Countrywide Offered Discounted Loans to Members, Report Says

Posted July 5, 2012 at 10:11am

Defunct mortgage giant Countrywide Financial Corp. offered special discounts on home loans to hundreds of Washington officials, including key lawmakers, which it used to help influence Congress and the White House, according to a report from House Oversight and Government Reform Chairman Darrell Issa (R-Calif.).

The report clears Rep. Pete Sessions (R-Texas), the National Republican Congressional Committee chairman, but said several other sitting House Members accepted loans with special discounts.

“The VIP unit processed loans for Congressmen Howard ‘Buck’ McKeon [R-Calif.]; Pete Sessions; Edolphus Towns [D-N.Y.]; and Elton Gallegly [R-Calif.],” the report said. But Sessions specifically asked not to receive any discount.

Towns is the former ranking member of Issa’s committee.

The vast majority of the special loans went to employees at Fannie Mae, which was then deeply involved in business dealings with Countrywide and was lobbying against legislation that would restrict its ability to acquire and hold subprime loans.

McKeon has said he did not know he was receiving a discounted loan. But the report said officials who participated in the VIP program would have had ample evidence they were receiving a special deal.

“The documents produced by the Bank show that VIP borrowers received paperwork from Countrywide that clearly identified the VIP unit as the point of contact. The conspicuous markings on documents provided to VIP borrowers made it clear that Countrywide’s VIP unit was processing their loans. It was also the practice of staff in the VIP unit to identify themselves as such on the phone,” the report said.