Dodd, Conrad: Mortgage discounts were 'courtesy'

[EmptyTimCup]

Dodd, Conrad: Mortgage discounts were 'courtesy'

S.A. Miller (Contact)

Two powerful Senate Democrats said Tuesday that they knew they got low mortgage-rate deals in a lender's VIP program but thought the special treatment was a "courtesy" or the same as "frequent flier" discounts.

Both vehemently denied any wrongdoing or ethical lapse in the mortgage deals, which came to light a year ago and triggered investigations by the Senate Select Committee on Ethics and the House Oversight and Government Reform Committee.

Robert Feinberg, who formerly worked in the mortgage giant's VIP section, said in testimony to congressional investigators last month that the senators were made aware of their status as VIPs or "Friends of Angelo," referring to Countrywide Chief Executive Officer Angelo Mozilo. The CEO played a central role in the subprime-mortgage meltdown, which included the downfall of Countrywide last year.

"It was always instilled in them to let them know their sense of importance of where they were. And that you ... were a friend of Angelo's. You were referred by Angelo. You were approved by Angelo," Mr. Feinberg told Republican investigators for the House oversight committee.

"I mean, they'd already been there to begin with, so they knew," Mr. Feinberg said. "You know, once you're basically in the VIP department you're in. You know, you're done. You don't even have to really talk to Angelo if you don't want to."

Unlike Mr. Dodd, Mr. Conrad has said he spoke with Mr. Mozilo while pursuing a mortgage.

Records from the time indicate that Mr. Mozilo was trying to curry favor with Mr. Conrad. In a 2004 e-mail obtained by Conde Nast Portfolio magazine, Mr. Mozilo instructed the VIP section to knock one point off a loan to Mr. Conrad "due to the fact that the borrower is a senator."

Mr. Feinberg also said Mr. Conrad got the commercial loan for the eight-unit apartment block, even though Countrywide worked almost exclusively in residential lending, because the senator was an FOA, or "Friend of Angelo."

Yeah ah huh ok ..........

Conrad, Dodd tied to VIP loans

Referring to Mr. Dodd of Connecticut, the investigator asked:

"And do you know if during the course of your communications" with the senator or his wife "that you ever had an opportunity to share with them if they were getting special VIP treatment?"

"Yes, yes," Mr. Feinberg replied.

Dodd spokesman Bryan DeAngelis said Mr. Feinberg has repeatedly made allegations of special treatment that were not true.

"As the Dodds have said from the beginning, they did not seek or expect any special rates or terms on their loans and they never received any. They were never offered special or sweetheart deals and if anyone had made such an offer, they would have severed that relationship immediately," Mr. DeAngelis said.

Mr. DeAngelis also repeated Mr. Dodd's statements from February that an independent report showed the terms received by the senator and his wife were widely available at the time.

The ethics committee determines whether senators violated standards of conduct. The outcome of the investigation could hinge on whether the mortgage violated strict limits on gifts to lawmakers or ran afoul of other Senate rules.