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Countrywide Gave Loans to Gorelick, Mudd

From the Wall Street Journal:

Countrywide Made Home Loans to Gorelick, Mudd

Countrywide Financial Corp., the biggest U.S. mortgage lender, made large, previously undisclosed home loans to two additional executives of Fannie Mae, the government-chartered firm at the center of the U.S. credit crisis.

One of Countrywide’s previously undisclosed customers at Fannie was Jamie Gorelick, an influential Democratic Party figure whose $960,000 mortgage refinancing in 2003 was handled through a program reserved for influential figures and friends of Countrywide’s chief executive at the time, Angelo Mozilo. Ms. Gorelick was Fannie Mae’s vice chairman at the time.

Another Countrywide client was recently ousted Fannie Mae Chief Executive Daniel Mudd, though it isn’t clear whether he received special treatment on two $3 million mortgage refinancings he made when he was the company’s chief operating officer.

In an interview, Ms. Gorelick said she had no knowledge of receiving special treatment. A financial adviser to Mr. Mudd said he received interest rates in line with the prevailing market.

The Fannie loans — including a series of already reported preferential loans to former Fannie chief executives James Johnson and Franklin Raines — underscore the close connections between Countrywide and Fannie Mae and raise potential conflict-of-interest issues.

Countrywide loans on preferential terms to influential figures are the subject of a federal grand jury investigation in Los Angeles, according to people involved in the inquiry. Prosecutors subpoenaed records of many of the so-called “Friends of Angelo” loans in August, lawyers and others familiar with the matter said. ..

The VIP loan program was discontinued by Bank of America when it acquired Countrywide in July, Bank of America spokesman Dan Frahm said. Bank of America, which had no such program of its own, will cooperate with any legal inquiries, Mr Frahm said…

While Countrywide was developing a closer working relationship with Fannie Mae, the company also had created a special path to handle loan applications from influential figures. The “Friends of Angelo” program channeled loan applications from celebrities, public figures and sports stars — often singled out by Mr. Mozilo — to a department where the borrowers received special treatment, sometimes including lower interest rates and a reduction in fees.

“I do not believe there was any special treatment given,” said Ms. Gorelick. A former Countrywide employee, Robert Feinberg, said that Ms. Gorelick’s business was handled through the firm’s VIP lending department in California, and the staff there was aware of her position as a senior Fannie executive.

“I know 100% she went through the VIP department,” Mr Feinberg said, adding that VIP clients such as Ms. Gorelick typically received a one percentage point reduction in their interest rate.

Real estate records show that Ms. Gorelick received nearly the same interest rate that Countrywide provided to then-Fannie chief Franklin Raines, who received a similar loan about 40 days before Ms. Gorelick in the spring of 2003.

Mr. Raines received a rate of 5.125% for the first 10 years on a $982,253 refinancing, Washington, D.C., real-estate records show.

A little over a month later, Ms. Gorelick received a rate of 5% for the first 10 years on a $960,149 refinancing. The transaction was handled by another employee who sat next to him, Mr. Feinberg said. The average market rate for loans of the type obtained by Ms. Gorelick and Mr. Raines fluctuated around 6% at that time, according to data from HSH Associates Inc., potentially saving the two borrowers thousands of dollars over the life of the loans.

Ms. Gorelick acknowledged she may have dealt with the Countrywide employee in California who handled the so-called Friends of Angelo loans, but said she believed she only received expeditious service. “You’d think if somebody was trying to do me a favor, they would tell me they were doing me a favor, and I am unaware of any such treatment,” she said, adding that she was planning to leave her position as vice-chairman of Fannie Mae at that time.

“When I did this transaction, I was decidedly a has-been,” she said. “I had no favor to give.”

The loans to Mr. Mudd are more ambiguous. Because they are so large, it wasn’t possible to locate comparable industry data on prevailing market rates. In addition, a financial adviser to Mr. Mudd said the loans were handled through Countrywide’s normal retail channels, and Mr. Feinberg said he had no knowledge of the loans.

