Two influential US senators got “VIP” loans from a leading subprime mortgage lender that saved them tens of thousands of dollars, it was reported last night.
The Democratic pols, Chris Dodd of Connecticut and Kent Conrad of North Dakota, both received the highly favorable loans under the designation “Friend of Angelo,” a reference to embattled Countrywide head Angelo Mozilo, Condé Nast Portfolio reported.
Dodd is chairman of the Senate Banking Committee, while Conrad is chairman of the Budget Committee and a member of the Finance Committee. The two senators refinanced properties through the VIP program in 2003 and 2004, the report said.
Others who received “FOA” loans include Alphonso Jackson, the secretary of Housing and Urban Development under President Bush who resigned in April, and Donna Shalala, who was secretary of Health and Human Services in the Clinton administration.
The report came one day after Democratic heavyweight Jim Johnson stepped down as chief of Barack Obama’s vice-presidential search committee after revelations he’d gotten Countrywide loans at very favorable rates because of Mozilo.
Citing company documents and e-mails, the report says the FOAs paid lower fees, and if rates fell while a loan was pending, the VIPs would get a free “float-down” while regular customers had to pay a surcharge.
Dodd reportedly received two loans through the program in 2003 – $506,000 to refinance his Washington town house, and $275,042 to refinance a home in Connecticut. The more favorable terms saved him about $70,000, the report says.
The company has also contributed $21,000 to Dodd’s campaigns since 1997, but the senator proposed a bill last year that was averse to the company’s lending practices, the report noted.
Conrad borrowed $1 million to refinance his vacation home, and saved at least $10,000.
Conrad said he never met Mozilo, and “I never asked for, expected or was aware of any special treatment.” Dodd had no immediate comment, but his wife told Portfolio two other lenders they’d checked with offered comparable interest rates.
Jackson took out loans totaling $653,331 in 2003 and 2004 while he was deputy HUD secretary, with the latter loan coming through a week before he was named secretary.