Lawmakers Took Sweetheart Deals From Countrywide, Inquiry Finds

Before you go, we thought you'd like these...
Before you go close icon
countrywide briberyWASHINGTON -- Congressional investigators said Monday that four House members received VIP discounted loans from the former Countrywide Financial Corp., the lender whose subprime mortgages was largely responsible for the nation's foreclosure crisis.

Rep. Darrell Issa (R-Calif.), chairman of the House Oversight and Government Reform Committee, declined to name the four but wrote the House Ethics Committee that it should investigate the lawmakers.

Issa, in a letter dated Friday and released Monday, said there could be additional lawmakers who received discounted loans.

The most favored customers of Countrywide were known as "Friends of Angelo," who were given discounts in a VIP section under control of the company's CEO Angelo Mozilo. However, Issa said his investigators discovered that other sections of Countrywide also processed VIP loans to public officials and others in position to help the company.

Countrywide was taken over by Bank of America, which has given Issa's committee 100,000 documents in response to subpoenas.

Issa's letter to ethics Chairman Jo Bonner of Alabama and ranking Democrat Linda Sanchez of California said: "Testimony and documents show that Countrywide used the VIP program to build relationships with government officials and others positioned to advance Countrywide's business interests.

"Between January 1996 and June 2008, Countrywide's VIP unit gave discounted loans to employees of the federal government, including the U.S. Congress."

He added, "My staff is also aware of the possibility that loans with VIP benefits were conferred to other members and serviced by a separate loan processing branch."

The ethics committee determines whether House members violated standards of conduct, including a virtual ban on gifts. The committee also can refer cases to the Justice Department for a criminal investigation.

It was previously revealed that Sen. Kent Conrad (D-N.D.) and Chris Dodd, (D-Conn.), while still a senator, had received VIP loans from Countrywide. Both said they did not know they were getting unique deals and Dodd maintained that he received no preferential treatment.

Others named as recipients of the VIP program were James Johnson, former head of Fannie Mae who later stepped down as an adviser to Barack Obama's first presidential campaign, and Franklin Raines, who also headed Fannie Mae. Still other "friends" included retired athletes, a judge, a congressional aide and a newspaper executive.

The Senate's ethics committee looked at the Dodd and Conrad cases and cleared them of wrongdoing, but warned that they should have exercised better judgment.

The committee said the senators should have questioned why they were in the VIP program, because it should have raised red flags.

The Securities and Exchange Commission in October 2010 said that Mozilo would pay a $22.5 million penalty to settle charges that he and two other former Countrywide executives misled investors as the subprime mortgage crisis began. Mozilo also was banned from ever again serving as an officer or director of a publicly traded company.

He also agreed to pay another $45 million to settle other violations for a total settlement of $67.5 million that was to be returned to investors who were harmed.

22 PHOTOS
Pushing the Limit: High-End Homes for 3.5% Down
See Gallery
Lawmakers Took Sweetheart Deals From Countrywide, Inquiry Finds


FHA Conforming Loan Limit: $729,750

Price: $729,000
Beds/Baths: 3/2
Sq. Ft.: 1,250

As you might expect in the country's most expensive city, New York residential real estate has the highest conforming loan limit allowed under law, $729,750. While in the chicer parts of Manhattan that'll get you beans, if you're willing to live a little south of the action, you can snatch up an apartment like this three-bedroom -- for only 3.5 percent down. 

See other homes for sale in New York, N.Y

That's ample space for a New York apartment. And with its gleaming hardwood floors and spic-and-span kitchen, this downtown dwelling strikes us as a pretty good deal. 

See more homes for sale in New York, N.Y


FHA Conforming Loan Limit: $729,750

Price: $729,000
Beds/Baths: 2/2
Sq. Ft.: N/A

The country's second biggest -- and notoriously traffic-plagued -- city is also just about as expensive as it gets. Awesome views of Beverly Hills, Wilshire Blvd. and the mountains beyond are the highlight of this classy apartment

See more homes for sale in Los Angeles, Calif

This apartment's building is set on a 3.5 acre lot that offers a pool, tennis court and fitness center. There's also valet parking and a concierge.  But if you have pets... well, that's OK! The listing boasts of the building's "rare pet friendly environment." 

See more homes for sale in Los Angeles, Calif

 
FHA Conforming Loan Limit: $410,000

Price: $409,000
Beds/Baths: 3/3
Sq. Ft.: 2,000

Chicago's conforming loan limit is substantially lower than those of Los Angeles or New York. At $409,000 this duplex flirts with its FHA-loan ceiling. The apartment's kitchen has a cherry-stained inlay floor with a breakfast bar. 

