Countrywide issued hundreds of VIP loans to buy influence, report says

[BadGimp]

Source: CNN Money

NEW YORK (CNNMoney) -- Countrywide Financial, once the nation's largest mortgage lender, bought influence on Capitol Hill by issuing hundreds of sweetheart loans for members of Congress, their staffs and other government employees, according to a report issued by the House of Representatives Thursday.

The three-year investigation, which was led by House Oversight and Government Reform Committee Chairman Darrell Issa, revealed the extent to which Countrywide was offering discounted loans and other perks to Congress members and other officials in order to benefit its business interests.

Referred to as the "VIP program" or the "Friends of Angelo" program -- after former Countrywide founder and CEO Angelo Mozilo -- this preferential treatment varied with the importance and influence of the borrowers and included such perks as lower loan rates, expedited loan processing and less stringent underwriting standards, the report said.




Read more: http://money.cnn.com//2012/07/05/real_estate/countrywide-mortgage/index.htm?eref=mrss_igoogle_business

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I've read several news stories on this and NONE mentioned any names of those who benefited. My guess is there are both Republicans and Democrats who would be destroyed, and they have agreed to work together to keep the story down, and not to use it to attck each other. [h3]WHERE IS THE USUALLY FEROCIOUS GOP ATTACK DOGFS LOOKING FOR DEMO BLOOD??!!?[/h3]

[Wilms]

1. A few names here...and it's a bi-partisan list.

http://news.yahoo.com/report-countrywide-won-influence-discounts-030119140.html

From this thread...

http://www.democraticunderground.com/101634282

[Ian David]

13. I don't see any Dems there that would be any great loss. n/t

[Mnpaul]

14. You have to remember that it is an Issa investigation

Dodd was investigated by the Senate(which actually did investigate) and found that Dodd didn't get a special rate. The same rate was offered at several other banks to anyone with the same qualifications. If I remember correctly, it was two loans valued at 800k on a 15yr note. The senate criticized him for giving the appearance of improper behavior.

Issa is a fool for bringing this up again

From the Yahoo story:

The report said Fannie assigned as many as 70 lobbyists to the Financial Services Committee while it considered legislation to reform the company from 2000 to 2005. Four reform bills were introduced in the House during the period, and none made it out of the committee.

You have to remember that the Republicans controlled that committee and that among the lobbyists you will find none other than the Newt.
http://www.ajc.com/metro/content/shared-blogs/ajc/politicalinsider/entries/2008/12/08/newt_gingrich_and_freddie_mac.html

Of course they want you to believe that Barney Frank forced the Republican majority to kill those reform bills

[Wilms]

19. Wow. Thanks for straightening me out on that.

I admit, I did wonder if I was seeing that correctly.

[hughee99]

22. The Senate's findings were...

The bipartisan Senate Select Committee on Ethics said it found "no credible evidence" that either Sen. Christopher Dodd of Connecticut or Sen. Kent Conrad of North Dakota knowingly sought out a special loan or treatment because of their standing.

Though there seems to be some evidence that Dodd got a pretty sweet deal, it's not clear if he realized it (Because this kind of stuff can be really confusing if you don't have a banking background), and I don't recall anything to suggest that he "sought out" any of it. I'm sure his Contrywide VIP FOA loan was no better than anyone else with the same qualification (ie, anyone else on the Senate Banking Committee).

In the end, Dodd's not even in office anymore, and if Issa's going to bring it up, it shows the contrast between the "shady" Dems who left office and the shady Repukes that are still in office.

[dtom67]

2. that is what I wanna know...

Who are we talking about?

anyone who took bribes , Dem or Repub, should be dragged through the streets as a traitor.

Maybe the problem is that there would be no one left ...

Still have hope for democracy, but stories like this make it hard.

[leveymg]

3. They're named in the report at a footnote at page 7:

http://oversight.house.gov/wp-content/uploads/2012/07/Countrywide-112th-Report-7.3.12-1207-PM.pdf

[Hassin Bin Sober]

4. I've alway been a little dubious of this "preferential treatment" story.

I'm in the business. We often market to a select "group" of high net worth individuals. One of our guys had an account with the Chicago Bears. Everybody gets "preferential treatment and expedited underwriting" especially high net worth people. And if the underwriter has to look the other way once in a while, it gets done to make the account rep look like a hero.

I'm not saying there wasn't any shenanigans. But when I looked at what Dodd supposedly received it didn't seem like a big deal to me. Was there an appearance of impropriety? Sure. I just don't think these people got anything more than what other rich folks got. They got their asses kissed. Sure. But so do most rich folks.

I once had the displeasure of tunning in to a Sean Hannity radio show rant where he went in to a tirade about Obama's "OMG!!!! JUMBO MORTGAGE!!!!!" he received from Northern Trust bank. And how Obama received such a low rate. It was all bullshit and nothing NTB wouldn't have offered to any other high net worth client.

[Ruby the Liberal]

5. Indeed. And if the loan is tied to a brokerage account

often times the interest can be as little at 1.9% (even on second homes) with no credit or underwriting (up to a % of the holdings).

