Countrywide Mortgage Scandal

In June 2008, Conde Nast's Portfolio magazine began an investigation into whether or not several politicians received favorable mortgage deals from Countrywide Financial Corporation. Portfolio exposed internal company documents and e-mails that show that Sens. Christopher Dodd, (D-Conn.) Kent Conrad (D-ND), and other current and former government officials may have received preferred deals.

Background
A magazine investigation is being conducted into whether or not various politicians received favorable mortgage deals from Countrywide Financial Corporation. Conde Nast's Portfolio magazine broke the scandal in June 2008, by exposing documents and emails that described a special, preferred V.I.P loan program. In the company’s documentation, the recipients of the loans were called "F.O.A's" or Friends of Angelo Mozilo, who is the chief executive of Countrywide.

Participants in the V.I.P. program included Senators Christopher Dodd, (D-Conn.) Kent Conrad (D-ND), former Secretary of Housing and Urban Development Alphonso Jackson, former Secretary of Health and Human Services Donna Shalala, and former U.N. ambassador and assistant Secretary of State Richard Holbrooke. These individuals allegedly received better mortgage offers than ordinary buyers, leading to half point mortgage reductions and the waving of fees.

If these loans really were given on favorable terms, then the aforementioned individuals could have violated Federal Ethics laws regarding the amounts that officials can receive as gifts.

House Ethics Panel
All six members of the Senate Ethics Panel proposed that there should be stricter mortgage disclosure requirements for lawmakers. According to CQ Politics, the proposal would require Congressmen to "disclose residential mortgages as a liability on their financial disclosure reports." Senators would be obligated to disclose the rough amount of the mortgage, the interest rate, duration of the loan, date of the loan, and the location of the lender.

Articles

 * Leslie Wayne, "Senators Caught in Mortgage Fallout","New York Times", June 14, 2008
 * "Countrywide's Many Friends","Conde Nast Portfolio", June 12, 2008
 * http://www.cqpolitics.com/wmspage.cfm?docID=cqmidday-000002904320 Ethics Panel Seeks Fuller Disclosure of Senators’ Mortgage Deals] CQ Politics June 24, 2008.
 * Jim McElhatton, "Countrywide's PAC closing amid inquiries," The Washington Times, July 2, 2008.