- Current Issue
SIGN IN to access the Harper’s archive
ALERT: Usernames and passwords from the old Harpers.org will no longer work. To create a new password and add or verify your email address, please sign in to customer care and select Email/Password Information. (To learn about the change, please read our FAQ.)
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:
Lucas Mann on hope and change in a minor-league-baseball city
Minimum number of baboons forced to smoke crack in a 1989 study testing the efficacy of cigarettes as a drug delivery device:
A reduction in distrust toward atheists was documented among pious Canadians who are reminded of the Vancouver police.
A Missouri cinema apologized for hiring an actor dressed in body armor and carrying a fake rifle to appear at a screening of Iron Man 3.
Subscribe to the Weekly Review newsletter. Don’t worry, we won’t sell your email address!
Winner of the 2012 Olivier Rebbot Award for best photographic reporting from abroad in magazines or books