Countrywide won influence with discounts

[cptau 169]

Until the politicians and their staffers start going to jail for this kind of thing, things are going to get worse.........

Their personal ethics should have stopped this, but that is a lost cause.

I remember reading once about Congressman Gerald Ford going to vote on a military expenditure bill in Congress, but a snowstorm had blocked the local streets. The US Army sent a jeep to pick him up at his home, but Ford declined the ride as it was a conflict of interest. Ford drove an old Volkswagen in by himself. We need more Jerry Fords in Congress now,

WASHINGTON (AP) — The former Countrywide Financial Corp., whose subprime loans helped start the nation's foreclosure crisis, made hundreds of discount loans to buy influence with members of Congress, congressional staff, top government officials and executives of troubled mortgage giant Fannie Mae, according to a House report.

The report, obtained by The Associated Press, said the discounts - from January 1996 to June 2008 - were not only aimed at gaining influence for the company but to help Fannie Mae. Countrywide's business depended largely on Fannie, which at the time was trying to fend off more government regulation but eventually had to come under government control.

Fannie Mae was responsible for purchasing a large volume of Countrywide's subprime mortgages. Countrywide was taken over by Bank of America in January 2008, relieving the financial services industry and regulators from the messy task of cleaning up the bankruptcy of a company that was servicing 9 million U.S. home loans worth $1.5 trillion at a time when the nation faced a widening credit crisis, massive foreclosures and an economic downturn.

The House Oversight and Government Reform Committee also named six current and former members of Congress who received discount loans, but all of their names had surfaced previously. Other previously mentioned names included former top executive branch officials and three chief executives of Fannie Mae.

"Documents and testimony obtained by the committee show the VIP loan program was a tool used by Countrywide to build goodwill with lawmakers and other individuals positioned to benefit the company," the report said. "In the years that led up to the 2007 housing market decline, Countrywide VIPs were positioned to affect dozens of pieces of legislation that would have reformed Fannie" and its rival Freddie Mac, the committee said.

Some of the discounts were ordered personally by former Countrywide chief executive Angelo Mozilo. Those recipients were known as "Friends of Angelo."

"The Committee's investigation found Countrywide lobbyists and CEO Angelo Mozilo used discounted loans as a tool to ingratiate itself with policymakers in an effort to benefit the company's business interests," said Rep. Darrell Issa, a California Republican who heads the committee. "This preferential treatment — that varied depending on the influence of the borrower — was not routinely offered to the public."

Issa said that while Mozilo mocked Fannie Mae and top executives for its crony capitalism business model, he would nonetheless personally intercede to ensure executives had access to discounted Countrywide loans. "These relationships helped Mozilo increase his own company's profits while dumping the risk of bad loans on taxpayers," the report said.

The Justice Department has not prosecuted any Countrywide official, but the House committee's report said documents and testimony show that Mozilo and company lobbyists "may have skirted the federal bribery statute by keeping conversations about discounts and other forms of preferential treatment internal. Rather than making quid pro quo arrangements with lawmakers and staff, Countrywide used the VIP loan program to cast a wide net of influence."

The Securities and Exchange Commission in October 2010 slapped Mozilo with a $22.5 million penalty to settle charges that he and two other former Countrywide executives misled investors as the subprime mortgage crisis began. Mozilo also was banned from ever again serving as an officer or director of a publicly traded company.

He also agreed to pay another $45 million to settle other violations for a total settlement of $67.5 million that was to be returned to investors who were harmed.

The report said that until the housing market became swamped with foreclosures, "Countrywide's effort to build goodwill on Capitol Hill worked."

The company became a trusted adviser in Congress and was consulted when the House Financial Services Committee and Senate Banking Committee considered reform of Fannie and Freddie and unfair lending practices.

"If Countrywide's lobbyists, and Mozilo himself, were more strictly prohibited from arranging preferential treatment for members of Congress and congressional staff, it is possible that efforts to reform (Fannie and Freddie) would have been met with less resistance," the report said.

The report said Fannie Mae assigned as many as 70 lobbyists to the Financial Services Committee while it considered legislation to overhaul the company from 2000 to 2005. Four reform bills were introduced in the House during the period, and none made it out of the committee.

Hit with staggering losses, Fannie and Freddie came under government control in September 2008. As of Dec. 31, 2011, the Treasury Department had committed more than $183 billion to support the two companies - and there's no end in sight.

Among those who received loan discounts from Countrywide, the report said, were:

-Former Senate Banking Committee Chairman Christopher Dodd, D-Conn.

