Countrywide's Politically Connected VIPs

Credit Slips readers will want to take a look at this article in Conde Nast's Portfolio.com. The article describes Countrywide's VIP program, which gave favorable loan terms to politically connected individuals. Beneficiaries of Countrywide's largesse would receive reduced fees on their loans and were allowed a free float down of their interest rate if the market rate went down after the rate was locked in. From the beginning of the article:

Two U.S. senators, two former Cabinet members, and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people.

The New York Times carried a story today about the response of Senator Dodd, one of the senators mentioned in the story.

Hat tip to my ceremonial dagger-wielding colleague for pointing my way to this story.

Comments

[PLW]

"Countywide's [sic] Politically Connected VIPs"

Like they say, all politics is local.

[AMC]

http://uk.reuters.com/article/ousiv/idUKN3044157620080701

Florida sues Countrywide over mortgages
Tue Jul 1, 2008 12:51am BST
By Jim Loney

* * * * * *

Underscoring the aggressiveness of its lending practices -- aimed at maximizing the company's profits regardless of credit risk -- the complaint said Countrywide's own underwriters were "threatened with termination for attempting to verify a borrower's ability to pay, or otherwise impeding loan approval."

It added managers were encouraged to approve subprime loan applications initially denied by underwriters who suspected fraud.