The former Countrywide Financial Corp., whose subprime loans helped start the nation's foreclosure crisis, made hundreds of discount loans to buy influence with members of Congress, congressional staff, top government officials and executives of troubled mortgage giant Fannie Mae, according to a House report.
The report, obtained by The Associated Press, said that the discounts - from January 1996 to June 2008, were not only aimed at gaining influence for the company but to help mortgage giant Fannie Mae.Missing from this article is what might be called The Education of Angelo Mozilo starring HUD Sec'y Henry Cisneros. In 1993, readers may recall the Democrats held not only both houses of congress, but the presidency.
Cisneros told Angelo Mozilo (CEO of Countrywide Mortgage AND President of the Mortgage Bankers Assn) that that political fact of life meant that they had the power to extend the Community Re-investment Bank--1977 legislation that only applied to actual banks--to non-bankers lenders like him. Especially to opponents of 'sub-prime' and other unconventional home loans, of which Mozillo was perhaps the most vocal at that time.
To save the Democrats the trouble of doing that, said Henry, why wouldn't Mozilo and his fellows in the MBA, simply sign on to HUD's Best Practices Iniative. Which was the CRA in all but name.
Mozilo et al. got the message, and HUD was able to announce a slew of 'voluntary' acceptances of their BPI in ensuing years. Mozil, one might say, got the message, loud and clear; home lending was an intensely politicized business. If one wanted to participate, then one had to play both offense and defense.
None of which is can be found as backstory to the AP article above.
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