Senators caught trashing their own mortgage loans
When Senator Kent Conrad of North Dakota wanted a mortgage for his beach house, he turned to a Washington insider, James A. Johnson, former head of Fannie Mae, the government mortgage giant, who then put the senator in touch with Angelo Mozilo, chief executive of the mortgage lender Countrywide Financial.It would be ironic that a guy who needed help from a convicted felon to buy his house would exclude others who got loans from a legitimate company that he has been demonizing. Say Anything challenges Conrad's parsing of his "meeting" with Mozilo.The ensuing telephone call between Mr. Conrad and Mr. Mozilo led to two Countrywide mortgages, including one in which the company bent its rules to give Mr. Conrad a loan.
Those loans are now among a number of Countrywide mortgages at the center of an examination into whether a number of top politicians in Washington — members of Congress, the cabinet and celebrated advisers — received favorable deals from a company whose lax lending standards are at the center of the subprime mortgage crisis.
This week, Mr. Johnson, whom Mr. Conrad turned to for help, was forced to step down as head of Senator Barack Obama’s vice-presidential selection committee in part over Countrywide home mortgage loans that Mr. Johnson had received at favorable rates.
At the center of the scrutiny is Countrywide’s “V.I.P.” program, also known as the “Friend of Angelo” program, in which Countrywide appeared to bend its lending rules for prominent people. Now, many of those receiving Countrywide home mortgages say they were not aware the company might have been working behind the scenes to give them favorable loan terms.
Senator Christopher J. Dodd of Connecticut, chairman of the Senate Banking Committee and a leader in the effort to help homeowners caught in the mortgage crisis, denied on Friday that he received preferential treatment for his two Countrywide loans. A spokesman for Mr. Dodd, Bryan DeAngelis, said that neither Mr. Dodd nor his wife had spoken to Mr. Mozilo about their loans.
“As a United States senator, I would never ask or expect to be treated differently than anyone else refinancing their home,” Mr. Dodd said in a statement. “This suggestion is outrageous and contrary to my entire career in public service. Just like millions of other Americans, we shopped around and received competitive rates.”
But Portfolio.com, the Web site of the business magazine Portfolio, cited internal documents indicating that Countrywide had reduced the rate on the mortgage of Mr. Dodd’s Washington town house by three-eighths of a point, saving him $2,000 a year in interest payments, and reduced the rate on a Connecticut house by a quarter point, saving $17,000 over the life of the loan.
For Mr. Dodd, who is said to be on a short list for vice president for Mr. Obama, the Countrywide mortgages may prove to be a problem in light of Mr. Obama’s ejection Mr. Johnson from his campaign over a similar issue.
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It is nice to see the demagogues get caught on their own petard.
About that culture of corruption slogan....
The Washington Post has more details on the loans.
...There is much more in the Post story on loans to other Democrats as well as Alfonso Jackson a former Bush housing secretary.
... by reaching out to Mozilo, Conrad became another VIP enrolled in the "FOA" -- Friends of Angelo -- loan program."[T]ake off 1 point," Mozilo instructed a subordinate in a March 17, 2004, e-mail obtained by Condé Nast Portfolio magazine. In another e-mail that April about a Conrad loan, Mozilo wrote: "Make an exception due to the fact that the borrower is a senator."
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