A new investigative report from the House Oversight Committee says Countrywide Home Loans doled out almost 18,000 “Friends of Angelo” loans over a 12-year period but the price breaks—on average—were not very significant.
Those receiving “FoA” loans included politicians, executives at Fannie Mae and Freddie Mac, and even regulators at federal agencies.
On average, applicants received a standard discount of 0.5 points on their mortgage and a waiver from what the committee calls “junk fees” that normally might cost upwards of $400.
The committee, chaired by Rep. Darrell Issa, R-Calif., has been investigating the FoA program for three years. The program was named after Countrywide founder, chairman and CEO Angelo Mozilo, who left Countrywide in the summer of 2008 when it was purchased by Bank of America.
“The committee’s investigation found Countrywide lobbyists and CEO Angelo Mozilo used discounted loans as a tool to ingratiate itself with policymakers in an effort to benefit the company’s business interests,” said Issa in a statement.
“A former lobbyist for Countrywide testified that members of Congress, staff and other government officials were directed to the company’s VIP program as part of an effort to create a favorable impression of the company on Capitol Hill. This preferential treatment—that varied depending on the influence of the borrower—was not routinely offered to the public.”
The report repeats the names of many high-profile FoA borrowers, including politicians Chris Dodd, Kent Conrad and one-time HUD secretaries Alphonso Jackson and Henry Cisneros.
Issa’s investigators found that applicants, in some cases, were “reluctant or unwilling to provide basic information such as salary and employment” history leaving Countrywide LOs to “fill in blanks” via “courtesy calls.”
