The former Countrywide Financial Corp. gave preferential loans to more than three dozen employees of Fannie Mae while the two giant housing enterprises were locked in an expanding, multi-billion dollar business relationship in subprime mortgages, documents show.

Discounted mortgages written by Countrywide, once the nation's largest subprime lender, were granted to a far wider group of Fannie employees than the four top executives whose preferential loans were previously disclosed, according to Countrywide documents provided to Congress under a subpoena.

Countrywide's VIP section, established to handle preferential mortgages for favored customers, serviced a variety of Fannie employees who handled Fannie's business of buying mortgages and selling mortgage-backed bonds. Recipients included an account manager, a lobbyist, underwriters, lawyers, a home loan manager, a sales executive and a credit risk manager.

The documents reveal that when Countrywide was depending on government-sponsored firms to finance billions of dollars worth of subprime loans that touched off the housing meltdown, it was giving employees at the largest of those companies — Fannie Mae — sweetheart deals on their own home loans.

Countrywide was acquired by Bank of America in mid-2008. The documents were turned over to the House Oversight and Government Reform Committee by Bank of America. The government seized control of Fannie Mae and its smaller government-sponsored competitor, Freddie Mac, in September 2008. So far, the takeover has cost taxpayers $145 billion and is likely to be the most expensive of all the financial bailouts.

Rep. Darrell Issa of California, the House committee's senior Republican, said Countrywide's preferential VIP mortgages for Fannie employees spiked in 1998, when Countrywide was negotiating volume discounts on the subprime mortgages it was selling, and again from 2001 to 2003, at the edge of a housing and mortgage boom.

In a letter to the Federal Housing Finance Agency — the government agency that regulates Fannie Mae and a smaller competitor, Freddie Mac — Issa said Countrywide's 153 loans to 37 Fannie employees were part of a attempt to vastly expand business with Fannie to the detriment of Freddie. Though government-chartered institutions, both Fannie and Freddie were owned by private stockholders.

"In 1999, Countrywide reached an exclusive agreement to sell Fannie Mae billions of dollars in mortgages at a discounted rate," Issa said in the letter.

Records compiled by a trade publication, Inside Mortgage Finance, show Fannie rapidly expanding its purchases of Countrywide mortgages and a decline in sales of them to Freddie.

In 1998, Countrywide sold $25.6 billion in loans to Fannie and $17.7 billion to Freddie. By 1999, the figures were $30.8 billion to $11.2 billion in Fannie's favor. By 2004, the spread was much wider: $67.7 billion in Countrywide mortgages sold to Fannie Mae compared with $2.9 billion in mortgages sold to Freddie Mac.

Also among the subpoenaed documents was a May 2001 "confidential and proprietary" e-mail from a Countrywide official to other company officials discussing the sensitivity of the discounted VIP mortgage loan to Daniel Mudd, then Fannie's vice chairman and chief operating officer. He later became chief executive.

"Make sure the branch and RVP understand the sensitivity of this deal," the e-mail said. "We already are taking a loss, it would be horrible to add a service complaint on top and lose any benefit we generate." The meaning of RVP is unclear.

It previously was revealed that Mudd received preferential treatment along with former CEO Franklin Raines, former vice chairman Jamie Gorelick and ex-CEO Jim Johnson.

Fannie spokesman Brian Faith said he had no comment on Issa's letter or the documents.

He pointed to an earlier statement when he said: "The company's conflict-of-interest policy requires the disclosure of potential conflicts of interest and prohibits acceptance of substantial gifts, including loans with preferential terms, from an organization seeking to do business with the company without prior review and approval by the company."

Doug Duvall, spokesman for Freddie Mac, said, "We have a code of conduct that says employees cannot solicit or accept discount prices or more favorable loan terms on the basis of their being Freddie Mac employees."