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Executives at Countrywide Financial, one of the biggest names of the housing boom, routinely violated internal company policies to provide below-market rates on home loans to the politically connected and powerful, according to a congressional report to be released today.
Loan documents show how far Countrywide went to give loans to VIPs through a program known as “Friends of Angelo,” named after the company’s chief executive Angelo Mozilo, according to congressional investigators. Executives manually overrode the company’s computer software that routinely warned that certain additional fees would be necessary to accommodate below-market rates…
A report by House Republicans on the investigation was obtained by The Washington Post in advance of its release. Recipients of special loans included senators and other officials, prominent businessmen, congressional aides, celebrities and journalists, including Sen. Kent Conrad (D-N.D.), Sen. Christopher J. Dodd (D-Conn.), former U.N. ambassador Richard C. Holbrooke, former Fannie Mae chief executive James Johnson, former Department of Housing and Urban Development secretary Alphonso Jackson, Jackson’s daughter and others.
According to the report, in 2002 Chuck Tooley, the mayor of Billings, Montana, asked Countrywide’s Washington lobbyist about eliminating mortgage insurance he thought he didn’t need. The lobbyist took it up with a number of company higher-ups, including the managing director, who said, “I’m usually in favor of settling on the side of the borrower with political influence. However, in this case, I think the MI payment for the life of the loan has the potential of being a greater number than the Mayor of Billings Montana influence. Jimmie, since you work with the mayors, what’s your opinion?”
The lobbyist responded that Billings “sits on the Advisory Board of the U.S. Conference of Mayors” and “is also very likely to hit the speaking circuit as Mayor.” Another top executive weighed in: “Due to the Mayor’s (and his wife’s) potential influence and accessibility to media outlets and publications, [Countrywide should] offer him a refi and either give him a .25 credit toward the discount or a $500.00 credit toward closing costs. Either way, we’re showing our good faith.”
The lobbyist agreed, writing “for political and public relations reasons, I think this is a better option,” and the offer was passed along to Tooley.
More from Ken Silverstein:
Perspective — October 23, 2013, 8:00 am
How pro-oil Louisiana politicians have shaped American environmental policy
Postcard — October 16, 2013, 8:00 am
A trip to one of the properties at issue in Louisiana’s oil-pollution lawsuits
Estimated acres of forest Henry David Thoreau burned down in 1844 trying to cook fish he had caught for dinner:
The bombardier beetle, which can fire liquid at its enemies from its rear end at up to 300 squirts per second, was being scrutinized in the hope of building a better airplane engine.
London Fire Brigade investigators blamed a building fire in South London on a bird that carried a lit cigarette to its rooftop nest. “Smokers,” said neighborhood baker Richard Scroggs. “What can you say?”
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“American politics has often been an arena for angry minds.”