The Subprime Hall of Shame just got a lot bigger, based on this Portfolio magazine investigation into Countrywide Financial Corp.’s special VIP program involving mortgage loans at favorable rates for friends of former CEO Angelo Mazilo.
Former Fannie Mae CEO James Johnson, tapped to help vet vice presidential candidates for Sen. Barack Obama, resigned this week from that position after reports that he received loans at special rates from Countrywide under the program.
Now, Portfolio’s investigation names other “friends of Angelo’s ” who received preferential treatment as Dodd, a Democrat from Connecticut who chairs the Senate Banking Committee; Sen. Kent Conrad, D-North Dakota; two former cabinet members, and a former ambassador to the United Nations. Portfolio cited company documents, emails and a former employee as sources.
Dodd received two loans for houses in Washington and Connecticut in 2003, the magazine said. His wife, Jackie Clegg, told Portfolio the couple had checked with two other lenders and found them offering similar rates. But Portfolio said Dodd saved $58,000 on his Washington residence and $17,000 on the Connecticut house, through the special program.
Portfolio said it worked this way:
“„According to company documents and emails, the V.I.P.’s received better deals than those available to ordinary borrowers. Home-loan customers can reduce their interest rates by paying “points”—one point equals 1 percent of the loan’s value. For V.I.P.’s, Countrywide often waived at least half a point and eliminated fees amounting to hundreds of dollars for underwriting, processing and document preparation. If interest rates fell while a V.I.P. loan was pending, Countrywide provided a free “float-down” to the lower rate, eschewing its usual charge of half a point. Some V.I.P.’s who bought or refinanced investment properties were often given the lower interest rate associated with primary residences.
Dodd’s office still was preparing a response, Portfolio said. If Dodd, indeed, got special treatment from Countrywide, this is a huge deal. As chairman of the Banking Committee, Dodd has been an outspoken critic of lenders during the mortgage crisis. He’s proposed criminal penalties for predatory lending and has moved to ban prepayment penalties and other loan features that were common during the housing boom – features that Countrywide frequently employed in its lending practices. He’s also leading an effort for a mortgage rescue plan, and is widely respected by consumer activists.
Countrywide, once the nation’s largest subprime lender, imploded last year as the mortgage market collapsed, and has become the symbol for excessive and irresponsible lending.
Others getting loans through the VIP program include former Housing and Urban Development Secretary Alphonso Jackson, former Health and Human Services Secretary Donna Shalala, and former U.N. Ambassador and assistant secretary of state Richard Holbrooke.
You could pick apart this list to try to define who looks the worst for being on it. Certainly Jackson’s presence is highly troublesome, considering he was in charge of helping to provide affordable housing and homeownership possibilities for families with modest incomes, at the same time he apparently was getting special treatment from a lender accused of exploiting those same kinds of borrowers.
But it doesn’t really matter who tops the list. No one looks good, just by their very presence. Being a Friend of Angelo’s, it seems, isn’t all it was cracked up to be, back in the days when Countrywide was booming and no one was looking.
Rep. Patrick McHenry: Please, Conservatives, Fill Out Your Census Forms!
The conservative congressman from North Carolina, a constant critic of the census -- one of the people who sounded the alarm about politicization when the
Rep. Paulsen allies with medical device industry to relax FDA oversight
Source: Flickr; Republicanconference (www.flickr.com/photos/republicanconference) On the heels of the Minnesota Independent story last week about U.S. Rep. Erik Paulsen’s cozy financial relationship with the medical device industry, the New York Times reported Tuesday that some health professionals are alarmed by Paulsen’s push to relax Food and Drug Administration (FDA) oversight
Rep. Parker Griffith (R-Ala.)
One of the most conservative Democrats in the House -- a freshman who said he couldn’t support Nancy Pelosi again -- is going to switch over to the GOP. Josh
Rep. Paulsen touts balanced budget constitutional amendment
In a post for the conservative blog True North , U.S. Rep
Rep. Paulsen, Karl Rove the latest to get ‘glittered’
Rep. Erik Paulsen and former Bush staffer Karl Rove were both showered with glitter at the Midwest Leadership Conference Friday
Rep. Paul Ryan to deliver SOTU response
Chairman of the House Budget Committee Rep. Paul Ryan (R-Wis.) will deliver the Republican response to the State of the Union Tuesday, according to Mike Allen
Rep. Perlmutter criticizes House measure that would eliminate 800K federal jobs
Congressman Ed Perlmutter today issued a scathing statement criticizing the House of Representatives for passing a spending bill that could put nearly a million federal employees out of work. The Colorado delegation voted strictly on party lines, with all four Republicans voting in favor of the bill and the three Democrats voting in opposition. Perlmutter’s statement: “My number one priority is to get people back to work because that’s the best thing we can do to pay our debt and move forward toward economic stability
Rep. Perlmutter to hold constituent meet-up in grocery store
Colorado Congressman Ed Perlmutter will hold a Government in the Grocery constituent meet-up this evening from 5-7 at the Safeway at 38th and Wadsworth in Wheat Ridge. The address is 3900 Wadsworth. The meeting, where Perlmutter typically sits at a folding table and talks to whomever shows up, is free and open to the public
Rep. Peace, ACLU seek investigation of soldier’s allegations of racial discrimination in Afghanistan
Both Rep. Steve Pearce (R-NM) and the American Civil Liberties Union agree: There needs to be an investigation into Spc.
School of Hock
A growing number of college grads are defaulting on their student loans as the economy worsens.