Government of the People?

Tea Party Tribune ^ | 2012-07-06 07:52:26 | mrcurmudgeon

By Mr. Curmudgeon
Are you upside-down on your mortgage? Would you like to refinance at a lower, more affordable rate? It's too bad you're not a congressman or a high-level federal bureaucrat.

A just released report by the House Oversight and Government Reform Committee shows that the now defunct Countrywide Financial Corp., the mortgage underwriter that turned subprime lending into a ticking time bomb, created a "VIP loan unit" to provide "hundreds of loans to current and former Members of Congress, congressional staff, high ranking government officials and executives and employees of Fannie Mae ... VIPs who worked at Fannie Mae enjoyed expedited loan processing and pricing discounts. Countrywide also waived company guidelines for Fannie Mae's senior executives to a greater extent than it did for 'regular' VIPs," said the congressional report.

Back in 2009, a spokesman for the now retired Sen. Christopher Dodd (D-Conn) told the press the Senator and his wife "did not seek or expect any special rates or terms on their loans and they never received any; they were never offered special or sweetheart deals and if anyone had made such an offer, they would have severed that relationship immediately."

However, the report states that Countrywide "identified Dodd internally as a Friend of Angelo as early as 1999."
The Angelo in question is former Countrywide Chief Executive Officer Angelo Mozilo. In a 2010 settlement with the Securities and Exchange Commission, Mozilo paid $67 million in fines and agreed to a lifetime ban from serving as an officer or director of any public company for his mortgage misdeeds ... he served no jail time.
Mozilo has a fortune estimated to be $600 million.
In an internal memo, Mozilo urged a Countrywide official to approve Dodds' loan "right away" and to "give the borrower an employee discount. Please let me know if the buyer (Dodd) is satisfied and if they are ready to close their loan. Stay close to this deal because this is a very important person."
Something tells me that if the Dodds are upside-down on their mortgage, they at least have a manageable monthly payment.
How is it, you ask, that the federal government got to be so cozy with Countrywide? According to the report, "Fannie Mae CEO Jim Johnson and Countrywide CEO Angelo Mozilo reached a strategic agreement giving Fannie Mae exclusive access to many of the loans originated by Countrywide in exchange for a discount on fees Fannie charged when buying loans. The agreement linked the growth and success of Countrywide to Fannie Mae's continued desire to acquire a large volume of loans."
Johnson's purchase of subprime junk, and its securitization and sale as mortgage-backed securities, earned Johnson "$100 million during his time at the company [Fannie Mae]," Bloomberg News reported. Oh, and Johnson also received personal sweetheart mortgage deals.
When the Wall Street Journal inquired about Fannie's "code of conduct," a Fannie spokesman told the newspaper that the agency "prohibits acceptance of substantial gifts, including loans with preferential terms, from an organization seeking to do business without prior review and approval by the company."
Johnson was Democratic presidential contender Walter Mondale's campaign manager in the ill-fated attempt to unseat Ronald Reagan in 1984.
This corruption made a very few very rich - mostly those with close government connections. The economic catastrophe unleashed by Countrywide and others required trillions of dollars in unprecedented bailouts and continues to threaten the global economy.
Now, imagine what new money-making opportunities await the lucky and connected few when Obamacare is fully implemented.