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Where's The FBI?

Discussion in 'U.S. Politics' started by KingBall, Jun 14, 2008.

  1. KingBall

    KingBall New Member

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    "Senators Christopher Dodd, Democrat from Connecticut and chairman of the Banking Committee, and Kent Conrad, Democrat from North Dakota, chairman of the Budget Committee and a member of the Finance Committee, refinanced properties through Countrywide’s “V.I.P.” program in 2003 and 2004, according to company documents and emails and a former employee familiar with the loans.

    Other participants in the V.I.P. program included 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. Jackson was deputy H.U.D. secretary in the Bush administration when he received the loans in 2003. Shalala, who received two loans in 2002, had by then left the Clinton administration for her current position as president of the University of Miami. She is scheduled to receive a Presidential Medal of Freedom on June 19

    "According to company documents and emails, the V.I.P.'s received better deals than those available to ordinary borrowers. Home-loan customers can reduce their interest rates by paying “points”—one point equals 1 percent of the loan’s value. For V.I.P.'s, Countrywide often waived at least half a point and eliminated fees amounting to hundreds of dollars for underwriting, processing and document preparation. If interest rates fell while a V.I.P. loan was pending, Countrywide provided a free “float-down” to the lower rate, eschewing its usual charge of half a point. Some V.I.P.'s who bought or refinanced investment properties were often given the lower interest rate associated with primary residences.

    Unless they asked, V.I.P. borrowers weren’t told exactly how many points were waived on their loans, the former employee says. However, they were typically assured that they were receiving the “Friends of Angelo” discount, and that Mozilo had personally priced their loans."

    Is that illegal and/or directly in violation of both House and Senate rules?

    The issue is not just that closing costs and points were waived - it is the "float down" provision and even a reduction in interest rate. Grab your trusty computer (e.g. Quicken) and run the difference on an amortization schedule over 30 years of a 1/4% interest rate change, then tell me what you think. The "benefit" involved here adds up to tens of thousands of dollars.

    Rumor is that Countrywide had an entire department that dealt with these "FOA" (Friends of Angelo) loans, and I'll bet that a few well-placed subpoenas will show that these loans were disproportionately handed out to people with political influence.

    You think that's bad? Take a look at what MSNBC's reporting said Countrywide objected to:

    "In a statement Friday, Countrywide did not address questions about the VIP program, but said it regretted the impact its disclosure may have had on customers. The company said it was "very concerned about the improper disclosure of confidential customer information. Protecting customer privacy is of utmost importance and we are aggressively undertaking measures to prevent further disclosure of private customer information." "


    And this from a company that has its franchise and is regulated directly as a consequence of Federal Laws passed by that very same Congress?

    Does this constitute bribery on a massive scale?

    You be the judge.

    Here's something to help you make up your mind (Senate Ethics Rules):

    Now let's go on to another piece from that same MSNBC article:

    "Conrad obtained a $1.16 million loan from Countrywide in 2002 to buy his vacation home, then refinanced twice through the company. Portfolio reported that an internal e-mail from Mozilo instructed an employee to give Conrad a 1-percent discount off his interest rate on his 2004 refinance of $1.07 million, a savings of about $10,000 a year in interest payments."


    Is Congress trying to save you or are they trying to save themselves?

    I believe we need to see investigations and, if warranted, indictments and prosecutions. We need a special prosecutor. This investigation must reach members of both the Legislative and Executive branches who may have abused the public trust in this and related matters.

    I have documented in previous Tickers that Congress was directly warned before it repealed Glass-Steagall that this sort of abusive practice in the lending and banking system would happen, and they repealed the act anyway.



    Have you had enough of this crap yet?

    Dodd is at the forefront of trying to "bail out" people. Oh yes, he filed a bill that would be "adverse" to some lender's interests, but his solution always seems to be "spend more public money", when you get down to it.

    The "Examining Proposals to Mitigate Foreclosures and Restore Liquidity to the Mortgage Markets" preamble from him is just one example; spend, spend, spend, and bloat up the FHA's balance sheet.

    That's nice.

    Now Mr. Dodd, would you please explain your "special" loan terms, and further, explain why we the people should put up with you filing bills to spend $300 billion in public funds that we do not have, along with exactly what sorts of conflicts of interest you and those around you in the House and Senate have in this regard?

    Perhaps you can tell us how you, as the Banking Committee Chairman and presumably highly-knowledgeable in matters of finance, could have possibly gotten this "deal" on your mortgages without realizing that they were in fact "special" terms that were not available to ordinary people - and further, how you could possibly not know that these "special terms" added up to a net benefit of more than $100, and were therefore not allowed under the Senate's Ethics Rules?