In June 2001, Mr. Mudd refinanced a $3 million home loan at 6.5% for the first five years, adjustable thereafter. In August 2003, he refinanced again and obtained a rate of 4.25% for the first seven years. In both cases, the prevailing market rates for jumbo mortgages were at least a quarter point higher, according to HSH. But an HSH analyst said it’s unclear whether someone who borrowed $3 million would be able to get a better deal…

And, lest we forget, Countrywide actually gave more money to Mr. Obama than they gave to Chris Dodd:

Why is that?

This article was posted by Steve on Thursday, September 25th, 2008. Comments are currently closed.

8 Responses to “Countrywide Gave Loans to Gorelick, Mudd”

  1. crosspatch says:

    It isn’t really fair to show contributions since 1989. I wish someone would show contributions since 2000. That would give a more accurate picture of what has been going on recently and probably put O’Bama at #1

  2. Reality Bytes says:

    I see Senator Dis Clodd keeps poppin’ up in the five.

    And the young steed, Osa – I mean Obama finished show too!

    If they were only as good at managing the government’s budget as they are as enriching their own, we wouldn’t be in this mess.


    YES I’M YELLIN’ – but nobody seems to hear me.

  3. 1sttofight says:

    Apparently Jamie has been licking others besides Gore.

  4. wardmama4 says:

    You know I can’t figure out if these people are stupid – ‘“You’d think if somebody was trying to do me a favor, they would tell me they were doing me a favor, and I am unaware of any such treatment’ – or if they think that We The People are that stupid. And, my Ms Gorelick is one busy little feminist – always seems to be involved with everything. Here I thought it was Bush’s fault for all the problems.

    It is a real joy to have the Internet – so that the words and actions of these people can be exposed as soon as they are uttered/written (or at least as soon as it can be dug up). I do think that it will make a difference – because now everyone is getting shafted by these cheating liars.

    Although if they only got a 1% diff – that really isn’t a real big bennie or maybe that is one of the reasons Countrywide is kaput – they didn’t know how to really wheel and deal.

    -‘Bank of America when it acquired Countrywide in July’- isn’t Bank of Amigos one of those banks who gave loans to illegals (I know that they offered bank accounts to them)?

    And so all of the banks, mortgage companies and those ‘elected’ to control them are all busy little beavers passing money around between each other in the form of VIP loans, donations and earmarks? And how come no one wonders why this sordid house of cards didn’t collapse long before this? Or that this sordid little house of cards isn’t a prime reason our economy is in the can?

    I still say that relying on the very jackels who created this mess to ‘fix’ it makes me want to puke. Let ’em fall – then investigate as to how this was created, then send them to jail. I for one think that the majority of Americans aren’t defaulting on their loans and thus the economy isn’t that close to the edge. Besides all that – where is the common sense not to give money to the very cheaters who caused this situation – like they actually will do the right thing with even more money.

  5. Gila Monster says:

    In an interview, Ms. Gorelick said she had no knowledge of receiving special treatment. A financial adviser to Mr. Mudd said he received interest rates in line with the prevailing market.

    This is known in political circles as “plausible deniability”, a favorite tactic of the DhimmiRats. When caught with your hand in the cookie jar, deny, deny, always deny.
    Charlie Rangel (Dipsh*t – Harlemistan), just pulled this crappola last week.
    “Wha-aa-t? I had no idea I was getting special treatment”.
    Yeah, OK, sure, wait just a minute while I put my turnips back in my truck.

  6. Media_man says:

    Gorelick is amazing. She destroyed our intelligence agencies while heading up Clinton DOJ & then destroyed our financial system as Vice Chair of Fannie Mae (appointed to that plum by Clinton, despite not one iota of financial experience). And made $30 million in the process. Why did she need a loan for anyway? Did she donate the $30 million to the Hillary 2008 campaign?

    Talking about fuc#ing things up from the inside! A shining beacon to America haters the world over.

  7. Reality Bytes says:

    How do you actually pronounce Gorelick?

    Cause to me, it sounds like somethin’ you did with a frog in the ’60’s xcept with a fat blow hard.

  8. JohnMG says:

    Reality Bytes; …….”Cause to me, it sounds like somethin’ you did with a frog in the ’60’s xcept with a fat blow hard……”

    Did you have a particular fat blow-hard in mind? Gore? Lick? (mpf-mpf-mpf)

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