Did Countrywide’s VIP Program
Influence Lawmakers?
More to come on this as a House Oversight Committee has issued Subpoenas into Countrywide’s (Now owned by Bank of America) VIP “Friends of Angelo” program.
Despite multiple warnings that the Housing Market was overheating, influential lawmakers insisted that there were no problems brewing. Meanwhile, Countrywide was serving up exotic loans and pawning them off to Fannie Mae and Freddie Mac. My experience with dealing with these types of Las Vegas short sales has certainly been interesting to say the least.
Related Reading:
Congress looks to bail out Countrywide 06/18/2008
Campaigning in Lancaster, Pa., on March 31, Sen. Barack Obama blamed Countrywide’s CEO for “infecting the economy and helping to create a home foreclosure crisis.” Yet Rep. Barney Frank (D., Mass.) and Mr. Dodd have crafted a bill to provide $300 billion in new taxpayer loan guarantees to Countrywide and others. The bill will allow troubled financial institutions to foist the riskiest mortgages in their portfolios onto the Federal Housing Administration (FHA) — ultimately putting the American taxpayer on the hook for their bad bets.
Senator Chris Dodd and Countrwide 10/10/2008
Former Countrywide Financial loan officer Robert Feinberg says Mr. Dodd knowingly saved thousands of dollars on his refinancing of two properties in 2003 as part of a special program the California mortgage company had for the influential. He also says he has internal company documents that prove Mr. Dodd knew he was getting preferential treatment as a friend of Angelo Mozilo, Countrywide’s then-CEO.
Countrywide has Friends in High Places 06/12/2008
Besides the discounted interest rates reported by the Journal, Countrywide also waived points for Johnson, a former chief executive of government-sponsored mortgage reseller Fannie Mae. In 2003, Countrywide took 1.375 points, about $13,000, off a nearly $1 million loan to refinance Johnson’s Washington home. When he borrowed almost $1.3 million in 2003 that same year to refinance a 4,400-square-foot, Southwestern-style home with four bedrooms and five baths beside the second green of a golf course in Palm Desert, California, Countrywide waived 1.875 points, or about $24,000.
In 2004, Johnson borrowed $3 million to upgrade to a larger estate—a 5,875-square-foot house, with a guesthouse and pool—on the same course. Although the size of the loan exceeded Countrywide’s limit for a second home, Mozilo told an employee to “do the deal.”
Sweetheart Deals from Countrywide 07/27/08
Feinberg also told House investigators that Countrywide counted both of Dodd’s’ homes as primary residences.
“He was allowed to do both of those as owner-occupied, which is not allowed. You can only have one owner-occupied property. You can’t live in two properties at the same time,” he said.
There is certainly an easy argument to be made that the Sub-Prime lending behavior of companies such as Countrywide contributed to high home values due to lax lending standards…. eventually costing Homeowners across the country dearly.
While much of the damage has already been done… we still get to deal with the wave of Option Arms due to reset in the next year or two. Hopefully… buyer’s interest in cheap Las Vegas Real Estate will remain strong to help suck up the coming foreclosure inventory that will be on the way.
Will the subpoenas produce anything we don’t already know?
Paul Francis, CRS
Prudential Americana Group – Realtors
Las Vegas Real Estate – Summerlin Homes
702.592.3058
