Countrywide financial political loan scandal
Encyclopedia
The U.S. financial political loan scandal in 2008-2009 involved politicians who allegedly received favorable mortgage rates.

In June 2008 Conde Nast Portfolio
Condé Nast Portfolio
Portfolio.com is a website published by American City Business Journals that provides news and information for small to mid-sized businesses. It was formerly the website for the monthly business magazine Condé Nast Portfolio, published by Condé Nast from 2007 to 2009.Portfolio.com is continually...

 reported that numerous Washington, DC politicians over recent years had received mortgage financing at noncompetitive rates at Countrywide Financial
Countrywide Financial
Bank of America Home Loans is the mortgage unit of Bank of America. Bank of America Home Loans is composed of:*Mortgage Banking, which originates purchases, securitizes, and services mortgages. In 2008, Bank of America purchased the failing Countrywide Financial for $4.1 billion...

 because the corporation placed the officeholders in a program called "FOA's"--"Friends of Angelo", Countrywide's Chief Executive Angelo Mozilo
Angelo Mozilo
Angelo R. Mozilo was the chairman of the board and chief executive officer of Countrywide Financial until July 1, 2008. Condé Nast Portfolio ranked Mozilo second on their list of "Worst American CEOs of All Time".-Life and career:...

. The politicians extended such favorable financing included the chairman of the Senate Banking Committee, Christopher Dodd
Christopher Dodd
Christopher John "Chris" Dodd is an American lawyer, lobbyist, and Democratic Party politician who served as a United States Senator from Connecticut for a thirty-year period ending with the 111th United States Congress....

 (D-CT), and the chairman of the Senate Budget Committee, Kent Conrad
Kent Conrad
Kent Conrad is the senior United States Senator from North Dakota. He is a member of the North Dakota Democratic-NPL Party, the North Dakota affiliate of the Democratic Party...

 (D-ND). The article also noted Countrywide's political action committee
Political action committee
In the United States, a political action committee, or PAC, is the name commonly given to a private group, regardless of size, organized to elect political candidates or to advance the outcome of a political issue or legislation. Legally, what constitutes a "PAC" for purposes of regulation is a...

 had made large donations to Dodd's campaign. The largest recipient of campaign contributions from Countrywide, though, was Rep. Ed Royce (R-CA), House Financial Services Committee), who has received $37,500 since 1989. Dodd has advocated that the federal government, through the Federal Housing Administration
Federal Housing Administration
The Federal Housing Administration is a United States government agency created as part of the National Housing Act of 1934. It insured loans made by banks and other private lenders for home building and home buying...

, insure up to $300 billion in refinanced mortgages for distressed homeowners.

It was reported by the Wall Street Journal on 6 June 2008 that 2 former CEO of Fannie Mae, Franklin Raines
Franklin Raines
Franklin Delano "Frank" Raines is an American business executive. He is the former chairman and chief executive officer of the Federal National Mortgage Association, commonly known as Fannie Mae, who served as White House budget director under President Bill Clinton...

 and James A. Johnson
James A. Johnson (businessman)
James A. Johnson is a United States Democratic Party political figure, and the former CEO of Fannie Mae. He was the campaign manager for Walter Mondale's failed 1984 presidential bid and chaired the vice presidential selection committee for the presidential campaign of John Kerry...

, who was also an adviser to then-Democratic presidential candidate Barack Obama, had received loans from Countrywide. On July 16, 2008, The Washington Post
The Washington Post
The Washington Post is Washington, D.C.'s largest newspaper and its oldest still-existing paper, founded in 1877. Located in the capital of the United States, The Post has a particular emphasis on national politics. D.C., Maryland, and Virginia editions are printed for daily circulation...

reported that Franklin Raines had "taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters." However, Raines and the Obama campaign both allege that Raines has never advised Obama. See Raines and Obama.

On 18 June 2008, a Congressional ethics panel started examining allegations that Democratic Senators Christopher Dodd
Christopher Dodd
Christopher John "Chris" Dodd is an American lawyer, lobbyist, and Democratic Party politician who served as a United States Senator from Connecticut for a thirty-year period ending with the 111th United States Congress....

 of Connecticut (the sponsor of a major $300 billion housing rescue bill) and Kent Conrad
Kent Conrad
Kent Conrad is the senior United States Senator from North Dakota. He is a member of the North Dakota Democratic-NPL Party, the North Dakota affiliate of the Democratic Party...

 of North Dakota received preferential loans by troubled mortgage lender Countrywide Financial Corp.

Dodd has faced criticism for his role in this scandal from Connecticut's largest newspaper, the Hartford Courant as well as from the Connecticut Republican party. Citizens Against Government Waste
Citizens Against Government Waste
Citizens Against Government Waste is a 501 non-profit organization in the United States. It functions as a think-tank, 'government watchdog', and advocacy group for fiscally conservative causes...

 (CAGW) named Dodd its June 2008 "Porker of the Month" for accepting a preferential mortgage deal from Countrywide Financial
Countrywide Financial
Bank of America Home Loans is the mortgage unit of Bank of America. Bank of America Home Loans is composed of:*Mortgage Banking, which originates purchases, securitizes, and services mortgages. In 2008, Bank of America purchased the failing Countrywide Financial for $4.1 billion...

 which stands to benefit from a mortgage bill he is pushing through Congress.

On January 6, 2010, Dodd announced that he would not run for re-election.

See also

  • Friends of Angelo program
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