Wall Street Journal calls for investigation of 'friends of Angelo' loans

The Wall Street Journal -- correctly, it says here -- today is pushing Congress to investigate the "friends of Angelo" loan program, under which members of Congress including Sen. Chris Dodd (D-Conn.), at right, received special treatment and special loans from Countrywide Financial.

This is the same issue that brought down Obama campaign adviser Jim Johnson, another recipient of personal attention from Angelo Mozilo and Countrywide.

The Journal's editorial page this morning: "What did Countrywide CEO Angelo Mozilo receive –- or think he would receive –- in return for the friendly loans to politicians? And what did Mr. Mozilo get –- or think he would get –- in return for sweetheart loans to Fannie Mae CEOs Jim Johnson and Franklin Raines?" (Link credit: LA Biz Observed)

The Journal brushes off the so-called "ostrich defense" employed by another Countrywide borrower in the Senate, Kent Conrad (D-N.D.), who oddly told reporters he had never met Mozilo -- even though he had talked to Mozilo on the phone about a loan. "For what other reason, besides preferential treatment, would one call the CEO of the mortgage company? Does Mr. Conrad call August Busch IV when he wants to buy a six-pack?"

Also offended by Conrad's awkward dance of denial is one of my favorite real estate bloggers, Diana Olick of CNBC: "So am I to believe that these high-ranking senators and a former Fannie CEO didn’t read their loan documents to figure out that they were getting a special deal?? Did they not know enough about how mortgages work to figure it out? And why would Mozilo give these folks a special deal if he didn’t expect them to at least know about it??

"The senators are claiming they had no idea. Come on. I realize I’m supposed to accept that all those subprime borrowers didn’t understand their loans, but to accept that these well-educated leaders of our government didn’t -- well that insults my intelligence, and every borrower’s out there."

Your thoughts? Comments? E-mail story tips to peterviles@latimes.com.
Photo: AFP/Getty Images

Comments

[William Jones]

Oh c'mon, surely you don't expect members of the United States Senate (the most exclusive club in the world, after all) to get the same regular old mortgages that the commoners get, do you? That would be unthinkable! Rank has its privileges!

[Victor the Predictor]

I predict that we'll find out they really didn't get much of a deal at all. Firstly, it might turn out to be just an ego thing for them. "I'm important because I call up the CEO of the country's largest lender and badda bing badda boom, he takes care of me pesonally."

They could have probably gotten better deals if they worked with a good ethical mortgage borker [sic]. So Angelo really doesn't have to deliver much of anything, but in return he gets a few senators and fannie people in his "debt." So they don't get anything of real value, even though they think they do.

Anyone know what happened to their loans down the stream? Were they kept by countrywide? Were there escrow accounts that mysteriously disappeared? One wonders where the checks are coming from to pay the monthly fees as well. Gotta subpoena that stuff of course.

[MyLessThanPrimeBeef]

Does Mr. Conrad call August Busch IV when he wants to buy a six-pack?"

-------------

Ha Ha Ha!

Would you call Mr. Westlund if you just want to look?

That's right, I wake up this morning (a few hours ago, I don't want to give a wrong impression), and the whold world has gone subprime! We have subprime citizens, subprime politicians, subprime financiers, subprime athletes and subprime celebrities.

[david yen]

At the end of the movie 'Maxed Out", there is an interview with an attorney who alleges that the major credit bureaus provide special treatment for very rich people and politicians. Instead of handling their accounts the way they do for everyone else, they have actual trained people review the accounts. Even if all they do is make sure that the account history is accurate, that is more than the rest of us get. And who believes that they don't airbrush the accounts every once and while?

[Michael Snyder]

I've always found a fundamental disconnect between the Judge leaning over the bench declaring, "Ignorance of the law is no excuse!" And the waiver you just signed for your Attorney that states you will not hold them liable if any fault or flaw in their knowledge of the law cost you your case.
We have a Congress full of Lawyers cheerfully making laws to regulate our lives and now they say they can't read or understand a legal document. I don't know which I find more appalling/disgusting; The whimpered ignorance excuse or the mere fact a "Lawmaker" would go there. Either way it's clear it's time to clean house.

[Where'stheSubprime]

Why is Bank of America buying Countrywide? Perhaps it is because these politicians asked them to. Countrywide isn't worth what Bank of America is now paying: is there anyone who thinks the loans held for investment on the Countrywide financial statements are worth what the company claims they are worth? Countrywide should be allowed to go bankrupt so Mozillo doesnt get bailed out from profitting off of others misfortunes. Bank of America now called Bank of Countrywide: Ken Lewis? Are you awake and do you read?

[Cal]

The editorial page got much more right wing since Murdoch took over. It carried a lot more weight before that happened.

I don't think they are wrong in this instance.. I just don't think they would be yelling so loudly if it was more high profile Republicans in the mix. And I think that distinction is important.

[bkl]

If I go to Countrywide and negotiate a loan at 6% with one point, how do I know that Countrywide charged my neighbor 6% with two points? I don't care how many times I read my loan docs, I won't know that my neighbor didn't get the same rate I got. He might have been charged zero points, I won't know.

[I Had A Dream]

bkl: that's what lawsuits are for.

