The Housing Chronicles Blog: The Countrywide VIP List: Senators, Regulators, Celebrities & CEOs

Wednesday, August 6, 2008

The Countrywide VIP List: Senators, Regulators, Celebrities & CEOs

It seems Angelo Mozilo never met a person of influence he didn't want to make into a "Friend of Angelo's," who would qualify for rate reductions and elimination self-admitted 'garbage fees' in exchange for real and perceived favors in the past and in the future. So how can I get a refund for the fees I paid when I got a loan through Countrywide?? According to a cover story in Portfolio magazine (sort of a competitor to Fortune), perhaps running for the Senate would be a good start, and if this story doesn't get you angry, then apparently nothing will:

Through a program that provided loans on favorable terms to V.I.P. 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 vigor with which Countrywide chased V.I.P.’s was matched only by the aggressiveness with which it marketed loans to risky borrowers. In the past year, Countrywide morphed into the Chernobyl of the mortgage meltdown, with the F.B.I. investigating its lending practices, its stock plummeting, and Bank of America buying the company at a fire-sale price. Much as the high­fliers of the internet bubble crashed overnight, the company that symbolized the housing market’s boom has quickly come to define its collapse.
In June, Condé Nast Portfolio disclosed the names of five V.I.P.-loan recipients: Senators Christopher Dodd and Kent Conrad, former cabinet members Alphonso Jackson and Donna Shalala, and former United Nations Ambassador Richard Holbrooke. The Wall Street Journal reported that James Johnson and Franklin Raines, both former C.E.O.’s of government-sponsored mortgage buyer Fannie Mae, received favorable rates.

But many other V.I.P. borrowers haven’t been named until now, including former Countrywide director Henry Cisneros, who served as secretary of Housing and Urban Development in the Clinton administration; former White House staffer Paul Begala, now a commentator on CNN; and Postmaster General John Potter.

Countrywide also offered special discounts to Congressional staffers involved in housing issues.
Current or prospective business partners who received special treatment include former C.E.O.’s William Esrey of Sprint, which teamed up with Countrywide to provide property information to homebuyers on their cell phones, and Bruce Karatz of KB Home, a leading homebuilder that refers customers to Countrywide for mortgages.

The biggest subset of V.I.P.’s included Mozilo’s network of friends, business associates, and people he wanted to ingratiate himself and his company with; they were known in company emails and memos by the initials F.O.A.—Friends of Angelo...

Read the full story in its entirety -- it's quite illuminating.

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