Tags: gop | countrywide | mortgages

GOP: Probe Countrywide's Sweetheart Mortgages

By Phil Brennan   |   Wednesday, 13 Aug 2008 11:11 AM

House Republicans want the House Ethics Committee to investigate whether House members and aides received sweetheart deals on their home mortgages.

According to The Hill, Reps. Darrell Issa, R-Calif., and Mark Souder, R-Ind., told the Committee in a letter that the “serious and broad allegation that members of Congress, congressional staff, and other officials were given preferential treatment . . . needs to be investigated.”

At issue was Countrywide's policy of giving cut-rate mortgages to VIPs including at least two members of Congress, Connecticut Democratic Sen. Chris Dodd and his Democratic colleague North Dakota Sen. Kent Conrad, both of whom were named in a series of detailed investigative stories in Portfolio magazine.

According to Portfolio, "Through a program that provided loans on favorable terms to VIP borrowers, the nation’s largest mortgage lender curried favor with politicians, government officials, and business partners who were in a position to influence policy, profits, or public opinion. While some may not have been fully aware of the special terms, many took the bait."

The magazine revealed that Dodd, chairman of the Senate Banking Committee and the architect of the housing reform bill and Conrad were given countrywide mortgages on sweetheart terms that saved them considerable sums not available to ordinary Countrywide customers.

Portfolio reported that House staff and former federal officials also received preferential treatment on their mortgages, and the two Republicans want to know which House members or aides got similar deals, and last month called on House Oversight and Government Reform Committee Chairman Henry Waxman, D-Calif., to probe the matter.

Waxman responded by telling the two Republicans they should take their request to the House Ethics Committee “because the issues you raise would require the [Oversight and Government Reform] Committee to investigate the conduct of members . . .”

Issa told The Hill, “I intend to push hard,” adding that he will ask House Speaker Nancy Pelosi, D-Calif., to assist in efforts to investigate whether oversight in Congress and the administration “was softened by VIP discounts that amount to bribery.”

He added that it was critical to find out how the “growing disaster” that led to the bailout of Freddie Mac and Fannie Mae was missed by the administration, claiming the amount promised to the mortgage giants could end up being trillions of taxpayer dollars.

The Hill reported that Issa and Souder wrote to Waxman Tuesday that they are following up with the ethics panel, even though they believe that his Committee is the appropriate panel to probe the matter. The Oversight Committee told The Hill it received the letter but offered no further comment. The ethics committee also declined to comment.

In a June letter to Waxman, The Hill reported that Issa and Souder noted that Congress was debating a massive housing reform bill: “Given the fact that Congress is actively considering bailing out Fannie Mae, Freddie Mac, Countrywide, and other lenders it is essential that Congress investigate to determine the extent that public officials and staff have been compromised by improper gifts.”

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