Two Senators Appear to be "Friends of Countrywide"
The loud "thud" you just heard over in the corner of the Senate hearing room was Senator Chris Dodd's vice presidential hopes hitting the wall.
The Senator was the second major political figure caught up in and possibly brought down by various aspects of the mortgage mess in general and Countrywide Financial in particular.
The Senator, a Democrat from Connecticut
and Chairman of the Senate Banking Committee which regulates mortgage lending, was named in an article by Julie Hirschfeld Davis of the Associated Press and earlier by Conde Nast Portfolio magazine, as one of two senators - the other being Senator Kent Conrad (D - ND) - as having received preferential treatment from Countrywide CEO Angelo Mozilo in obtaining mortgage loans. Dodd had earlier this year called Countrywide's lending practices "abusive."
One week ago the allegation of a similar deal with Countrywide forced former Fannie Mae Chairman Jim Johnson to step down from his volunteer position as head of Barack Obama's vice presidential search team.
The three men were alleged to be participants in a special program for "friends" of Mozilo that awarded discounts and waived fees for those friends. Portfolio, citing internal Countrywide documents, said that
the company made two loans to Dodd in 2003, shaving three-eights of a point off of a $506,000 loan to refinance a townhouse in Washington. The discount saved Dodd about $2,000 in interest payment. A second loan to refinance a house in Connecticut was written at a quarter point off the going rate, saving the Senator about $700 a year.
Conrad, who said he was referred to Mozilo by Jim Johnson, received a one point discount on orders of Mozilo which saved him about $10,000 per year on a $1.07 million mortgage used to purchase a vacation home in Delaware. According to the Associated Press, Countrywide also made an exception in lending Conrad $96,000 in 2004 to buy an 8-unit apartment building in spite of its policy of only providing loans for buildings of four units or fewer.
"They said they frequently made exceptions, especially for good customers," Conrad said.
An internal e-mail from Mozilo, however, said the exception was "due to the fact that the borrower is a senator," according to the Portfolio report.
"Friends of Countrywide"
