Report: L.A. grand jury probing Countrywide VIP loans

The Wall Street Journal reports that a federal grand jury in Los Angeles is investigating the so-called "Friends of Angelo" loan program at Countrywide Financial, under which influential borrowers received preferential terms on home loans.

The reported borrowers under the program have included U.S. Sen. Chris Dodd (D-Conn.), former Fannie Mae Chief Executive Franklin Raines, and California state appeals court judge Richard Aldrich.

Today's Journal:

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.

Portfolio.com first reported the VIP program at Countrywide under then-CEO Angelo Mozilo (pictured). In some cases, Mozilo was personally involved in approving VIP loans. In the case of Judge Aldrich, a loan officer at Countrywide, Robert Feinberg, told Portfolio he alerted Mozilo that the credit line being sought was "above what guidelines allow." Mozilo responded, according to an e-mail obtained by Portfolio, "Go ahead and approve the loan, and close it as soon as possible."

-- Peter Viles

Your thoughts? Comments? E-mail story tips to Peter Viles.
Photo Credit: Getty Images

Comments

[Giacomo]

Somewhere, someone is making book on whether this guy stays out of jail. I'd give long odds.

He's a perfect symbol of our past excesses, and many would love to see him go down. Being a person of color (orange) won't help either.

[JohnF]

If Obama is elected, this inquiry will be stopped by the replacement US Attorney

[J Hofreiter]

Dodd and Raines? Haha those are names we're going to be hearing a LOT of in regards politicians inappropriately obtaining massive dollars by various means during this housing and credit crisis. Dodd in particular is trying VERY hard to paint himself as some kind of public crusader vs big corporate interests, and in some cases the media is helping do it - eg KNPR on a daily basis plays excerpts from Dodd's rants from the floor but never mentions a word of his explicit and illicit involvement in fannie/freddie. If Dodd were (R-Conn) instead of (D-Conn), I'm pretty sure we'd be hearing hours and hours of analysis about his unethical activities and how President Bush (and possibly Senator McCain) were somehow involved with him.

[PacificGatePost]

WHO SHOULD OVERSEE THE FIX and WHO SHOULD BE HEADING TO JAIL?

Too many have fed at the trough. What Fannie Mae and Freddie Mac executives did was illegal. Taking their cash favors was morally bankrupt.

http://pacificgatepost.blogspot.com/
2008/09/fanny-mae-freddie-mac-congressional.html

Still no time to panic, but some executives and some in Congress should see jail time.

….AND, How about starting with all Senators who took cash from Fannie and Freddie?

[aldo818]

Just my gut feeling, but, I feel that no one will be held responsible if the bailout goes through. It would just cover up everyones dirty deeds and move the market along the status quo.

On the other hand, I think that the economy will really tank, many will go unemployed and many businesses will have to close.
It's like our economy needs an enema to flush out all the bad stuff.

Just my two cents...

[KansasGirl]

Time to clean house.

[Sam]

The Democrats brought this mess on us. They should be investigated and put in jail. All assetts forfitted. Obama has all the thieves on his staff. Obama is a thief.

[VanMorrisonFan]

Oh c´mon...the thought that Senators, high level CEO´s, golf buddies, etc., should actually have to fill out paperwork and wait like everyone else is just absurd! Rank has its priviledge. We little people should just get used to it.

(intended as sarcasm, in case people don´t understand that)

[iconoclast]

And don't forget Jaimie Gorelick was one of the "Friends of Angelo".

Know what the difference between Enron and Fannie Mae/Freddie Mac is? In Enron, the culprits were convicted. With Fannie Mae/Freddie Mac, the culprits became Obama advisors.

[ScottK]

JohnF: "If Obama is elected, this inquiry will be stopped by the replacement US Attorney Jamie Gorelick."

There, that's better.

[ScottK]

JohnF: If Obama is elected, this inquiry will be stopped by the replacement US Attorney, Jamie Gorelick.

There, that's better.

[Elizabeth Bozzell]

It is laughable (but not surprising) that Chris Dodd, Schumer, Obama and the despicable Harry Reid can pontificate about the sub-prime crisis when they and their buddies, Franklin Raines and Jim Johnson, benefited from the scam and precipitated this problem.

I am amazed to read these posts on the LA Times Blog - somehow as a denizen of flyover country I had the idea the LAT was the west coast edition of Pravda.

[Patrick]

Actually, whatever money Chris Dodd, and other Dems took, they took, and they should be scrutinized.

But at many of the lobbyists running McCain's campaign lobbied for Fannie and Freddie, including Rick Davis.

Look it up.

[DonnaFrFlorida]

Gotta see this - Pass it on

http://www.youtube.com/watch?v=H5tZc8oH--o&eurl=http://dyn. politico.com/members/forums/thread.cfm?catid=1&subcatid=2&t hreadid=1472311&start=61&CurrentPageiurl=http://i1.ytimg.co m/vi/H5tZc8oH--o/default.jpg

[Jody]

I hope they indict the Postmaster General John Potter. He too was part of the friends of Angelo crew.

[Shawn ASpen]

If Obama is elected, dont have to worry about this getting swept under the rug, a civil war will settle it all.

[Tim]

No one is going to jail over this, Sen Chris Dodd is among those who received a VIP loan from Countrywide and, when you are politically connected, professed ignorance gets you off every time. They'd have to perp walk him as well and that is not going to happen.

