Wednesday, June 18, 2008

Dodd denies improper mortgage deals

By Mary E. O’Leary
Register Topics Editor

U.S. Sen. Christopher Dodd, D-Conn., again Tuesday denied any impropriety in the rates he received from Countrywide Financial Corp. in refinancing two mortgages.
The senator, in a conference call with state reporters, also said he would leave it up to others to speculate whether the reports were part of a smear campaign against him.
"It is somewhat curious," he said of the timing of The charges of preferential treatment by Countrywide came as Dodd, co-chairman of the Banking Committee, was working on legislation to halt some types of subprime lending and deal with the jump in home foreclosures.
The Associated Press reported that Dodd later Tuesday acknowledged he knew in 2003 that Countrywide placed him in a "VIP section" when the firm reportedly gave him preferential rates on two mortgages.
He denied however, that he knew he was getting any special deal and said he didn’t plan to give up the loans.
"I’m not clairvoyant," Dodd said. "There was no red flag to me that we were getting some special treatment."
Asked in the conference call if the news hurt his chances of being considered for the Democratic vice presidential position, Dodd said it doesn’t help, particularly when the story was widely disseminated before he had a chance to research records and fully respond.
Dodd said he never sought any favors, nor was he offered any, and said if someone proposed a deal because of his position, he would end the relationship immediately.
Countrywide is a leading player in the sub-prime mortgage crisis and a federal judge in California recently gave the go-ahead for a lawsuit by shareholders who accused the firm of making bad loans and misleading its investors.
Dodd has described Countrywide’s role in the crisis, where low teaser rates ballooned over time to rates borrowers were unable to pay, as "abusive" and Tuesday criticized the company again. "They created the problem," Dodd said.
Dodd said he never spoke to any high-ranking Countrywide officials about his refinancing, only a loan officer. The senator added that he didn’t believe he had ever met Angelo Mozilo, chief executive of Countrywide.
The story broke last week in Portfolio magazine based on e-mails it obtained from Countrywide workers instructed to give deals to VIPs in the "FOA," or Friends of Angelo, loan program.
Sen. Kent Conrad, D-N.D., chairman of the Senate Budget Committee, also was accused of receiving favorable rates on mortgages. He has sent a check for the $10,700 he saved on his vacation home loan from Countrywide to Habitat for Humanity, and has refinanced another Countryside mortgage through a different company.
Dodd Tuesday said he welcomed an investigation by the Senate Ethics Committee, but he does not plan to make a similar charitable donation because he said the rates he was given, after he and his wife shopped several lenders, were within the range available to millions of Americans.
Dodd said in 2003 they refinanced their Washington home with a five-year adjustable mortgage at 4.25 percent on $506,000, and their East Haddam, Conn., home with a 10-year adjustable mortgage at the same rate on $275,042.
"Whether we got cut rates are not borne up by the facts," Dodd said, referring to a Washington Post report that said the rates appeared to be at or above the prevailing rates at the time.
Dodd said other lenders he spoke with included Washington Mutual, Wachovia and Lending Tree. The original loan on the Connecticut home in 1981, as well as one for the 1999 purchase of the Capitol Hill home, were withDodd Tuesday said he and Sen. Richard Shelby, R-Ala., had completed bipartisan legislation on the housing crisis that he hoped would help capital flow again and provide a way to deal with the 8,000 foreclosures filed daily across the country.
Mary E. O’Leary can be reached at 789-5731, or The Associated Press contributed to this story. Countrywide.

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