[Uncle Billy Watches]

So who's deep throat? Did we ever find out?

Who told us originally about "Friends of Angelo"?

Do we know? Better keep them at a safe house in the meantime.

MAN there's going to be a large power vaccuum. Let's hope it gets filled by nice people. Not Eagle Scouts -- I've only met four or five of them that I know of. One I would trust to raise my children, the others... gag.

[MyLessThanPrimeBeef]

Cal, it's OK for the WSJ to yell this loud and I hope some left wing papers will yell as loud as they can about any corrupting Repulicans as well. Let nothing stop them.

But here is the subprime thing about the media today - we have left wing media and right wing media when we should only have corruption-reporting and non-corrupting-reporting media to choose from. I know which one I would choose.

[DR]

It sounds like they are making a mountain out of a mole hill. My guess is the senators didn't want to fill out the paperwork, listing their assets, etc. that might get leaked.

These kinds of loans were done all the time back when we had community banks. Now the banks are so big, only the big shots get that kind of treatment. Unless their is any evidence of quid pro quo, I don't really care.

[Uncle Billy Snorts]

We don't need the press as watchdog, we have Citizens for Responsibility and Ethics in Washington on the left and Judicial Watch on the right. These folks are doing a fine job. Just dandy.

[jeff]

I really don't get it. If you're a senator, you know everything you do is in the public eye and subject to criticism. Why take a loan from a vip program unless the benefits were worth it. Any person with common sense would know that this would raise suspicions. If they were given the same rates as a normal person, why not get a normal loan? This makes no sense to me.

[hereandthere]

Favoritism investigations can go lots further: we all recall MBNA's special loan to Congressman Jim Moran of Virginia and now would be a good time to look into special favors CREDIT CARD ISSUERS provide to VIPs--from special anti identity theft protections to other freebies.

[Where'stheSubprime]

How many people in Washington and politics do you think have common sense?

[Wolfe_Tone98]

Why doesn't this all surprise me in the least? Politicians and businessmen have been scratching each other's backs forever. However, if Sen. Dodd or the other Senators or Congressmen, who may have benefitted from Angelo's largesse, extended "courtesies" to Angelo in return, then that's crimnal; and I hope the Attorney General is prepared to seek indictments accordingly.

[Uncle Billy Snorts]

Wolfe: Hate to break it to you... but I don't think the Attorney General's office has suddenly become hugely interested in "Justice for All." He does seem to have a special place in his judicial heart for Rudi Giuliani and Bernard Kerik, however.

[steve]

This does explain the insane push to "bail out" the Lenders ......

And it highlights our elected officials greed, huberous, and arrogance.

We must ban together and stop them or vote them out.

[Wolfe_Tone98]

Uncle Billy:

Since John Conyers of the House Judiciary Committee is hurling subpoenas at Carl Rove over the White House's termination of some U.S. Attorneys, then I think the A.G. ought to be impaneling a grand jury over this "Friends of Angelo" embarrassment.

[Uncle Billy Snorts]

Wolfe: completely agree, but I think it's going to take a lot more than our strong blog talk to get justice at the federal level.

[jimrob]

Nonsense, shopping around for competitive rates is hardly comparable to the lobbyist network of Senator Shelby.
Once the new WSJ has finshed with the false outrage to fuel the absolute propaganda organ of the Ailes/Murdoch Republican News Network, they might want to look at the dollar flows, deals of Senator Shelby. The guy got a $22K checks in one day to influence regulation.

http://hill6.thehill.com/leading-the-news/hedge-funds-
work-to-build-k-st.-clout-2006-05-04.html

-snip-
So Cerberus pitched to Shelby in classic Washington style: the fund threw a fundraiser, netting the senator’s leadership PAC $99,500 in a single day from Cerberus executives and allies. The PAC’s total haul Feb. 17, 2004, the day of the fundraiser, was $217,750, though it is unclear from Federal Election Commission (FEC) data how much of the non-Cerberus contributions were solicited or bundled by fund executives.

Five days before the fundraiser, Cerberus scored a win when then-Federal Reserve Chairman Alan Greenspan came out against the SEC hedge-fund rule, which already had met with skepticism from Republicans. Five months after the fundraiser, Shelby voiced qualms on hedge-fund registration during a hearing with then-SEC Chairman William Donaldson, the rule’s Republican chief architect.

“I have questions, which I hope to have answered, about whether adviser registration is the most effective means to address concerns voiced by the SEC,” Shelby said at the July 2004 hearing. Three weeks after that, though Shelby never publicly opposed the hedge-fund rule, Cerberus executives sent $22,000 in a single day to the senator’s campaign committee.

[Haywood]

I guess mortgage regulation really is required - when Chris Dodd is incapable of understanding his loan documents, then it's obvious that the paperwork must be clearly presented.

[Doctorf]

Nancy Pelosi described the last US Congress led by Republicans "a culture of corruption." Now that the Democrats are in control, we have sky rocketing energy prices because of Democrats and their nut job environmentalist lobby. Now we can add a new culture of corruption to the latest achievements by the Democrats. People who live in glass houses should not throw stones.

[E]

OK...so when does Milla and the others show up scolding us for questioning the ethics of our politicians?

Pretty typical of that bunch to turn a blind eye though.