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Rivals for Florida governor attack over roles in mortgage crisis

Picking up a line of attack begun months ago by the Florida Republican Party, Bill McCollum is accusing his Democratic rival for governor, Alex Sink, of "deceptive loan practices'' while she was a top banker.

It's a risky political strategy, considering McCollum's history with the mortgage industry. As a member of Congress from 1980 to 2000, McCollum served on the committee overseeing financial services and co-sponsored 1999 legislation that tore down the Depression-era firewall between investment banks and commercial banks.

After he left Congress, McCollum lobbied for the Mortgage Bankers Association of America and for a nonprofit with a downpayment assistance program that was later outlawed by Congress after the Internal Revenue Service dubbed it a "scam."

At a Tampa fundraiser Wednesday, McCollum defended his lobbying and record in Congress, and he retreated slightly from linking Sink to the foreclosure crisis. She retired as head of Bank of America in Florida in 2000 and says she did not supervise mortgage lending.

"I'm sure she was a good banker, but she was president of now the largest bank we have a problem with in the state, back when at a time when some of this was just beginning to appear," said McCollum, the state's attorney general.

"Can I say that she had a hands-on role? I don't know, but I do know she was president then and I know today my office has more problems with mortgages that are not working right with Bank of America than any other."

Both McCollum and Sink parted ways with the banking industry years before the economic meltdown in 2008, but the finger-pointing is likely to continue as Florida leads the nation in foreclosures.

A Rasmussen Reports poll released Wednesday shows McCollum's lead over Sink, the state's chief financial officer, has shrunk from 11 percentage points to 5 percentage points in the last two months. The survey of 1,000 voters has a margin of error of 3 percentage points.

The governor's race has been overshadowed by the explosive U.S. Senate primary contest between Gov. Charlie Crist and former House Speaker Marco Rubio.

McCollum's campaign sought the spotlight Monday, striking for the first time directly at Sink's banking record. "ALEX SINK STILL DUCKING QUESTIONS ON HER ROLE IN ISSUING PREDATORY SUBPRIME MORTGAGE LOANS TO FLORIDIANS," blared the news release, which portrayed Sink as reaping millions of dollars on the backs of laid-off workers and scammed homeowners.

Sink has said she led the commercial, small-business and retail banking operations, while a separate corporation handled home loans.

"McCollum's attacks on Alex Sink have already been proved baseless and false, and are just an attempt to cover up his record as one of the most anti-consumer, anti-homeowner politicians Washington's seen in a long, long time," said Sink's campaign manager, Paul Dunn.

After he left Congress, McCollum was registered in 2002 and 2003 to lobby for AmeriDream, a leading nonprofit offering seller-funded assistance with mortgage downpayments.

Here's how AmeriDream worked: A seller made a donation to the nonprofit, which funneled the money to a low-income home buyer for a service fee. The seller typically recouped the fee by increasing the sales price.

The IRS accused seller-funded downpayment assistance programs of inflating housing prices.

The Federal Housing Administration stopped insuring AmeriDream loans in 2007, and the ban became law in 2008.

McCollum blamed the economic collapse on federal regulators and the expansion of government-backed lenders Freddie Mac and Fannie Mae into the housing market and noted he left Congress years before.

"I don't believe when I was there that we created the foundation in those years for the problems that came after I left in 2000," he said.

But on Wednesday, Republican Sen. John McCain proposed reining in Wall Street by resurrecting the Depression-era law that separated commercial and investment banking — the same law McCollum favored repealing as a congressman in 1999.

Times political editor Adam C. Smith contributed to this report.

Rivals for Florida governor attack over roles in mortgage crisis 12/16/09 [Last modified: Wednesday, December 16, 2009 10:51pm]
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