A new report showcases the lengths executives at Countrywide Financial went to in order to provide below-market mortgage rates to well-connected Washington insiders.
Countrywide’s CEO Angelo Mozilo granted sweetheart mortgages to a number of influential lawmakers including Connecticut Democrat Chris Dodd, who is chairman of the Senate Banking Committee, and Democratic Senator Kent Conrad of North Dakota. E-mails obtained by government investigators show Countrywide employees often discussed the political influence wielded by “Friends of Angelo” as grounds for granting the discounts.
The 63-page report, titled “Countrywide’s Systematic and Successful Effort to Buy Influence and Block Reform” was released by Darrell Issa of California, the top Republican on the House Government and Oversight Committee. Some of the e-mails reprinted in the report were released to the committee by former Fannie Mae CEO Franklin Raines, who is among those who have recieved preferential treatment from Countrywide. Robert Feinberg, a former Countrywide employee who assisted in processing “Friends of Angelo” loans, also provided e-mails to the committee.
Mr. Mozilo unsuccessfully attempted to give former North Carolina Democratic Sen. John Edwards a special deal on his mortgage when he was seeking financing for a $3.8 million home in Washington D.C.’s stylish Georgetown. The CEO instructed his loan processors to help Edwards because “Edwards will probably be either the vice president or presidential candidate for the Democrats in 2004. Do whatever it takes to get it closed by the 23rd and call me for the pricing.”
In the end, Edwards used a different company to finance his home.
Countrywide also gave discounts to congressional staffers who served influential members. E-mails about a mortgage for Joyce Brayboy, chief of staff for Rep. Melvin Watt, a Democrat from North Carolina, noted “[Brayboy] reports directly to Congressman Mel Watt who introduced predatory lending legislation to address unscrupulous lending practices, and they do view Countrywide as a trusted advisor.”
Other e-mails related to Dodd and Conrad are revealing but not as explicit.
When this story broke last summer, both senators denied any knowledge they had received preferential treatment from Countrywide, which was absorbed by Bank of America last year.
“This investigation finds that Countrywide embarked in a determined and calculated effort to buy influence – employees openly weighed the political influence of targeted officials when deciding what perks to offer,” said Issa in a statement. “Countrywide VIPs in positions of key responsibility didn’t innocently stumble into loans with reduced rates and waived fees – they were recruited into the program personally by high-ranking company officials including former CEO Angelo Mozilo.”
House Republicans would like to use subpoena power to obtain more records relating to the former mortgage provider’s dealings with lawmakers and politicos.