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Countrywide Loans Sought Favor With Fannie Mae, Report Says
Countrywide Financial Corp. gave discount loans to former and current members of the U.S. Congress and executives at Fannie Mae (FNMA) as it lobbied to scuttle legislation that would have diminished its sale of sub-prime mortgages, according to a report released today by House Oversight and Government Reform Committee Chairman Darrell Issa.

The report, which caps a three-year inquiry by the panel, concluded that between 1996 and 2008, Countrywide executives used a special VIP loan program to try to stop legislation that would have restrained the company’s business with Fannie Mae, a government-sponsored mortgage company. Countrywide had an exclusive agreement to sell billions of dollars in mortgages to Fannie Mae at a discounted rate, according to the report....

...Jim Johnson, chief executive officer of Fannie Mae from 1991 to 1998, earned $100 million during his time at the company. Nonetheless, Countrywide employees expressed concern about giving him a loan because he didn’t pay his bills regularly and had a low credit score, according to e-mails published in Issa’s report.

Because of Johnson’s credit report, “I’m concerned about signing on these loans,” Countrywide underwriter Gene Soda said in a 2005 e-mail to another Countrywide employee, according to the report.

Countrywide’s chief executive officer, Angelo Mozilo, who had a close relationship with Johnson, wrote back, instructing his employees to give Johnson a loan “1/2 below prime.”

“Don’t worry about” the credit score, Mozilo wrote. “He is constantly on the road and therefore pays his bills on an irregular basis but he ultimately pays them.”
In another e-mail, Mozilo wrote, “Jim Johnson continues to be a source of many loans for our company and this is just a small token of appreciation for the business that he sends to us.”...