Report: NY lawmaker bars push for records at mortgage lender used to buy house in Lutz
Wake up and good morning. Follow me on this one. An influential U.S. House lawmaker -- involved in pushing Bank of America Corp. to explain why it did not disclose ballooning losses at Merrill Lynch & Co. ahead of a shareholder vote last December -- has turned down a separate effort to subpoena records of a "VIP" mortgage program allegedly catering to powerful people at Countrywide Financial Corp.
Both Merrill Lynch and Countrywide are now owned by Bank of America.
The lawmaker, Edolphus "Ed" Towns of New York-- a powerful Democrat who chairs the House Committee on Oversight and Government Reform -- refused a Republican's call to subpoena Countywide records, even though Towns received two home loans from the lender, the Wall Street Journal reports. (Towns photo from AP.)
Now I would not bore you with the incessant political bickering on this matter except for one thing. Towns may represent New York and have a home in Brooklyn, but the Countrywide loans in question are for a Hillsborough County house Towns purchased in 1997 and later refinanced -- at 4304 Hawks Nest Drive in Lutz, Fla. Check out some details on Towns's 2008 financial disclosure form here. Hawk's Nest is a classic Florida street of nice looking, one-story single family homes with cookie cutter spanish style design. The Wall Street Journal online story includes its own photo, however, of a three-story house it claims is the Lutz home in question. Really? If that's the house, it's not the one identified on Towns's disclosure form. And it's not the one we're looking at on Hawks Nest via Google Map's street level photos.The Wall Street Journal paper edition appears to show the correct house.
The implication of the Wall Street Journal story is that Towns is happy to press Bank of America over its poor handling of its Merrill Lynch purchase -- a deal done under federal pressure during last fall's Wall Street meltdown. But he is not willing to shed more light on an alleged "VIP" mortgage program at Countrywide that catered lower-than-market rate loans to well placed politicians and others. The VIP program was reportedly operated under former Countrywide CEO Angelo Mozilo (in photo from AP) -- now a poster child for a mortgage market run amok -- and a program known within the company as "Friends of Angelo."
As for Rep. Towns, he indicates there are other government investigations of Countrywide under way, including a Justice Department criminal probe. The Senate Ethics committee is also investigating because two Democratic senators, Chris Dodd of Connecticut and Kent Conrad of North Dakota, received loans through the VIP program. Both men have denied wrongdoing and said they never asked for favorable loan terms from Countrywide. Some Republican government figures also received VIP loans from Countrywide.
The Journal story says Towns's mortgage for the Lutz home was handled by the same California loan officer, Silva Momjian, and the same branch office "850" as other so-called VIP loans. Towns's staff told the Journal the initial interest rates on two five-year, adjustable-rate Countrywide loans Towns and his wife took in September 2003 were 4.5 percent and 4.625 percent. That's just under the average rates nationally on such loans at the time of about 4.7 percent to about 5.3 percent, the Journal notes.
It was possible for very creditworthy borrowers to qualify for a better-than-average rate without having participated in the VIP program. If Towns' loans did go through the VIP unit, the Journal acknowledges, it is also possible his application was routed through that operation without his knowledge.
Big scandal or a whole lotta nothing? Perhaps it's too soon to say, though this Friends of Angelo program bears more scrutiny. At the least, Congressman Towns, a belated welcome to the Tampa Bay area.
-- Robert Trigaux, Times Business Columnist