-Senate Budget Committee Chairman Kent Conrad, D-N.D.

-Mary Jane Collipriest, who was communications director for former Sen. Robert Bennett, R-Utah, then a member of the Banking Committee. The report said Dodd referred Collipriest to Countrywide's VIP unit. Dodd, when commenting on his own loans, has said he was unaware of the discount program.

-Rep. Howard "Buck" McKeon, R-Calif., chairman of the House Armed Services Committee.

-Rep. Edolphus Towns, D-N.Y., former chairman of the Oversight Committee. Towns issued the first subpoena to Bank of America for Countrywide documents, and current Chairman Darrell Issa, R-Calif., subpoenaed more documents. The committee said that in responding to the Towns subpoena, Bank of America left out documents related to Towns' loan.

-Rep. Elton Gallegly, R-Calif.

-Top staff members of the House Financial Services Committee.

-A staff member of Rep. Ruben Hinojosa, D-Texas, a member of the Financial Services Committee.

-Former Rep. Tom Campbell, R-Calif.

-Former Housing and Urban Development Secretaries Alphonso Jackson and Henry Cisneros; and former Health and Human Services Secretary Donna Shalala. The VIP unit processed Cisneros' loan after he joined Fannie's board of directors.

-Rep. Pete Sessions, R-Texas, was an exception. He told the VIP unit not to give him a discount, and he did not receive one.

-Former Fannie Mae heads James Johnson, Daniel Mudd and Franklin Raines. Countrywide took a loss on Mudd's loan. Fannie employees were the most frequent recipients of VIP loans. Johnson received a discount after Mozilo waived problems with his credit rating.

The report said Mozilo "ordered the loan approved, and gave Johnson a break. He instructed the VIP unit: 'Charge him 1/2 under prime. Don't worry about (the credit score). He is constantly on the road and therefore pays his bills on an irregular basis but he ultimately pays them.'"

Johnson in 2008 resigned as a leader of then-candidate Barack Obama's vice presidential search committee after The Wall Street Journal reported he had received $7 million in Countrywide discounted loans.

The report said those who received the discounts knew the loans were handled by a special VIP unit.

"The documents produced by the bank show that VIP borrowers received paperwork from Countrywide that clearly identified the VIP unit as the point of contact," the committee said.

The standard discount was 0.5 waived points. Countrywide also waived junk fees that usually ranged from $350 to $400.

http://news.yahoo.co...-030119140.html

[arnaldoabru 11]

I've been telling yall the whole system is rigged for the 1%

[Tigermike 3,425]

I've been telling yall the whole system is rigged for the 1%

The problems with your telling us is that 1% you keep telling us about is the Republicans.

[tgr4lfe 220]

Countrywide had bought out our mortgage on our house in Auburn, then BoA bought them out. Neither of them are worth a pile of excrement!! BoA refused to work with us when we moved to Nashville in the summer of 2007, then the housing market tanked that fall. We had the house on the market 3 times from July 2007 until 2009 and had renter from November 2007 to January 2009. We had one showing during it being on the market for that first 6 months until we got the renter and another 6 months at the end of her lease that end November 2008. During which time we were trying to float rent on apartment in Nashville and the mortgage, even though the rent we were getting was not enough to cover the mortgage. Neither of them would work on restructuring the loan to make it more affordable for us. We had a conventional loan that was less than 80% LTV at time we first put it up for sale. Then BoA turns down an offer on the house when it was put up on a short sale!! Then started foreclosure proceedings w/o notification. We had gotten to the point of not being able to afford to keep up the payments at all and maintain living standards here. Fannie Mae ended up buying the house at the foreclosure auction in February 2010. Go figure that!! I have my conspiracy theories about Fannie and Freddie to be nothing but lining pockets of that 1%, who are also well connected in politics and now Fannie/Freddie own a lot of the properties that they helped get into foreclosure. Ours wasn't one of theirs b/c it was conventional loan, but having looked at different things online that is my theory.

[AURaptor 1,137]

I've been telling yall the whole system is rigged for the 1%

So, Senator Chris Dodd is a part of that 1% ?

GOP Senator Sessions requested no special treatment, and he didn't get any. Wonder why Chris did't do the same ?

