Banking, budget committee chairmen tied to special mortgage deals
Senate Banking Committee Chairman Christopher Dodd reportedly received two mortgages under a special Countrywide Financial Corp. program that gave preferential interest rates to "friends" of the company's chairman.
A spokesman for Dodd, D-Conn., said Friday that the senator did not seek any special treatment.
"The Dodds received a competitive rate on their loans," spokesman Bryan DeAngelis said in a statement. "They did not seek or anticipate any special treatment and they were not aware of any."
The news of the loans comes as Dodd, who ran an unsuccessful campaign for the 2008 Democratic presidential nomination, is playing a high-profile role seeking to ease the nation's housing foreclosure crisis.
Conde Nast Portfolio magazine first reported Dodd's participation in a special program that awarded preferential rates to people considered "friends" of the company's chairman and chief executive, Angelo Mozilo.
Portfolio reported that Countrywide made two loans at special rates to Dodd in 2003. One was a $503,000 loan to refinance a Washington townhouse. The second was for refinancing a loan on a home in East Haddam, Conn.
Countrywide waived three-eighths of a point, or about $2,000, on the townhouse loan, and one-fourth of a point, about $700, on the second, according to internal documents cited by Portfolio. Both loans were for 30 years, with the first five years at a fixed rate.
The magazine said other participants in the company's "V.I.P." program included Sen. Kent Conrad, D-N.D., chairman of the Budget Committee and a member of the Finance Committee, former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke.
Portfolio said that according to company documents and e-mails, the participants got deals that were better than those available to ordinary borrowers
Fannie Mae's former CEO, Jim Johnson, resigned Wednesday as the leader of likely Democratic presidential nominee Barack Obama's search for a running mate after The Wall Street Journal reported that he and another former CEO, Franklin Raines, received low-rate home loans from Countrywide, a large originator of higher-risk subprimes mortgages and a major seller of home loans to Fannie Mae.
Source: AP News