Thread: Countrywide gave special treatment to US lawmakers

Countrywide gave special treatment to US lawmakers
Sat Jun 14, 4:05 PM ET

WASHINGTON (AFP) - Countrywide Financial, the largest mortgage lender at the center of the US housing crisis, regularly gave loans on favorable terms to prominent lawmakers and former cabinet members, according to US media.

The preferential treatment for senators including Democrat Chris Dodd, chairman of the Senate Banking Committee and a recent presidential candidate, was approved by Angelo Mozilo, chief executive of Countrywide Financial, the Washington Post reported on Saturday.

CondeNast Portfolio magazine first broke the story on Wednesday, saying the recipients of the favorable terms were known as "Friends of Angelo" in internal company documents and e-mails.

"Make an exception due to the fact that the borrower is a senator," Mozilo wrote in one e-mail obtained by the magazine, referring to a loan for Kent Conrad, a Democratic lawmaker from North Dakota.

The other officials who allegedly received special attention from Mozilo included President George W. Bush's former housing secretary, Alphonso Jackson, and two senior figures from former president Bill Clinton's administration -- former United Nations ambassador Richard Holbrooke and former Health and Human Services secretary Donna Shalala, the magazine wrote.

Mozilo made no effort to conceal his special favors, Guy Cecala, publisher of Inside Mortgage Finance Publications, told the Washington Post. "It was something he handed out like party favors. He was fairly forthcoming with it," Cecala said. "As long as I can remember, he was offering that."

Dodd and Conrad, the chairman of the Senate Budget Committee, denied they had sought out or received any special deals. "I was never told I was given preferential treatment. I didn't ask for it, didn't seek it, and as far as I know, I didn't get it," Conrad was quoted as saying by the Post.

Dodd, who has been mentioned as a possible vice presidential pick, said: "As a United States senator, I would never ask or expect to be treated differently than anyone else refinancing their home."

The reports come shortly after former Fannie Mae chief executive Jim Johnson was forced to resign as an adviser to Democratic presidential candidate Barack Obama following a report in the Wall Street Journal alleging he received favorable treatment on loans from Countrywide.

http://news.yahoo.com/s/afp/20080614...YZVoRWD8qs0NUE


Meanwhile...


Renters, soldiers feeling foreclosure pain
By Patrick Rucker
Sun Jun 15, 8:50 PM ET

LAS VEGAS (Reuters) - The day before her husband was deployed to the Middle East by the U.S. Air Force, Marketa Johnson got word that her family would be evicted from their rented home. It did not matter that the Johnsons had never missed a rent payment and had signed a two-year lease. The property owner was facing foreclosure and so Johnson simply packed her bags.

But last month, when she got another eviction notice and was ordered to leave her new home, she decided to fight. "We military are good tenants," said Johnson whose husband, Derrick, is an Air Force pilot. "We always take care of the property. We were never late, never. I don't see a reason that we should not stay there."

The U.S. housing crisis that has caused a spike in foreclosures has meant not only anguish for delinquent mortgage borrowers but heartache for renters in good standing. Almost one in five recent foreclosures have been against mortgage borrowers who did not live in the home, according to a snapshot from the Mortgage Bankers Association.

The true rate is probably even higher, the trade group says, in part because many investors who bought homes during the recent boom wanted the funding advantages of being classed as owner-occupied.

RENTERS FACE SWIFT EVICTION

Depending on the state and how soon the tenant is notified of foreclosure proceedings, renters may have anywhere from a couple of months to less than a week to leave a home. "If the tenant first learns about foreclosure when the sheriff places the writ of possession on the door, they might only have a few days," said Jeffrey Hearne, an attorney with Legal Services of Greater Miami.

While the types of cases vary, lawyers who help troubled renters say there is no doubt that the problem is worsening. One in four housing-related calls to Legal Services of Greater Miami's renter advocacy line have been from distressed renters in recent weeks, while the group rarely heard such complaints last year, Hearne said.

Nevada Legal Services, which is giving Johnson legal advice, has also seen a rise in calls and estimates that 5,000 renting families have been displaced in the past 18 months.

In the Las Vegas area, many of those families have military ties and are already facing many other challenges. "I know that this has been an issue for command because it is so disruptive to our mission," said Michael Estrada, a civilian spokesman for Nellis Air Force Base in Nevada, where more than three-quarters of the 8,000 airmen live off-base.

It is not uncommon for military families to deal with an eviction while a soldier is on deployment, Estrada said. "This is often a stress for the caregiver in a family," he said.

Tenants rights groups say they are frustrated that mortgage servicers seem so eager to put out paying tenants once the property falls into their hands. "Lenders are just hard-wired not to deal with a tenant," said Anna Marie Johnson, the director of Nevada Legal Services. "We did speak with one bank lawyer who said the liability is so extreme that it's worth it to just let the house stay empty."

In a now-common offer dubbed "cash for keys," many mortgage servicers will pay tenants to abandon properties in an orderly way.

Johnson has not received such an offer and does not know where her fight will end but she hopes to remain in the house until the current lease ends in 12 months. "People have asked 'What do you want?"' she said, sitting with a notebook bulging with documents she has collected to support her case. "We want to be able to stay."

http://news.yahoo.com/s/nm/20080616/...81vLkIPGDZa7gF

I knew the people that rented the house next to us. It got forclosed on. Only way she found out was the sherriff came to serve papers. We knew something was going on though. The owner one night, came a week before rent was due, at 11 o'clock at night, screaming he wanted his rent money. I knew the owner too. You don't come screaming at that time of night at someones front door. Turns out he was collecting rent for months when he no longer had rights to the house.
Well the house was sold. And wouldn't you know it. One of the biggest slum lords in town bought it. He is now trying to sell it for double what he paid. ROFLMAO!!!! I live in O"HI"O and that house has no furnace!
Anyone interested in that house, I have been stopping and telling them I will sell them my house for the same price, and my house has a one bedroom rental attached. I've had the same tennant for 10 years now. That rental pays our utilities, taxes and insurance. And we only charge $300/mth and all utilities are included.
Any one interested let me know! I would love to move back to Texas.