I found an article very interesting today concerning the mortgage market that I just have to share.  As many of you are aware, James Johnson, head of Senator Barack Obama’s vice-presidential selection committee, stepped down this past week because of conflict of interest in business dealings.  What I hadn’t heard it that it involved dealings with our own dear Angelo Mozilo of Countrywide.  Ah, the plot thickens…

It seems that when Senator Kent Conrad of North Dakota wanted a mortgage for his beach house, he went to Johnson, who hooked him up with Mozilo.  Mozilo, good old boy that he is, bent the rules a tad to give Mr. Conrad a good deal on 2 separate loans from Countrywide.  Those 2 loans are now at the center of a wider spread number of loans being scrutinized by those in power who want to know.

Allegedly, the folks - members of Congress, the cabinet and celebrated advisers all, were a part of Countrywide’s “VIP” circle, or cutely nicknamed “Friend of Angelo”.  Friends, indeed.  The pols got breaks in the form of 3/8’s to 1 point, amounting to a nice little sum of money over the life of the loans.  As is typical of the Beltway, none of these folks were aware that Countrywide was giving them an unethical deal at best.  Yeah, right.

Even Senator Christopher Dodd was a “Friend of Angelo”, getting preferential treatment for his two Countrywide loans.   Mr. Dodd released a statement saying that “As a United States senator, I would never ask or expect to be treated differently than anyone else refinancing their home.  This suggestion is outrageous and contrary to my entire career in public service. Just like millions of other Americans, we shopped around and received competitive rates.”  I have to think that a Senator who is chairman of the Senate Banking Committee and a leader in the effort to help homeowners caught in the mortgage crisis wouldn’t
know that the mortgage he was receiving was a whole lot better than anyone else was getting.  If not, Lord help us all.  We are doomed, for sure.

Much of this was brought to light by Portfolio.com, the Web site of the business magazine Portfolio.  They cite internal documents giving all the juicy details, and even to a guy like me who knows little about the mortgage market, it is plain to see that these people were given a very good break on mortgages. That list is quite long, I might add, including such notables as Alphonso Jackson and Donna E. Shalala.  I am curious to see what Senator Obama, the presumptive Dem candidate for president, has to say about Mr. Dodd, who is on his short list for Veep.  If nothing comes of it, you can rest assured that a lot of s**t has been shoveled under the carpet.