Senator Christopher Dodd got V.I.P loan from Countrywide
Bailout News, The Economy, Real Estate July 21st, 2008
Just in case you don’t know, Senator Christopher Dodd is the main guy in the Senate pushing for the new housing bill which will bail out irresponsible homeowners as well as the mortgage companies like Contrywide. Dodd is the guy who is supposed to help the homeowner and instead, he is helping the same people that gave him special loans and created this housing mess to begin with.
It turns out that Chris Dodd got a great deal in the refinancing loan of his personal home loan from Angelo Mozilo at Countrywide. According to Portfolio.com:
In June, Condé Nast Portfolio disclosed the names of five V.I.P.-loan recipients: Senators Christopher Dodd and Kent Conrad, former cabinet members Alphonso Jackson and Donna Shalala, and former United Nations Ambassador Richard Holbrooke. The Wall Street Journal reported that James Johnson and Franklin Raines, both former C.E.O.’s of government-sponsored mortgage buyer Fannie Mae, received favorable rates.
But many other V.I.P. borrowers haven’t been named until now, including former Countrywide director Henry Cisneros, who served as secretary of Housing and Urban Development in the Clinton administration; former White House staffer Paul Begala, now a commentator on CNN; and Postmaster General John Potter. Countrywide also offered special discounts to Congressional staffers involved in housing issues.
Current or prospective business partners who received special treatment include former C.E.O.’s William Esrey of Sprint, which teamed up with Countrywide to provide property information to homebuyers on their cell phones, and Bruce Karatz of KB Home, a leading homebuilder that refers customers to Countrywide for mortgages. The biggest subset of V.I.P.’s included Mozilo’s network of friends, business associates, and people he wanted to ingratiate himself and his company with; they were known in company emails and memos by the initials F.O.A.—Friends of Angelo.
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.
You can also watch the interview with with Robert Feinberg, Countrywide former V.I.P loan officer and Joanne Lipman, Portfolio Magazine on the CNBC web site.
What Angelo Mozilo was doing giving preferential treatments to his “friends” and powerful people in Washington was pretty disgusting. Another reason to oppose the housing bailout bill.
July 21st, 2008 at 8:02 pm
I am not by any means a supporter of a government bailout in the housing sector and honestly belive that depreciation in highly inflated assets, including housing, is necessary over the long run to prevent price inflation and smooth out business cycles.Speculators should not be bailed out with taxpayer money. However I can guarantee over half of the individuals complaining about Senator Dodd’s mortgage terms have received some item or good in their lifetime at below “retail” price and I am appauled and disgusted at those who have nothing better to do than complain and point fingers in such an obviously hypocritical manner. I understand scape goats are necessary in turmultuous economic times such as these but let’s not go overboard. Blame Mozilo. Blame Countrywide. Blame the city of Calabasas for having no local or city business taxes levied on Countrywide. To put a bull’s eye on his forhead and drag him through the mud for trying to receive the best deal for his family is pathetic.Go after the root of the problem. Get a life, or a job perhaps.
July 21st, 2008 at 8:31 pm
Michael,
the main difference is that Senator Dodd is the one pushing for a housing bailout when he profited from mess over at countrywide.
Yes, we have covered the root of the problem many times here on this blog and yest, I do a job (thank you very much)
July 28th, 2008 at 6:37 am
Why can’t the press just call these favors and payments what they were: bribes.
July 31st, 2008 at 1:54 pm
Some of these favorable loans were clearly inappropriate, such as for public officials who had jurisdictional or regulatory influence over Countrywide. But some of these people simply took advantage of a VIP benefit offered them. So big deal; if I knew Mozilo and he offered me a favorable loan, I’d sure take it. There’s nothing illegal or morally wrong with that.
Publishing the names of people without any particular relevance, such as the Postmaster General who simply was a Fordham alumnus — was he going to sell stamps at a discount to Mozilo in return? — is not news, it’s gossip.
September 6th, 2008 at 12:10 pm
Notice all that recieved the favorable (bribe)discounts were Democrats. Now, include Rangel( (tax free)and Obama (super property buy) So where is that clean-up that Pelosi promised ? By the way, how about Ried’s super land acquisition
Hank Barber, Lebanon,MO
September 6th, 2008 at 12:13 pm
Sorry Harry, I meant REID
Hank Barber, Lebanon, MO
October 11th, 2008 at 6:13 pm
Dodd should resign immediately …. And, then he should be indicted for taking bribes from Countrywide …YES, bribes… He is a disgrace ….
NOBAMA …
December 26th, 2008 at 8:52 pm
Wow, I didn’t know this. I am so glad that websites like this exist to keep us informed. What do the responsible homeowners get from this bailout? Nothing, right?