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Dodd Thought "VIP" Status was "Just A Courtesy"
Senators Chris Dodd (D-CT) and Kent Conrad (D-ND) are still fending off questions about special-rate loans they received from Countrywide Financial.
Countrywide's been at the center of the mortgage meltdown, and the GOP is cranking up the pressure on the two Democratic lawmakers.
Dodd told reporters yesterday that a loan officer specifically told him and his wife they were getting "VIP" consideration in 2003 when they took out two loans on their Connecticut home and Capitol Hill townhouse.
But Dodd said he didn't think to ask precisely what that meant. Even though he is chairman of the Senate Banking Committee, which oversees the mortgage industry, Dodd said he "assumed" that "it was more of a courtesy thing."
From the New York Times.
"Somebody told you you were in a V.I.P. program," a reporter said, "And you didn't think you were getting ... "Mr. Dodd cut off the reporter and finished the question himself. "A special deal on a loan?" the senator asked. "No."
According to Portfolio, which broke the story last week, the lower rates Dodd received saved him "about $58,000 on his Washington residence over the life of the loan, and $17,000 on the Connecticut home."
Calculating the exact benefit is a challenge, and some suggest Dodd's perk was far less. The Washington Post reports:
Dodd borrowed $506,000 at 4.25 percent to refinance a Capitol Hill townhouse, originally purchased in 1999, and $275,042 at 4.5 percent to refinance a home in East Haddam, Conn.Rather than requiring him to pay the full amount to obtain the reduced mortgage rates, as other customers must, Countrywide waived three-eighths of a point, or about $2,000, on the first loan and a quarter-point, or $700, on the second.
Meanwhile, Sen. Conrad has moved quickly to quell the criticism. Through the special program -- known as the "F-O-A program", or "Friends of Angelo, named for Countrywide CEO Angelo Mozilo -- Conrad got a good deal on loans for both a Delaware beach vacation home as well as an eight-unit investment property he owns in Bismarck with his brothers.
Conrad said he gave $10,700 to Habitat for Humanity to compensate for any benefit he may have received on the vacation home loan. And this week, he said, he paid off the final $32,000 on the investment property.
Conrad spoke to Mozilo about his mortgage in 2002, but the deals under scrutiny were not finalized until 2004. Yet like Dodd, Conrad also said he was unaware of any discount. "I had absolutely no clue they had done that," he said yesterday.
"My conscience is absolutely clear," he told the Times.
Reh.
Lest we forget in 2004, Senator Rick Santorum landed a home loan from a private (read wealthy person's "wealth management") bank in Pennsylvania.
Patrons of this bank had to have significant investments in order to have an account there (Santorum did not).
Remember this?
http://citizensforethics.org/node/22905
But somehow he landed a loan anyway. And nothing happened.
Comparing Dodd to Santorum is offensive, but the transgression appears to have been done in many different ways.
June 18, 2008 1:10 PM | Reply | Permalink
Screw You Dodd....you should do something about credit companies charging 29.9% APR because some farking Utility company sent a 143 dollar late bill to collections.
You fucking assholes suck..every goddam one of you.
June 18, 2008 1:11 PM | Reply | Permalink
Dodd's changes at the VP or at a cabinet slot get flushed down the toilet thanks to a "courtesy".
This same corporate whore (who I really liked at one point in this race) in FDR's clothing was the son of a prominent politiciian failed by scandal and corruption.
Pigs get fat and hogs breed before getting slaughtered.
June 18, 2008 1:41 PM | Reply | Permalink
Senator Dodd,
Could you please do a "courtesy" for consumers that are struggling? How about supporting that Creditcard Holders Bill of Rights bill that was introduced in the House by Rep. Maloney.
How would you like it if that courtesy rate of 4.25% was suddenly increased to 20.99% without any recourse?
How nice that your top campaign donors are Citigroup, Bear Stearns, AIG, JPMorgan Chase, Goldman Sachs, etc. No conflict of interest there I'm sure.
June 18, 2008 2:15 PM | Reply | Permalink
As much as I like to kick politicians who stick their nose in the special interest trough, this is really pretty small stuff.
Anybody with a good credit rating and savvy enough to negotiate can get similar concessions from most lenders.
If anything, Countrywide tried to give the impression they were doing him a good turn, when it was really just business as usual.