[Skittles]

6. WTF

why give discounts to HIGH NET WORTH PEOPLE? This is SICKENING.

[yardwork]

9. I'm with you, Skittles. This is sickening.

[Ruby the Liberal]

11. They are considered a better credit risk

(which interest rates are tied to) and have the ability to pool assets for securitization.

[Hassin Bin Sober]

17. Because a 2% commission on a $3 million dollar loan is better than a 2% commission on a $150,000 loan

On a $3 million dollar loan I can pay all your closing costs and send a limo to pick you up for the closing.

You are lucky if you get your parking validated on a $150,000 loan. And you are paying all your own costs.

Here in our Chicago office a $300-$400k loan is pretty common. At $400k I can cut you a better deal than I can for a $60k loan. At $60k we probably have to charge you up front points. At $400k there are no points.

I used to work for a company that was purchased by a Texas mortgage company. The new president threw a fit when he saw nobody charged points here. In fact, their software system was set up to include two points and you had to get authorization to waive points. A real pain in the ass. He couldn't figure out the difference between markets - $60k FHA loans vs. a very competitive market with an average $3-400 k loan size.

[jtuck004]

18. Look at the Return on Investment - Mozilo's fine - $60 million, of which Countryside pays $20ish,

He has a net worth of about $600 million.

He knows people with no money don't make laws that get in the way of profits, or keep your ass out of jail. He knows that his is just one crime among so many, and because of his investment in greed and treason about all he and his crooked bankster friends have to endure is a few screeching voices and protesters, then they go home to their money.

[chervilant]

20. AT LEAST $600 million!

I distinctly remember the first time I saw the grotesquely-tanned Mozilo addressing a sizable contingent of his 'loyal minions' and throwing out the statistic that "20% of high risk loans end in foreclosure." Mozilo then asserted, "we are looking at this statistic all wrong" --pausing for dramatic effect-- "This means that 80% of high risk loans (emphasis his) are successful." Mozilo informed us that Countrywide intended to tap into this vast pool of potential borrowers--what he called the 'historically disenfranchised' borrowers--and went on to describe the new sub-prime products Countrywide was introducing to the public.

This was all smoke and mirrors. Every GOOD lender knows that credit-worthiness is the cornerstone of mortgage underwriting. But, it didn't take long for savvy loan officers to understand that anyone could be made 'eligible' for a home loan.

I had clients who wanted to 'buy' houses that were far outside their means, and they would NOT listen to my adjurations about being 'one paycheck away from financial catastrophe.' I realize now that these poor people just shopped around for a loan officer who would write the loan they wanted.

I could go on for days about how we were 'encouraged' to market the sub-primes. Of course, the big five were paying loan officers much higher commissions on the sub-primes, a fact that my manager threw in my face each time he berated me for not marketing those vile pieces of corporatist crap.

Most loan officers were totally on board the sub-prime bandwagon from the get go. Indeed, if I had been given my promotion when it was promised --in the spring of the first "year of the sub-primes"--I would have made a minimum of $40,000/month during those glory days, before I understood what these loans really represented. I was quite naive then. But, it didn't take me long to get the bigger picture. I now realize how lucky I was not to market OR write sub-prime loans. (I suspect that a few of my peers had similar experiences.)

I left (fortuitously) right before the internal auditors (Feds?) executed an early morning raid on our Galleria-area high-rise offices, re-keyed the locks, and confiscated all the files and computers. I had lunch with our admin one last time after that, but I don't know the legal outcome for my manager and his hotshot loan officers. Rumor has it they were writing homestead mortgages for a group of California real estate investors--a serious infraction both federally and internally.

[jtuck004]

21. I'm glad you got out. The tyrants can't do their evil without other's arms and legs and eyes,

but it is really hard to see what part we play in a machine where we have little time to do anything but our job, things seem to be going well, and the people that should be regulating the work are profiting from the evil of the worst of crooked, greedy bastards.

[stockholmer]

7. Former heads of Fannie Mae James Johnson, Daniel Mudd and Franklin Raines.

Life in prison for these 3 is too good.

Raines' total Fannie Mae CEO compensation was $91.1 million, including some $52.6 million in bonuses, all whilst so many scandals, botched accounting practices and incredibly damaging fraudulent loans were given out that the US citizens are on the the hook for literally trillions of dollars when its total losses are all unwound.

[Ruby the Liberal]

12. Highly unlikely that the loans in question

were under Fannie/Freddie/Ginnie.

These are likely all Jumbos which start at the cutoff of $417,000

[yardwork]

8. ...and those in Congress blamed it all on poor people. Filthy lying hypocrites.

[L0oniX]

10. Gee ...are you implying that both sides are the same?

Whodathunkit.

[cstanleytech]

15. Its not that they are the same its that the same

lobbyists and corporations do their damnedest to get their support for the laws and bills they want passed, doesnt always work though but it is disheartening when they do pass something thats not for the good of the people of the united states as a whole.

[OnyxCollie]

16. K&R. nt