CEO Watch Mozilo, Countrywide Under Fire
Countrywide Financial C.E.O. Angelo Mozilo is under fire for providing two U.S. senators and former cabinet members special home loans that waived lender fees and company borrowing rules.
The Senate Ethics Committee is investigating if charges that Sen. Kent Conrad, D-N.D., and Sen. Christopher Dodd, D-Conn., violate Senate rules on gifts that make it illegal to receive loan on favorable terms.
The revelations, first reported by Portfolio, come as Democrats put the finishing touches on sweeping housing legislation that would help Americans in danger of foreclosing on their homes.
Conrad has acknowledged that he spoke to Mozilo when he was searching for a mortgage, according to the Associated Press.
“I had no reason to believe, and I had no expectation, that I’d have any sweetheart deal,” Conrad told AP.
Dodd told reporters he knew that Mozilo placed him in a “V.I.P. section” when Countrywide gave him mortgage rates. But he denied he knew he was getting special deals.
He also said he had no plans to give up the loans, according to the AP.
In more bad news for Mozilo, the Attorneys General of Illinois and California said they are suing Countrywide for its role in the subprime meltdown.
Lisa Madigan, the Attorney General of Illinois, said Countrywide promoted high-risk loans that contributed to the spike in home foreclosures throughout the state.
Jerry Brown, Madigan’s counterpart in California, said Countrywide violated the state’s unfair business practices with many actions it took to market its risky loans.