[arnaldoabru 11]

Countrywide had bought out our mortgage on our house in Auburn, then BoA bought them out. Neither of them are worth a pile of excrement!! BoA refused to work with us when we moved to Nashville in the summer of 2007, then the housing market tanked that fall. We had the house on the market 3 times from July 2007 until 2009 and had renter from November 2007 to January 2009. We had one showing during it being on the market for that first 6 months until we got the renter and another 6 months at the end of her lease that end November 2008. During which time we were trying to float rent on apartment in Nashville and the mortgage, even though the rent we were getting was not enough to cover the mortgage. Neither of them would work on restructuring the loan to make it more affordable for us. We had a conventional loan that was less than 80% LTV at time we first put it up for sale. Then BoA turns down an offer on the house when it was put up on a short sale!! Then started foreclosure proceedings w/o notification. We had gotten to the point of not being able to afford to keep up the payments at all and maintain living standards here. Fannie Mae ended up buying the house at the foreclosure auction in February 2010. Go figure that!! I have my conspiracy theories about Fannie and Freddie to be nothing but lining pockets of that 1%, who are also well connected in politics and now Fannie/Freddie own a lot of the properties that they helped get into foreclosure. Ours wasn't one of theirs b/c it was conventional loan, but having looked at different things online that is my theory.

I could tell you horror stories about BOA. L et me guess, they never got your paper work.

[au2004ece 30]

Countrywide had bought out our mortgage on our house in Auburn, then BoA bought them out. Neither of them are worth a pile of excrement!! BoA refused to work with us when we moved to Nashville in the summer of 2007, then the housing market tanked that fall. We had the house on the market 3 times from July 2007 until 2009 and had renter from November 2007 to January 2009. We had one showing during it being on the market for that first 6 months until we got the renter and another 6 months at the end of her lease that end November 2008. During which time we were trying to float rent on apartment in Nashville and the mortgage, even though the rent we were getting was not enough to cover the mortgage. Neither of them would work on restructuring the loan to make it more affordable for us. We had a conventional loan that was less than 80% LTV at time we first put it up for sale. Then BoA turns down an offer on the house when it was put up on a short sale!! Then started foreclosure proceedings w/o notification. We had gotten to the point of not being able to afford to keep up the payments at all and maintain living standards here. Fannie Mae ended up buying the house at the foreclosure auction in February 2010. Go figure that!! I have my conspiracy theories about Fannie and Freddie to be nothing but lining pockets of that 1%, who are also well connected in politics and now Fannie/Freddie own a lot of the properties that they helped get into foreclosure. Ours wasn't one of theirs b/c it was conventional loan, but having looked at different things online that is my theory.

Why would you have needed a short sell if you had less than 80% LTV? A short sell is when you sell the house for less than the amount you owe the bank and they write-off the difference.

Do you mean 80% LTV of the original value and the short-sell price was some 30% less than what you originally paid for the house?

[tgr4lfe 220]

Countrywide had bought out our mortgage on our house in Auburn, then BoA bought them out. Neither of them are worth a pile of excrement!! BoA refused to work with us when we moved to Nashville in the summer of 2007, then the housing market tanked that fall. We had the house on the market 3 times from July 2007 until 2009 and had renter from November 2007 to January 2009. We had one showing during it being on the market for that first 6 months until we got the renter and another 6 months at the end of her lease that end November 2008. During which time we were trying to float rent on apartment in Nashville and the mortgage, even though the rent we were getting was not enough to cover the mortgage. Neither of them would work on restructuring the loan to make it more affordable for us. We had a conventional loan that was less than 80% LTV at time we first put it up for sale. Then BoA turns down an offer on the house when it was put up on a short sale!! Then started foreclosure proceedings w/o notification. We had gotten to the point of not being able to afford to keep up the payments at all and maintain living standards here. Fannie Mae ended up buying the house at the foreclosure auction in February 2010. Go figure that!! I have my conspiracy theories about Fannie and Freddie to be nothing but lining pockets of that 1%, who are also well connected in politics and now Fannie/Freddie own a lot of the properties that they helped get into foreclosure. Ours wasn't one of theirs b/c it was conventional loan, but having looked at different things online that is my theory.

Why would you have needed a short sell if you had less than 80% LTV? A short sell is when you sell the house for less than the amount you owe the bank and they write-off the difference.

Do you mean 80% LTV of the original value and the short-sell price was some 30% less than what you originally paid for the house?

Yes, our loan amount was originally 80% LTV. We were trying the short sale just trying to get offer of about $150k. Loan amount owed was $181k, appraisal on house had been $232k. It all sucked!! Dealing with BoA. We ended up canceling our checking and savings accounts with BoA b/c of all of the crap the tried pulling during that whole process. Worst company EVER!!!