The lawmakers named in the report have denied that they knew they were being given preferential treatment, even though they accepted what the company called “VIP” loans Countrywide typically gave only to members of its board of directors and their friends.
House report faults ‘VIP’ treatment.
Countrywide Financial Corp., the former mortgage lending giant whose subprime loans helped spark the country’s foreclosure crisis, bought influence on Capitol Hill by giving discounted loans to lawmakers and key policymakers, according to a nearly four-year House-led investigation that wrapped up this week.
Countrywide, which was acquired by Bank of America after its spectacular crash in 2008, earned political clout by awarding preferential loans to at least a half-dozen lawmakers, including former Senate Finance Committee Chairman Christopher J. Dodd, Connecticut Democrat, and Senate Budget Committee Chairman Kent Conrad, North Dakota Democrat, along with top officials at Fannie Mae, a major purchaser of its subprime mortgages, according to the report by the House Oversight and Government Reform Committee.
Oversight Chairman Darrell E. Issa, California Republican, said that gave the company broad influence with lawmakers who had critical roles in legislation that could have reformed Fannie Mae and Freddie Mac and cracked down on predatory lending.
“Documents and testimony obtained by the committee show the VIP loan program was a tool used by Countrywide to build good will with lawmakers and other individuals positioned to benefit the company,” the committee wrote in a report released Thursday.
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