Wednesday, June 17, 2009

Republican demands BofA-Countrywide loan emails

Republican demands BofA-Countrywide loan emails
By Kim Dixon
WASHINGTON (Reuters) - Bank of America has a Wednesday deadline to disclose any special mortgage terms the bank's Countrywide Financial unit gave to politically influential customers over an eight-year period, a senior Republican said on Tuesday.
In a letter to Bank of America Chief Executive Ken Lewis, Representative Darrell Issa said the House Oversight and Government Reform Committee was probing deeper into Countrywide's program of preferential mortgage rates.
"Interviews conducted by the committee have given cause for concern about the intent and reach of Countrywide's VIP loan program," Issa said in the June 2 letter released on Tuesday. "In many cases, Countrywide facilitated and expedited the loan process for VIPs by ignoring the company's lending standards."
Bank of America bought Countrywide, which has come to symbolize the excesses of the lending industry, for a fire-sale price of $2.5 billion last July 1. It had collapsed under the weight of bad mortgages and defaults.
A Bank of America spokesman said the bank would reply to the lawmaker by the deadline.
Issa is the top Republican on the House Oversight and Government Reform Committee, which last week grilled Lewis about Bank of America's acquisition of Merrill Lynch. The panel plans to call Federal Reserve Chairman Ben Bernanke and former Treasury Secretary Henry Paulson to testify at a future hearing on the matter.
In the letter to Lewis, Issa asked for VIP loan program documents from 2000 through 2008, including emails and correspondence from lobbyists. He set a June 17 deadline for the bank to turn over materials related to what was also known as the "Friends of Angelo" program, after Countrywide founder Angelo Mozilo.
The committee chairman, Democrat Edolphus Towns, did not sign the letter.
Democrat Christopher Dodd, chairman of the Senate Banking Committee, last year said he regretted obtaining two mortgages from Countrywide in 2003 under the VIP program, which triggered a Senate ethics investigation. Dodd denied receiving any special favors from Countrywide and said he believed the VIP program was "nothing more than enhanced customer service."
Earlier this month, the U.S. Securities and Exchange Commission filed a lawsuit accusing Mozilo of insider trading and misleading investors about the deteriorating of the lender's underwriting standards. Mozilo has denied any wrongdoing.
(Reporting by Kim Dixon)

Source: Reuters

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