June 18, 2008 2:16 PM | Reply | Permalink
I concur. The Portfolio article says Dodd got two 5/25 ARM loans in 2003 (i.e. fixed rate for the first 5 years, floating after that). Wholesale rates for such conforming loans in that year ranged between 3.38% in mid-June to 4.92% in early September, and they averaged 4.295% for the whole year. Now consumers don't get loans at wholesale rates, but by shopping around you can get closer, and you can even get lower rates by paying enough points.
The benefit Dodd apparently did get was having some points on his loans waived, saving him a little under $3,000. Without knowing when he locked in the rate for his loans, we can't know for sure whether he got a below-market deal.
I don't see this as a serious ethical breach, and Dodd's claim that he didn't know he was getting special treatment certainly appears plausible based on market rates for mortgages in 2003. Certainly some "regular" borrowers got better rates during 2003 than Dodd did on the same type of loan. He probably did get a deal, but sometimes motivated lenders will rebate some points to close a deal, especially if they fear you'll take your business elsewhere.
June 18, 2008 2:44 PM | Reply | Permalink
The $5,796,000 Dodd received from "the securities and investment industry" should have already disqualified him as a VP candidate
June 18, 2008 3:07 PM | Reply | Permalink
Just being sort of a "poor man's Teddy Kennedy" should disqualify him from Veep consideration.
That and his less than 1% showing in Iowa this February, after moving his family there and spending months campaigning. Impressive.
June 18, 2008 3:51 PM | Reply | Permalink
We don't really know that because according to "Maxed Out" credit reports for politicians, judges, and other VIPs are kept in a separate database and treated "very special."
Meanwhile the credit agencies keep messing with regular consumers credit data, and we don't ever get offered those "courtesy" deals.
June 18, 2008 4:01 PM | Reply | Permalink
I am usualy as skeptical of politicians as anyone but I think Dodd is telling the truth.
June 18, 2008 4:37 PM | Reply | Permalink
Oooh. Heavens. The corruption!!
I guess this is a good oppurtunity to draw out the Republican trolls and dipshits as we already see plenty in the thread with the manufactured outrage.
btw, of course Dodd, or any celebrity with huge earning potential gets better rates. (Duh!) It's because loaning to them is near zero risk and they can shop around for the lowest rate. And in 1999 rates were already incredibly low.
Think people. I know it's hard, but try.
June 18, 2008 4:52 PM | Reply | Permalink
I hate it when politicians I like, such as Dodd and Conrad, are discovered to have taken part in some controversial action, then they explain it to the public like we just fell off the turnip truck.
Dodd and Conrad are intelligent, well educated and experienced people, they knew what they were getting.
June 18, 2008 6:07 PM | Reply | Permalink
It's not unethical for Dodd to receive VIP attention and service throughout his loan process. The question is did he receive a loan with a better rate, better terms and costs not available or not offered to everyone else? It seems to me the problem is with Countrywide. Have they violated the Equal Credit Opportunity Act?
June 19, 2008 6:25 AM | Reply | Permalink
So Conrad will take a reduction in taxable income for charitable contribution for a gift he didn't know he was getting that now appears tainted. Doesn't that mean he's still getting a favor he didn't ask for and now claims he doesn't deserve?
June 19, 2008 9:31 AM | Reply | Permalink
Why badger Dodd and Conrad for a little corruption?
It’s not like they use slogans like “corrupt republicans” as a campaign issue, that would be hypocritical, isn’t it the right of ANY Chairman of the Banking Committee (if he’s a democrat) to take advantage of his position? Isn’t that what the position was created for? And claiming ignorance of the process MORE than qualifies him to be in charge of oversight. And compassionate ole Conrad, gave to Habitat for Humanity for the sins he didn’t commit… tisk tisk….
"My conscience is absolutely clear," he (Dodd) told the Times…and his wallet much fatter…
June 19, 2008 10:27 PM | Reply | Permalink
Ridiculous. If I were in their position and anyone mentioned any sort of special deal for me, I'd like to think I would just say, "No, thanks. Just give me what you would any other borrower in my position." Then I'd have my accountant review it. For Godsakes, these guys are millionaires--mostly thanks to the electorate putting them into positions of power and stewardship. Why would they waste their time with this petty $h!t? A $2,000 favor is worse than a $2,000,000 one because it makes you look like you sellout cheap.
June 20, 2008 10:41 AM | Reply | Permalink