bobbyw24
07-29-2009, 05:21 AM
http://www.washingtontimes.com/news/2009/jul/29/senators-see-countrywide-discounts-as-common-court/
Dodd, Conrad: Mortgage discounts were 'courtesy'
S.A. Miller (Contact)
Two powerful Senate Democrats said Tuesday that they knew they got low mortgage-rate deals in a lender's VIP program but thought the special treatment was a "courtesy" or the same as "frequent flier" discounts.
Both vehemently denied any wrongdoing or ethical lapse in the mortgage deals, which came to light a year ago and triggered investigations by the Senate Select Committee on Ethics and the House Oversight and Government Reform Committee.
"I thought this was like a frequent-flier program," Sen. Kent Conrad, chairman of the Senate Budget Committee, said of the special benefits. "I thought nothing of it."
Sen. Christopher J. Dodd, chairman of the Banking, Housing and Urban Affairs Committee, said an account executive at Countrywide Financial Corp. told him that the VIP status was "nothing more than ... courtesy stuff."
A Countrywide official who handled the loans had said that both senators knew they got preferential treatment in the form of waived fees and points that likely saved them tens of thousands of dollars.
Robert Feinberg, who formerly worked in the mortgage giant's VIP section, said in testimony to congressional investigators last month that the senators were made aware of their status as VIPs or "Friends of Angelo," referring to Countrywide Chief Executive Officer Angelo Mozilo. The CEO played a central role in the subprime-mortgage meltdown, which included the downfall of Countrywide last year.
"It was always instilled in them to let them know their sense of importance of where they were. And that you ... were a friend of Angelo's. You were referred by Angelo. You were approved by Angelo," Mr. Feinberg told Republican investigators for the House oversight committee.
The Washington Times obtained a partial transcript of the deposition.
"I mean, they'd already been there to begin with, so they knew," Mr. Feinberg said. "You know, once you're basically in the VIP department you're in. You know, you're done. You don't even have to really talk to Angelo if you don't want to."
Mr. Mozilo, whose company lost billions of dollars on bad mortgages before it was bought by Bank of America Corp. in July 2008, has been charged with civil fraud and insider trading by the Securities and Exchange Commission. He denies any wrongdoing.
Mr. Dodd refinanced two mortgages with Countrywide in 2003 - his home in Connecticut and a residence in Washington. Mr. Conrad acquired mortgages in 2004 for a vacation home in Delaware and an apartment building in Bismarck in his home state of North Dakota.
Mr. Dodd said he never talked with Mr. Feinberg and found his reported testimony "incomprehensible in some ways."
"The 'Friends of Angelo' thing, we never even heard of it before [last year]," Mr. Dodd said. "I never heard of that organization or any part of it. I never had anything to do with these people. This is a complete falsehood."
His spokesman said Mr. Dodd acknowledged that he was part of the VIP program but that it was different from the "Friends of Angelo" program.
In a memo to reporters, spokesman Bryan DeAngelis said Mr. Dodd's mortgage was comparable to the going rate at the time and that even lower rates were available to the public.
Unlike Mr. Dodd, Mr. Conrad has said he spoke with Mr. Mozilo while pursuing a mortgage.
Records from the time indicate that Mr. Mozilo was trying to curry favor with Mr. Conrad. In a 2004 e-mail obtained by Conde Nast Portfolio magazine, Mr. Mozilo instructed the VIP section to knock one point off a loan to Mr. Conrad "due to the fact that the borrower is a senator."
Mr. Feinberg also said Mr. Conrad got the commercial loan for the eight-unit apartment block, even though Countrywide worked almost exclusively in residential lending, because the senator was an FOA, or "Friend of Angelo."
Mr. Conrad said he acquired the commercial loan, though the firm usually backed mortgages only for apartments with no more than four units, because he had impeccable credit and the transaction was a good deal for Countrywide.
He also said he did not know about his VIP status until after the last mortgage deal was complete and he received a document package with a business card from the VIP section stapled to it.
"I got nothing that was unusual or out of bounds for a loan of that type," he said. "I had 60 percent equity. ... That was a good deal for them. Every one of my loans was a good deal for them. Every one of my loans was a big moneymaker for them. That's the truth."
Mr. Conrad said he had only one conversation with Mr. Feinberg, and it was not about waiving fees or points or any special deals. He said he did not know why Mr. Feinberg said otherwise.
"My conscience is absolutely clear. I have done nothing unethical. Nothing," Mr. Conrad said.