See more homes for sale in Chicago, Ill

In all, the home has 25 windows. If that's not enough to take in the views, you can venture out to the home's landscaped patio or enclosed balcony, "perfect for morning coffee," asserts the listing

See more homes for sale in Chicago, Ill


FHA Conforming Loan Limit: $420,000

Price: $419,000
Beds/Baths: 1/1
Sq. Ft.: 822

Our country's fifth largest city doesn't have property values as high as you might think. The relatively low median sale price of $305,000 pulls the FHA conforming loan limit down to $420,000. That delivers one bedroom and one bathroom in the case of this contemporary apartment. Is the stunning skyline looming outside the apartment's floor-to-ceiling windows worth that sum? Your call. 

See more homes for sale in Philadelphia, Pa

The hanging lights, gleaming marble countertops and hardwood floors make this space quite the flashy abode. But with only one bedroom, couch-surfing friends will probably have to take the, uh, couch.

See other homes for sale in Philadelphia, Pa


FHA Conforming Loan Limit: $271,050

Price: $270,000
Beds/Baths: 4/2
Sq. Ft.: 2,791

The Loan Star State's real estate comes pretty darn cheap and Houston dirt is no exception. The FHA will only insure your loan up to $271,050. But, considering bang-for-your-buck value in the state, that means the government will sponsor some pretty comfortable digs. This 2,791-square-foot traditional home offers four bedrooms on its well-landscaped plot. If the place strikes a chord with you, be sure to make the open house this weekend. See the listing for details. 

See other homes for sale in Houston, Texas

Think back to that stylish Philly apartment. You know, the one-bedroom that cost in the neighborhood of $400,000? Now consider that this home's living room alone probably comes somewhere close to rivaling that apartment in total size. A reminder of just how much location determines value.

See other homes for sale in Houston, Texas.  


FHA Conforming Loan Limit: $346,250

Price: $345,500
Beds/Baths: 4/3
Sq. Ft.: 2,707

Located on a cul-de-sac, this Phoenix home offers four bedrooms. At $345,500 it's priced close to $150,000 above the median sale price, allowing relatively well-heeled borrowers to take out substantial loans for as low as, you guessed it, 3.5 percent down. 

See more homes for sale in Phoenix, Ariz

Landscaped with native plants and trees and sited near a mountain, this shingle-roofed house boasts generous space, an outdoor patio and even a backyard. 

See more homes for sale in Phoenix, Ariz


FHA Conforming Loan Limit: $332,500

Price: $329,648
Beds/Baths: 4/4
Sq. Ft.: 3,106

While the space may distinguish this home on paper, the home's interior really seems to set it apart. There are stone-arched doorways, exposed-beam ceilings and black hardwood floors. All of it potentially attainable for just 3.5 percent.

See more homes for sale in San Antonio, Texas

The decor of the place gives it an elegant glow. When you move from room to room, you might turn your head now and then. 

See more homes for sale in San Antonio, Texas


Conforming Loan Limit: $271,050

Price: $269,500
Beds/Baths: 4/3
Sq. Ft.: 3,205

Less than $300,000 gets you this gleaming new traditional. The cream-colored interior's open floor plan and high ceilings make its 3,205 square feet feel even airier than it is. 

See more homes for sale in Dallas, Texas

With soaring ceilings, classy upholstery and quite a bit of space this Texas house seems almost like a luxury home. If it is, then it's a luxury home that costs only $84 per square foot. 

See other homes for sale in Dallas, Texas


FHA Conforming Loan Limit: $729,750

Price: $729,000
Beds/Baths: 3/2
Sq. Ft.: 2,149

Now move to $339 per square foot -- that's closer to the norm in San Jose, where the conforming loan limit, like its big brothers New York and Los Angeles, maxes out at the national limit of $729,750. 

See more homes for sale in San Jose, Calif

In addition to this sun porch, the ranch home offers a well-landscaped front yard and backyard with patio on its 1/5-acre plot.

See the more homes for sale in San Jose, Calif.  


FHA Conforming Loan Limit: $387,500

Price: $379,900
Beds/Baths: 4/4
Sq. Ft.: 2,831

Ravaged by the foreclosure crisis, Jacksonville real estate values have plummeted over the last few years, allowing deals like this large single family. Priced at $379,900, the home is just shy of the point where the government steps back and says: "It's 20 percent from here on out." 

See other homes for sale in Jacksonville, Fla

Who knew you could find a glass-enclosed pool just yards from a pond on a property below $400,000. An amenity like this, plus the home's exquisite, varnished interior should be a reminder that today's market is, undoubtedly, a buyer's one. Worried you're not up to financial snuff? In case you didn't hear, you can buy a lot of homes like this one for just 3.5 percent down.

See more homes for sale in Jacksonville, Fla

of
SEE ALL
BACK TO SLIDE
SHOW CAPTION +
HIDE CAPTION

Also see:
SEC Sues Former Fannie Mae and Freddie Mac Execs

Viewpoint: Feeling Guilty About Buying a Foreclosure?
Home Sellers Step In Where Banks Fear to Tread
Read Full Story

Find a New Home

Buy
Rent
Value
Powered by Zillow

From Our Partners