Well, well, well. I guess we won’t be hearing Barack Obama fuming about these cozy home loan deals, either. Portfolio has the scoop on special Countrywide loan arrangements received by Democrat Sens. Chris Dodd of Connecticut and Kent Conrad of North Dakota.
Let me repeat that, because it won’t get blaring front-page or nightly news treatment. The recipients were Democrat Sens. Chris Dodd and Kent Conrad.
As you know, Obama’s VP vetter Jim Johnson stepped down from the campaign search committee over similar arrangements with Countrywide CEO Angelo Mozila.
Two U.S. senators, two former Cabinet members, and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.
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.
Who in the most ethical Congress will push for an investigation? Show of hands?
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.
Unless they asked, V.I.P. borrowers weren’t told exactly how many points were waived on their loans, the former employee says. However, they were typically assured that they were receiving the “Friends of Angelo” discount, and that Mozilo had personally priced their loans.
The V.I.P. loans to public officials in a position to advance Countrywide’s interests raise legal and ethical questions. Countrywide’s ethics code bars directors, officers and employees from “improperly influencing the decisions of government employees or contractors by offering or promising to give money, gifts, loans, rewards, favors, or anything else of value.” Federal employees are prohibited from receiving gifts offered because of their official position, including loans on terms not generally available to the public. Senate rules prohibit members from knowingly receiving gifts worth $100 or more in a calendar year from private entities that, like Countrywide, employ a registered lobbyist.
Portfolio reports that Dodd received two discounted loans in 2003 through Countrywide’s V.I.P. program. “He borrowed $506,000 to refinance his Washington townhouse, and $275,042 to refinance a home in East Haddam, Connecticut.” Conrad “borrowed $1.07 million in 2004 to refinance his vacation home with a balcony and wraparound porch in Bethany Beach, Delaware, a block from the ocean.”
Mozilo instructed a subordinate to “take off 1 point,” or $10,700, according to a March 17, 2004, email.
Later that year, Conrad refinanced an eight-unit apartment building that he and his brothers owned in Bismarck, North Dakota. According to the former employee, the loan violated Countrywide’s normal policy of providing loans for buildings of four units or fewer. In an April 23, 2004, email, Mozilo encouraged an employee to “make an exception due to the fact that the borrower is a senator.”
The NYPost has more.
Likelihood of congressional investigations and indignant grilling of Sens. Conrad and Dodd: Same as likelihood of congressional probe of deadbeat Democrat defaulter Rep. Laura Richardson.
Ready for Sen. Conrad’s lame excuse?
He didn’t know!
“I have no way of knowing how they categorized my loan…I never asked for, expected or was aware of any special treatment.”
This dunce is chairman of the Budget Committee and a member of the Finance Committee–and he didn’t know the own terms of his loan.
But, you know, this is really all just a distraction that is not helping Sen. Conrad and Dodd’s kids…