According to a Republican staff report from the House Oversight and Government Reform Committee, influential officials who received discounted Countrywide Financial mortgages knew of their preferential treatment, and sometimes even requested it from company executives.

The report alleges Robert Feinberg, a former Countrywide executive, told Congressional investigators that it was the practice of Countrywide to tell its VIP borrowers they were receiving preferential treatment, according to the Republican report.

Senate Banking Committee Chairman Chris Dodd (D-Conn.) and Senate Budget Committee Chairman Kent Conrad (D-N.D.) have denied knowing they were given any special treatment at the time their mortgages were written. Sen. Dodd said he was granted no favors by the lender.

The report fails to provide any direct evidence showing Conrad or Dodd knew of any preferential treatment.

Feinberg emailed Country CEO Angelo Mozilo in 2004 and told him Sen. Conrad “wants to refinance to a 15 year mortgage. The rate we are looking at is 4.875% and it has a 1 point charge.” Mozilo responded “take off 1 point.”
Sen. Conrad’s office acknowledged the discount, but said Countrywide never informed him and that Feinberg has changed his story.

“Senator Conrad never asked for, expected, or was aware of loans on any preferential terms,” said Christopher Gaddie, a spokesperson for Sen. Conrad. “Mr. Feinberg’s testimony directly contradicts what he said previously … that he was ‘not allowed to tell Conrad or other VIP customers that discount points were being waived.’”

The charges are part of a sweeping investigation of the “Friends of Angelo” program which “was affording preferential treatment to Members of Congress, Congressional staff, and lobbyists,” according to the Republican report.

“Company policies were thrown in the trash in a rush to offer preferential treatment to VIPs such as Senator Kent Conrad and Senator Chris Dodd,” said Rep. Darrell Issa (R-Calif.) in a statement slamming the Democrats. “Despite our work, questions remain about the ‘Friends of Angelo’ program and the identities of others who likely received improper benefits.”

Issa asked for the full committee to request “all Countrywide VIP and lobbying documents from Bank of America.” 

Countrywide was purchased last year by Bank of America. (BAC)