Countrywide

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Countrywide VIP program

The House Oversight and Government Reform Committee has launched a wide-ranging investigation into the role of mortgage lenders in the global financial meltdown and economic crisis.

The Committee will demand information from mortgage giant Countrywide, Bank of America (which now owns Countrywide), Wells Fargo, JP Morgan Chase (including Chase Manhattan Bank), Citigroup, Residential Capital (GMAC), and U.S. Bank Home Mortgage. The panel also plans to issue subpoenas for records on Countrywide’s VIP program, including information on details of any mortgages held by members of Congress, as early as Friday, according to an internal e-mail obtained by The Hill...

...The move is a 180-degree change for Towns, who for months has stood firm against opening an investigation into Countrywide’s VIP program in the face of pressure from Rep. Darrell Issa (R-Calif.), the oversight panel’s ranking member.

“It is my goal to work through this matter in a bipartisan fashion and conduct a complete review of the role of mortgage companies in the current financial crisis,” Towns said in the release. “As part of this, we need to clarify unanswered questions about Countrywide Financial's VIP program, so I am issuing a subpoena to gather information about how that program worked and whether it provided special benefits to government officials. I am prepared to issue additional subpoenas if other companies fail to respond to our document requests.”

Democrats on the House Oversight and Government Reform Committee have been huddling since Thursday to hammer out the details of the subpoenas and concerns that any investigation into Countrywide’s VIP program would implicate several members, including prominent Democrats, as well as Republicans who were part of the VIP program. This could create a far-reaching scandal similar to the House banking controversy of the early 1990s, when it was revealed that the House allowed members to overdraw their House checking accounts without being penalized by the bank. The scandal implicated 22 members...."

Branch 850

"...“We will uncover the true motive and intent behind Countrywide’s actions and learn the full size and scope of how this program influenced policymakers and their policy decisions,” Issa said in a statement. “The fact of the matter is we cannot fully understand the failure of government if we do not expose the failure of government officials led by an attempt to bribe them.”

The subpoena forces Bank of America to produce documents by Nov. 13. The committee has demanded a broad range of documents, including e-mails, for covered VIP borrowers, including those that were "Friends of Angelo" and those serviced by Branch 850, Countrywide's special VIP branch. It also demanded all documents and emails between Countrywide officials discussing the motive and intent of the program, and all telephone recordings between covered borrowers and Countrywide employees.

They defined “covered borrowers” as a person or their spouse who at the time of the loan was an officer or employee of a federal agency, a member of officer of the House, an employee of the House, an officer or employee of a GSE, or an officer or employee of a state and local government.

Towns had originally said he did not want to open an investigation into Countrywide’s VIP program out of deference to the Justice Department, which reportedly has its own probe under way.

The House Ethics Committee also has a history of shutting down existing investigations when a conflict with the Justice Department arises. In this case, the political pressure to act could make it difficult for the ethics panel to avoid an intensive probe.

Democratic leaders, however, worry that any dramatic findings could implicate several lawmakers, including prominent Democrats, and lead to a far-reaching scandal similar to the House banking controversy of the early 1990s, when it was revealed that the House allowed members to overdraw their House checking accounts without being penalized by the bank. The scandal implicated 22 members, and some political observers argue it contributed to Democrats losing the majority in 1994. "

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