Countrywide Financial Mortgage Corruption–Now With U.S. Senators!
By Matt Zeitlin - Jun 17th, 2008 at 12:23 pmThe symbol of the subprime mortage crash, Countrywide Financial, turns out not to just have sold a bunch of bad mortages that then crashed and burned, but also to have given preferential mortgages to a number of Democratic Senators and other luminaries. Portfolio has the scoop:
Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide’s “V.I.P.” program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans.
Other participants in the V.I.P. program included former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke. Jackson was deputy H.U.D. secretary in the Bush administration when he received the loans in 2003. Shalala, who received two loans in 2002, had by then left the Clinton administration for her current position as president of the University of Miami. She is scheduled to receive a Presidential Medal of Freedom on June 19.
And just to make it extra classy, these folks were called “Friends of Angelo,” after Countrywide CEO Angelo Mozilo.
What’s odd about this story is the sheer banality of the corruption. Was it really that hard for sitting U.S. Senators to get good mortgage deals on their own? And moreover, shouldn’t the chairmen of the Senate Banking and Budget Committees know better than to be getting preferential mortgages that were personally priced and arranged by the CEO of a major bank?
In fairness to Dodd, he still pushed for bills that would “ban lenders from charging prepayment penalties and steering home buyers to more costly loans—both practices in which Countrywide reportedly engaged. He also called for criminal charges for such predatory lending.” But even if Dodd’s behavior wasn’t affected by his sweetheart deal, there’s still a certain sordidness to this matter that certainly lowers my opinion of him.
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