The borrowers are all using the standard talking-point defense that borrowers did not know they were getting special treatment. But then why borrow from Countrywide? Yet while some will get scolded for their ethics and some may pay part of what they saved as fines, none will even see an arraignment.

[sheila]

good lord, i love how all of you conveniently ignore the fact that RICK DAVIS IS STILL ON FREDDIE MAC'S PAYROLL FOR $15,000 A MONTH, a fee specifically negotiated based on his position as MCCAINS CAMPAIGN MANAGER. sure, it's less than the $30,000 a month he got from them during the bubble buildup, but it's not exactly peanuts. and its a hell of a lot more than the modest mortgage savings any of these VIPs may be getting.

this is hardly an Obama scandal. this is a power and privilege issue, and VanMorrisonFan jokes about it, but yes, they all get good tee times, the best tables at restaurants, designer clothes and the use of corporate jets. this is just more of the same, built on a corporate aristocracy model where fascists like "justice" Scalia have declared that bribing politicians is a FIRST AMENDMENT RIGHT. how do you expect anyone to have clean hands when bribery is central to what used to be a democracy? look a little deeper, people. this is endemic, and until we get all money out of politics, we will always have these programs with us.

[Pepper]

Quit backbiting each other, its got nothing to do with petty party politics.... IT HAS EVERYTHING TO DO WITH A FULLY BROKEN SYSTEM THAT IS FULLY AND UNADULTERATED CORRUPT ON BOTH SIDES OF THE AISLE..

These bankers through bribery and blackmail have bought and paid for our congress on both sides, so quit pontiificating.... ITS US AGAINST THEM, NO US AGAINST EACH OTHER... REMEMBER THAT !

WE, THE PEOPLE, ARE THE ONES GETTING SCREWED BY THEM THE CONGRESS, WHITE HOUSE, FEDERAL RESERVE, US SEC OF TREASURY AND WALL STREET SCUM BAGS WHO ARE PAYING FOR ALL OF THIS.

They all need to go to jail. Our candidates were "selected" by the CFR run by Wall STreet bankers and if you don't believe me BOTH SIDES, go check out who got what from the Wall STreet bankers.... BOTH PRESIDENTIAL CANDIDATES GOT MILLIONS.... IN FACT CONTRIBUTIONS JUST BROKE A BILLION DOLLARS FOR THE FIRST TIME IN HISTORY.

WE have to fix the entire system and quit fighting between ourselves or we lose the power to do that... we need to come together and throw all of them out of office and vote third party since they haven't had a chance to be corrupted YET.

[Pepper]

Hofreiter....... not so, we never hear hours and hours of criticism of the bush cabal or the Fed reserve, or the Wall Street bankers, now do we????

WE NEVER HEAR about the republicans who are also on the take, and nothing about the millions to both presidential candidates. The PRESS IS THERE TO PROTECT THE ELITE AGAINST US. ALL OF THEM, not just the dems, but the repubs as well...... open your eyes and get off this petty politics bandwagon. Until you see the full extent of the corruption in both parties we will never solve it because we will be too busy protecting our turf that isn't even our turf.

Our turf is the wealth they are extracting from us through blatant and criminal fraud.... THEY ALL NEED TO GO DOWN IF THEY DO NOT TAKE PROPER STEPS TO STOP THIS FIASCO.

[JOE ALEXICH]

dont trust the dems with these loans or should I say pay for your votes policy ,believe me the democractic have ruined three of the places I lived in.If they continue to grab more power, this WILL make it four.

[LA Doc]

Awesome. Simply awesome. Dodd, Shumer, Obama and all their buddies sat FanFre and Countrywide need to be exposed for the corrupt hypocrites they are, especially since they enabled the current crisis. Unfortunately, the rest of the Leftist propagandists in the media will bury this.

[Nancy]

Anyone who has had ANYTHING to do with this disgracful disaster shoud be prosecuted to the FULL EXTENT OF THE LAW....From George W. Bush right on down, and all around.
and why should I have to pay one cent to bail out anyone? I live within my means,. I drive a 13 year old car....hum and I don't have any debt...I guess you would call me "RESPONSIBLE'...WHAT A CONCEPT.

WAKE UP A M E R I C A !

[GG]

Hope sam and iconclast are paid plants and not really so stupid as to believe only one side is guilty of anything.

"The last six months have made it abundantly clear that voluntary regulation does not work," the chairman of the Securities and Exchange Commission, Christopher Cox, said in a statement released Friday.

As long as lobbyist money feeds the system and there is a revolving door between the government and the lobbying firms, it will be business as usual. You scratch my back and I scratch your back. They have insinuated themselves into every section of the government.

Christopher Cox a former republican Representative and whom McCain wanted to fire (and can't) is the only one I see that has not been a lobbyist. He was all for deregulating everything though and not over-seeing banks that actually wanted oversight.

Martin Feldstein is a financial advisor on the board of AIG and a McCain advisor. His other claim to fame is being the author of "Privatizing Social Security".

Phil Gramm wrote the Commodity Futures Modernization Act often refered to as the "Enron Loophole" Also a McCain advisor. (His wife was on the board for Enron during that time.)

Rick Davis founded Homeownership Alliance, a Fannie Mae and Freddie Mac advocacy group. Runs the McCain campaign.

Henry Paulson who is proposing the planned bailout was a partner in Goldman Sachs.

Oh what a tangled web.....

[john from fresno]

wow the L A Times doing a reporting job instead of their usual liberal coverup might bring back from subscribers naw