Sunday, August 1, 2010

Countrywide's "VIP" Loans to Fannie Mae Employees Cited

Countrywide Financial Corp.'s controversial "VIP" mortgage program made 153 loans to employees of Fannie Mae, the giant federally backed financial institution that helped fuel Countrywide's growth, according to a letter released yesterday by Rep. Darrell Issa (R-Calif.), the Wall Street Journal reported today. Another 20 such VIP loans, which often provided mortgages on terms more favorable than those available to the general public, went to employees of Freddie Mac, another big government-backed buyer of mortgage loans, the Issa letter said. Issa said that the new information provides further evidence that Countrywide Financial was improperly trying to "curry favor and get an edge" by passing out financial favors. Issa's letter went to the Federal Housing Finance Agency, which oversees Fannie Mae and Freddie Mac. It is the latest salvo in a two-year-old investigation of the VIP program spearheaded by Issa. Last week he released a letter saying that 30 VIP loans had gone to U.S. Senators or Senate employees.