Monday, December 19, 2011

Issa Investigating Sweetheart Loans To Congress - And A Flashback To Obama's Loan

Along with his investigation of a number of instances of Washington malfeasance, Re. Darrell Issa, chairman of the House Oversight and Government Reform Committee is now pulling the cover off of 'VIP' loans at rates and terms unavailable to the public made to influential members of Congress and their key staff members.

In a letter to Reps. Jo Bonner (R-Ala.) and Linda Sanchez (D-Calif.), the chairman and ranking member of the House Ethics Committee, Issa stated that he has evidence that four members of Congress got such loans via the now defunct Countrywide Financial in a program called in house by the name 'Friends of Angelo', named for Angelo Mozilo, Countrywide’s founder and former CEO. And that they may have transferred this 'benefit' to favored staff members:

“Documents reviewed by the Committee show that four current members of the U.S. House of Representatives received loans through this VIP program,” Issa said in his Dec. 16 letter to Bonner and Sanchez. “In accordance with this Committee’s policy to forward information relating to possible wrongdoing by Members of Congress to the appropriate ethics committee, I write to bring the existence of these loans to your attention.”

Issa added:”Between January 1996 and June 2008, Countrywide’s VIP unit gave discounted loans to employees of the federal government including the U.S. Congress… My staff is also aware of the possibility that loans with VIP-benefits were conferred to other Members, and serviced by a separate loan processing branch.”

House ethics rules require that lawmakers and staff may only accept “loans from banks and other financial institutions on terms generally available to the public.

While Issa didn't name the four legislators he had in mind, Rep. Edolphus Towns (D-N.Y.), the former chairman of Oversight and Government Reform, has already acknowledged that he got two loans through the 'Friends of Angelo' program. Which of course, he claims he was unaware of!

Two others likely on the list are ex-Senator Chris Dodd,(D-CT) AKA 'Mr. Financial Integrity' and retiring Senator Kent Conrad (D-ND), both of whom got sweetheart loans through Countrywide and were casually 'investigated' a while back. Since Dod is already gone, that would leave two more sitting members of Congress Issa is talking about.

Of course, there's another person who got a sweetheart loan back when he was still a sitting senator - and it wasn't through Countrywide.

Yes, that would be the current occupant of the White House, Barack Obama, back when he closed the very interesting transaction he made to buy his Chicago mansion, apparently with the assistance of Tony Rezco...and a very helpful bank:

The freshman Democratic senator received a discount. He locked in an
interest rate of 5.625 percent on the 30-year fixed-rate mortgage, below the
average for such loans at the time in Chicago. The loan was unusually large,
known in banker lingo as a "super super jumbo." Obama paid no origination fee or
discount points, as some consumers do to reduce their interest rates.

The Obama campaign called the rate "consistent with Northern Trust policies, and it reflected the base rate set for that period discounted to address the competition for the account and other opportunities, such as personal financial services, that the relationship would bring to Northern Trust."

It was a pretty good investment on their part, since Northern Trust later received preferential treatment when it came to taxpayer provided stimulus funds after Barack Obama became president..some of which they spent in rather interesting ways. Other opportunities, indeed.

You'll remember the story on the Obama's Hyde Park mansion of course.

The Obamas apparently bought the place for $300,000 less than the $1.95 million asking price, right at the height of the real estate boom in 2006, something more than a little bit unusual in a seller's market with prices on the upswing.

Funny thing, on the same day the Obamas closed, the wife of Obama's chief fundraiser Tony Rezco closed on an adjoining side lot with the same owner for the full asking price of $625,000, which Tony Rezco's wife Rita later sold to the Obamas at a deep discount.

Odd that a developed property with a palatial house on it would sell for a deep discount in a seller's market while an undeveloped lot next door would go for full asking price.

Unless, of course, the seller received full asking price on the lot in exchange for discounting the price of the house, which would reduce the loan amount, down payment, and property taxes the new owner of the house would have to pay....

Chicago baby. I doubt Darrell Issa's going to be investigating that particular transaction.

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