Mr. Conrad has said he is donating $10,500 to a charity to compensate for the reduction in points and is refinancing the apartment building loan.
Dodd, Conrad: Mortgage discounts were 'courtesy'
S.A. Miller (Contact)
Two powerful Senate Democrats said Tuesday that they knew they got low mortgage-rate deals in a lender's VIP program but thought the special treatment was a "courtesy" or the same as "frequent flier" discounts.
Both vehemently denied any wrongdoing or ethical lapse in the mortgage deals, which came to light a year ago and triggered investigations by the Senate Select Committee on Ethics and the House Oversight and Government Reform Committee.
"I thought this was like a frequent-flier program," Sen. Kent Conrad, chairman of the Senate Budget Committee, said of the special benefits. "I thought nothing of it."
Sen. Christopher J. Dodd, chairman of the Banking, Housing and Urban Affairs Committee, said an account executive at Countrywide Financial Corp. told him that the VIP status was "nothing more than ... courtesy stuff."
A Countrywide official who handled the loans had said that both senators knew they got preferential treatment in the form of waived fees and points that likely saved them tens of thousands of dollars.
Robert Feinberg, who formerly worked in the mortgage giant's VIP section, said in testimony to congressional investigators last month that the senators were made aware of their status as VIPs or "Friends of Angelo," referring to Countrywide Chief Executive Officer Angelo Mozilo. The CEO played a central role in the subprime-mortgage meltdown, which included the downfall of Countrywide last year.
"It was always instilled in them to let them know their sense of importance of where they were. And that you ... were a friend of Angelo's. You were referred by Angelo. You were approved by Angelo," Mr. Feinberg told Republican investigators for the House oversight committee.
The Washington Times obtained a partial transcript of the deposition.
"I mean, they'd already been there to begin with, so they knew," Mr. Feinberg said. "You know, once you're basically in the VIP department you're in. You know, you're done. You don't even have to really talk to Angelo if you don't want to."
Mr. Mozilo, whose company lost billions of dollars on bad mortgages before it was bought by Bank of America Corp. in July 2008, has been charged with civil fraud and insider trading by the Securities and Exchange Commission. He denies any wrongdoing.
Mr. Dodd refinanced two mortgages with Countrywide in 2003 - his home in Connecticut and a residence in Washington. Mr. Conrad acquired mortgages in 2004 for a vacation home in Delaware and an apartment building in Bismarck in his home state of North Dakota.
Mr. Dodd said he never talked with Mr. Feinberg and found his reported testimony "incomprehensible in some ways."
"The 'Friends of Angelo' thing, we never even heard of it before [last year]," Mr. Dodd said. "I never heard of that organization or any part of it. I never had anything to do with these people. This is a complete falsehood."
His spokesman said Mr. Dodd acknowledged that he was part of the VIP program but that it was different from the "Friends of Angelo" program.
In a memo to reporters, spokesman Bryan DeAngelis said Mr. Dodd's mortgage was comparable to the going rate at the time and that even lower rates were available to the public.
Unlike Mr. Dodd, Mr. Conrad has said he spoke with Mr. Mozilo while pursuing a mortgage.
Records from the time indicate that Mr. Mozilo was trying to curry favor with Mr. Conrad. In a 2004 e-mail obtained by Conde Nast Portfolio magazine, Mr. Mozilo instructed the VIP section to knock one point off a loan to Mr. Conrad "due to the fact that the borrower is a senator."
Mr. Feinberg also said Mr. Conrad got the commercial loan for the eight-unit apartment block, even though Countrywide worked almost exclusively in residential lending, because the senator was an FOA, or "Friend of Angelo."
Mr. Conrad said he acquired the commercial loan, though the firm usually backed mortgages only for apartments with no more than four units, because he had impeccable credit and the transaction was a good deal for Countrywide.
He also said he did not know about his VIP status until after the last mortgage deal was complete and he received a document package with a business card from the VIP section stapled to it.
"I got nothing that was unusual or out of bounds for a loan of that type," he said. "I had 60 percent equity. ... That was a good deal for them. Every one of my loans was a good deal for them. Every one of my loans was a big moneymaker for them. That's the truth."
Mr. Conrad said he had only one conversation with Mr. Feinberg, and it was not about waiving fees or points or any special deals. He said he did not know why Mr. Feinberg said otherwise.
"My conscience is absolutely clear. I have done nothing unethical. Nothing," Mr. Conrad said.
Mr. Conrad has said he is donating $10,500 to a charity to compensate for the reduction in points and is refinancing the apartment building loan.