Home Loan Focus

Senator Kent Conrad found himself in a bit of a pickle this week, as it was revealed that he received favorable treatment from Countrywide when financing a Florida vacation home for over $1 million.

The favorable treatment came in two forms and relates to Barack Obama’s most recent scandal.  James Johnson was working for Barack Obama trying to vet Vice Presidents when it was revealed that Johnson used to be a lobbyist and had received sweet heart loan deals himself after leaving one of those companies.

Johnson apparently told Sen. Conrad to call the CEO of Countrywide, one of the companies at the heart of the subprime loan scandal, which is currently being purchased by Bank of America.  The CEO of Countrywide later instructed loan officers at Countrywide to shave off one point from the points paid on the mortgage. 

The dollar value of this transaction was not that great and the Senator after admitting the perspective of possible impropriety has promised to donate about $10,500 to charity.  It points out though that many lawmakers, who may not always get direct benefits in the form of campaign contributions may be getting a lot of smaller perks on the side and through the backdoor.  If a Senator can save $10k on a home loan, what do they save when they buy a car or shop for medical insurance?  Do they pay anything on credit card rates or hotel stays?

Conrad (D-N.D.) said yesterday that he sees nothing wrong with calling Mozilo, the chief executive of the nation’s largest mortgage lender, Countrywide Financial. And the Senate Budget Committee chairman is adamant that he received no special deals.

But by reaching out to Mozilo, Conrad became another VIP enrolled in the “FOA” — Friends of Angelo — loan program.

“[T]ake off 1 point,” Mozilo instructed a subordinate in a March 17, 2004, e-mail obtained by Condé Nast Portfolio magazine. In another e-mail that April about a Conrad loan, Mozilo wrote: “Make an exception due to the fact that the borrower is a senator.”

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