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Rep. Towns kept discounted loan a secret, records show
A Democratic committee chairman overrode his own subpoena three years ago in an investigation of former subprime mortgage lender Countrywide Financial Corp. to exclude records showing that he, other House members and congressional aides got VIP discounted loans from the company, documents show.
The procedure to keep the names secret was devised by Rep. Edolphus Towns, New York Democrat. In 2003, the 15-term congressman had two loans processed by Countrywide’s VIP section, which was established to give discounts to favored borrowers.
The effort at secrecy was reversed when Mr. Towns‘ Republican successor as chairman of the House Oversight and Government Reform Committee, California Rep. Darrell E. Issa, issued a second subpoena. It yielded Countrywide records identifying four current House members, a former member and five staff aides whose loans went through the VIP unit. Mr. Towns was on the list.
“This a cautionary tale about how opponents of government accountability use terms like smear, partisan and unnecessary to attack an investigation when what they really want is to continue a cover-up,” he said.
Most of the names had leaked to the media by the time Mr. Issa issued the committee’s final report last month on Countrywide’s use of loan discounts to buy influence with government officials. But there was no official confirmation until Mr. Issa made his report public.
Mr. Towns‘ effort to keep the loans secret was at odds with statements by Republicans and Democrats alike that full disclosure of lawmakers’ financial dealings was the best means for keeping the public aware of congressional perks, unethical conduct and fundraising.
Countrywide had been the nation’s largest home-loan originator before the housing market collapse. Many of its borrowers were left unable to repay mortgages that, in many cases, required no proof of income or a down payment. The company was purchased in 2008 by Bank of America, which now holds the VIP loan files.
Some borrowers on the VIP list became known as “Friends of Angelo” because they received discounts on orders from then-Countrywide chief executive Angelo Mozilo.
The foremost benefit of being a Countrywide VIP was access to discounted loans in which borrowers received a reduction in points and fees. Usually between $350 and $400 was waived.
For several months in 2009, Mr. Towns refused to issue a subpoena for VIP loan documents to Bank of America, a position that became politically untenable after it was revealed in the media in August that year that he, himself, had two Countrywide loans.
The Issa committee report confirmed that the VIP section processed a 30-year, $182,972 loan to Mr. Towns for a vacation home in Lutz, Fla., and a $194,540, 30-year mortgage for his Brooklyn, N.Y., residence.
Mr. Towns‘ spokesman said the report does not alter the congressman’s assertion that he did not receive any preferential treatment.
As for Mr. Towns‘ actions in 2009, spokesman Charles Lewis said: “He’s done talking about it. He said everything he’s going to say about it.”
Mr. Towns announced in April that he was retiring after 30 years of representing his Brooklyn district.
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