    I'd really like to know how you justify that, and I believe the rest of America would too.

    The former head of HUD? HUD pushed lenders to make "affordable housing" a priority, that is, to make subprime loans. Of course the bet was that the good times would continue to roll forever.

    Mozillo, by the way, took more than $100 million in 2007 out of Countrywide in stock options as his company's stock price and prospects were collapsing.

    I'd say his "Friends" program paid off quite well - for him.

    How well did it work out for his shareholders or the millions of American homeowners who either have been foreclosed upon or are now facing same?

    Do you remember how every time Angelo Mozillo showed up to "testify" on The Hill he was pitched softball after softball? Anyone remember his testimony months ago where Reps and Senators were literally apologizing for having him there and saying before they started asking questions that they were "not going to grill him"?

    Now you know why!

    Are you one of those people who got rammed up the chute by these lenders? Did you get a subprime mortgage? Did you pay points, closing costs, and a higher rate?

    Well guess what - "Friends of Angelo" apparently didn't, and some of them appear to have been the lawmakers and regulators that dealt with this company and were supposed to insure that the company didn't screw you as a consumer!

    Of course Dodd and others wasted no time denying they "asked for any special consideration." No surprise there. But that's not the test Mr. Dodd, as I'm sure you're aware. In case you've forgotten and can't find your copy, I included the relevant portion of the Senate Ethics Code up above.

    I believe the bottom line is clear - it certainly appears to me that you and a number of other people in Congress received a benefit that is a clear violation of Senate Ethics rules (and, I assume, the House's version of same) and as you sit as Chair of the Committee that is responsible for much of the regulation in this space this is a particularly egregious matter as it pertains to you.

    That conflict of interest is sufficient for me to call for your resignation.

    I want the truth on this, and that means a full federal investigation complete with subpoenas and public disclosure of who got these "Friends of Angelo" loans.

    All of them.

    Every last one.

    Haven't we had enough with William Jefferson (D-Lousiana) who was allegedly caught with $90,000 in "cold hard cash" in his freezer?

    He's still in office!

    As if that's not enough, it appears that "unnamed government officials" are "worried" about the reaction in the bond market to Lehman's ouster of two officials. See, normally default spreads (implied risk of bankruptcy) would widen, or increase. But yesterday, following the announcement, they instead contracted.

    Why is this important? Because it signals that Wall Street now believes that the government will prevent market failures - that is, bankruptcies - due to foolish acts, and also sends a clear signal to to the company that they can take risk with impunity, as they will be "saved" if necessary.

    Well golly-gee, this is a surprise after Bear Stearns? I think not.

    How do you fix this? Simple - a public statement that there is no government or Fed backstop on any institution beyond FDIC coverage, and an immediate withdrawal of the PDCF.

    Golly gee, that's difficult to figure out.

    Not.

    Heh, I wonder - did Bernanke get his mortgage from Countrywide's VIP program? Hmmmmm....

    Call Congress folks.

    Its your government.

    Take responsibility for it.

    http://market-ticker.denninger.net/archives/466-Wheres-The-FBI-Weekend-of-614.html
     
  2. Pandora

    Pandora Well-Known Member

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    This story makes me mad. I hate politicians; they are all so dang corrupt. and I don’t think any of them care about the citizens.

    Isn’t Chris Dodd on the short list for VP?
     
  3. KingBall

    KingBall New Member

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    Yes he is. It doesnt look so good for him now though (one would think).

    Where are all of the "outraged" democrats? Where's Pelosi and Read on this?
    If these were republicans doing this the selective "outrage" would be deafening for sure.
     
  4. Pandora

    Pandora Well-Known Member

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    This might make Dodd's chances better, the way politics are going these days. Pelosi will find a way to defend it all, and the Dem's will for the most part either ignore it or defend it. It's a given they wont get to worked up over it.

    I am fustrated enough to just want to give up caring. Everything in politics seems to be so unfair and sleazy.
     
  5. pocketfullofshells

    pocketfullofshells Well-Known Member

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    If it was under Bush, it would mean a promotion or a medal if you screw up...or a nice pardon....But I would say this could hurt Dodds chances, but not much, people dont care so much about this stuff outside people who realy watch. And I dont think he was high on the list anyway. Richardson, Biden are still my to favs to win the VP slot, but some have suggested someone out of the Military maybe.
     
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