent bombs through the mail. But it shows how political partisans cannot often assess what forces carry the greatest impact on their lives. A miscreant bank foreclosed on Sayoc. Democrats could have done more to punish that bank and others like it for a mountain of foreclosure-related crimes, but they failed to do so. That created a sense that the system was rigged, providing an opening for a right-wing populist like Trump.
Sayoc was immediately attracted to Trump and his political movement. But when Trump got into power, he named a treasury secretary whose bank had taken away Sayoc’s home.
The story is a lesson about the toxicity of the foreclosure crisis and how it upended millions of lives. It’s also a lesson about how the failure to uphold the rule of law can reverberate in unforeseen directions, and how a combination of ignorance and partisan passions can make people believe their assailants are their saviors.
Top photo: U.S. Treasury Secretary Steven Mnuchin leaves after a press conference in Buenos Aires on July 22, 2018.