Sen. Dodd Says He Was Unaware of Loan Program's Fee Waiver
Tuesday, June 17, 2008; 7:26 PM
Senate Banking Committee Chairman Christopher J. Dodd (D-Conn.) said today that he knew he was part of a "VIP" mortgage program offered by Countrywide Financial Corp. but said he was not aware that the plan included waiving fees that regular customers pay to obtain lower interest rates.
Dodd--who received the special treatment as part of the company's "Friends of Angelo" program, named for Countrywide's chief executive officer, Angelo Mozilo--said loan officers told him and his wife in 2003 that they would be part of an exclusive program. But they assumed the plan gave them unspecified courtesies and did not ask whether it included a waiver of the fees, known as "points," or a reduced interest rate on their loans, he said.
"I don't know that we did anything wrong. I negotiated a mortgage at a prevailing rate, a competitive rate...I did what millions of other people do," Dodd said.
Dodd spoke at a news conference today as the Senate Ethics Committee confirmed that it has begun a preliminary inquiry into special treatment given to Dodd and Sen. Kent Conrad (D-N.D.), who also received a reduction of one point on his Countrywide mortgage, according to a published report.
The committee Dodd chairs oversees the mortgage industry. He is the lead Senate negotiator on a package of legislation designed to deal with the fallout from the subprime mortgage crisis. He was not chairman at the time of the loan.
Conrad is chairman of the Budget Committee and a senior member of the Finance Committee, which has a role in negotiating the housing legislation.
Countrywide is the nation's largest mortgage lender.
According to Conde Nast Portfolio magazine, Dodd and Conrad, chairman of the Budget Committee, received mortgage deals under Countrywide's "Friends of Angelo" program, which was named after the company CEO. Other VIPs, including former housing secretary Alphonso Jackson; former United Nations ambassador Richard Holbrooke; and former Health and Human Services secretary Donna E. Shalala, received the special treatment, the magazine reported.
Dodd borrowed $506,000 at 4.25 percent to refinance his Washington townhouse and $275,042 at 4.5 percent to refinance a home in East Haddam, Conn., according to Portfolio. Quoting internal documents, the magazine said Countrywide waived three-eighths of a point, or about $2,000, on the first loan and a quarter of a point, or $700, on the second.
Like Dodd, Conrad denied knowing that he was part of a program that had saved him money. "I had absolutely no clue they had done that," he said today.
Conrad spoke to Mozilo about his mortgage in 2002 but the mortgage deal under question was not finalized until 2004. Mozilo ordered one point waived on a loan for a more than $1 million vacation home in Bethany Beach, Del., providing a $10,700 benefit to Conrad.
Conrad also received financing in 2004 for an 8-unit apartment building in North Dakota from Countrywide, in apparent violation of company rules that prohibit mortgages for any dwelling with more than 4 units.