Congress’s Investigation Into Alleged Illegal Mortgages

Posted In: Congress, Mortgages, Politicians, U.S. Government

Anyone NOT see this coming? Elizabeth MacDonald from FOX Business wrote this morning in her blog:

After being stonewalled for nearly a month, Rep. Darrell Issa (R-CA) and Rep. Mark Souder (R-IN) have sent an official request for an Ethics Committee investigation into “disturbing allegations,” first reported in Conde Nast Portfolio, that Countrywide Financial gave illegal mortgages prohibited by House rules to members of Congress, congressional staff and other officials (see blog “Where are the Ethics Hearings into Countrywide’s VIP Loans?”)

Sweetheart mortgages given by Countrywide Financial, the nation’s biggest mortgage lender, to elected officials and government bureaucrats seem tailor-made for an ethics inquiry by Congress, especially as the country is seeing a rising tide of voter anger in this presidential election year due to the massive $300 bn bailout of the housing industry at taxpayers’ expense.

Specifically, Countrywide’s sweetheart mortgages were called VIP loans, in which lawmakers and government employees allegedly received lower interest rates and point shaves on their mortgages. Countrywide’s controversial VIP mortgages were given under the “Friends of Angelo” program, nicknamed after Countrywide chief executive Angelo Mozilo, a story that first broke in Portfolio Magazine.

The mortgages were allegedly given to Congressional members and staffers championing this record bailout, a bailout that fast approaches the taxpayer cost of the S&L crisis in the late ‘80s and early ‘90s.

But Rep. Darrell Issa (R-Calif.) and Rep. Mark Souder (R-Ind.) say Rep. Henry Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, is ignoring their demands for an investigation into cheap, VIP mortgages allegedly given by Countrywide Financial to House staff members and elected officials.

MacDonald noted:

Countrywide allegedly gave cheap, sweetheart mortgages to Sen. Kent Conrad (D-ND) and Sen. Christopher Dodd (D-Conn.), chairman of the Senate Banking committee who reportedly saved $75,000 on his inside deals from Countrywide.