No, that’s not the score of a particularly one-sided intramural basketball game.
It’s a tally of Countrywide loans extended on preferential terms to workers at the government-backed mortgage companies.
The count was released Tuesday by Rep. Darrell Issa, who sent a letter to Fannie and Freddie’s federal regulator requesting that the loans be investigated.
This is not Issa’s first bite at the rotten Countrywide apple. The California Republican has been investigating the big subprime lender’s efforts to cash in on the mortgage boom by pulling strings in Congress.
He was behind the release of last year’s “Friends of Angelo” report, which rehashed the favorable terms longtime Countrywide chief Angelo Mozilo (right) handed to pals such as Senate Banking Committee Chairman Chris Dodd and former Fannie Mae chief Frank Raines.
Countrywide was acquired in distress during the financial crisis by Bank of America . Mozilo and other top Countrywide execs were sued by the Securities and Exchange Commission last year for their alleged failure to fully share with investors the risks of their embrace of low-quality subprime loans.
The Friends of Angelo report was mostly ignored, however, because it came nearly a year after the loans were first reported, and because of the authors’ occasional penchant for breathless oversell.
“When Congress considered reform of the GSEs, the company hoped their ‘Friends of Angelo’ would respond,” the report intoned. “Fannie and Freddie reform legislation was never passed, let alone voted on by Congress.”
It would be tough for legislation that was never voted on by Congress to pass, but let’s not quibble. More recently, Issa found that Countrywide issued 30 loans to senators or their staffers.
The Friends of Angelo report notes a 1999 agreement between Countrywide and Fannie that gave Fannie exclusive access to Countrywide loans in exchange for lower fees.
Tuesday’s letter builds on this by claiming that the incidence of so-called VIP loans at favorable terms spiked when Fannie and Countrywide were talking about a deal.
This prompts Issa, in a letter to the top lawyer at the government agency that regulates Fannie and Freddie, to urge that the regulator investigate the loans.
“I am also interested in whether you believe this matter should be referred to the U.S. Department of Justice,” Issa writes. The regulator, the Federal Housing Finance Agency, didn’t comment.
