FRIENDS OF ANGELO

FRIENDS OF ANGELO, June 24, 2008
Much has been made about the current financial crisis and its alleged instigator, Countrywide Financial. Countrywide’s Chief Executive Officer, Angelo Mozilo had a program, “Friends of Angelo” where important individuals received better financial terms on their loans. Two participants in this “FOA” program are Senator Chris Dodd and Senator Kent Conrad. Senator Dodd is the Chairman of the Senate Committee on Banking, Housing and Urban Affairs while Senator Conrad is the Chairman of the Senate Budget Committee and is also a member of the Finance Committee.
Not much has been made of the fact that two prominent members of the Senate have received special interest rates on their mortgages. The only reason they got these special rates were that they were part of the “Friends of Angelo” program. One would think that since they received a special deal, that they would have notified the Senate Ethics Committee of these sweetheart deals. These deals reduced the amount of fees that they paid by thousands of dollars.
Senator Dodd has acknowledged that he was part of the program, but did not know what his participation in such a program basically meant. According to the Washington Post, “ Dodd borrowed $506,000 at 4.25 percent to refinance a Capitol Hill townhouse, originally purchased in 1999, and $275,042 at 4.5 percent to refinance a home in East Haddam, Conn. Rather than requiring him to pay the full amount to obtain the reduced mortgage rates, as other customers must, Countrywide waived three-eighths of a point, or about $2,000, on the first loan and a quarter-point, or $700, on the second.”
As the Chairman of the Senate Committee dealing with housing issues, one would have to be a complete moron to believe that Senator Dodd believed that he cold get mortgages at 4.25 and 4.5 percent. If he is to believed, one would also have to assume that as Chairman, he has no idea what he is doing or what he is supposed to be overseeing. Mortgage rates were not 4.25 percent, but he was able to negotiate such a deal? He must be a hell of a negotiator.
Senator Conrad also benefited from the program. According to the same Washington Post article, “Conrad spoke to Mozilo about his mortgage in 2002, but the deals under scrutiny were not finalized until 2004. Mozilo ordered one point waived on a loan for a more than $1 million vacation home in Bethany Beach, Del., providing a $10,700 benefit to Conrad. Conrad also received financing in 2004 for an eight-unit apartment building in North Dakota from Countrywide, in apparent contradiction of the company's rules prohibiting mortgages for any dwelling with more than four units, according to Conrad's staff. Mozilo ordered subordinates to approve the apartment-building loan, according to an internal e-mail obtained by Portfolio, because "the borrower is a senator."
Due to his position, Senator Conrad reduced his fee by one point, which meant he saved $10,700. IS this a gift from Countrywide? I would imagine it was, but the Senator did not notify the Senate Ethics Committee of such a gift. Also, since Countrywide gave him a mortgage on a property they would not typically finance, one must assume that due to his role as a Senator, he got a special deal from Countrywide. This type of deal was not available to those of us, normal citizens who are trying to find affordable mortgages to purchase our residences.
Both Senators claim that they did nothing wrong and the press seems to buying this response. However, if either one of these Senators was a Republican Chairman, one could safely assume that the Washington Post and New York Times would be demanding their resignations. Either the two Senators are not telling us the truth, or they are about the dumbest people on the face of the earth. They would have to be oblivious to everything around them if they did not know what their mortgage payments were or what the interest rate was. I get a monthly statement from my mortgage company that states the interest rate as well as the breakdown of where each of my payments is going – whether towards interest, principal balance, or my escrow account to payoff my taxes. Now maybe both of their wives handle their finances, but you would have to suspend all belief to believe that neither of them knew that they got such a deal.

“Citizens for Responsibility and Ethics in Washington (CREW), a liberal watchdog group, filed a complaint Friday with the Senate ethics committee requesting an investigation of the Countrywide loans. It cited Senate rules that allow for "loans from banks and other financial institutions on terms generally available to the public.’” The Chairman of the Ethics Committee, Senator Barbara Boxer stated that a complaint had been filed and the Committee was looking into the situation. Looking into the situation? What more do they want? A federal conviction or something on that order before they will look into the possible wrong doing by one of their own? We all know that the Senate is the most exclusive club in America and that they all do whatever they can to protect each other, but this is ridiculous.

Why haven’t Senate Republicans been demanding an investigation? One local news station stated that the Republicans were worried where the investigation would go and that some of their members might also have benefited from such deals. Is this not enough evidence that those who are elected to represent us in Washington are completely out of touch with reality and should all be replaced with more responsive and ethical leaders?