The joys of being a friend of Angelo Mozilo

Portfolio Magazine has the scoop on exactly how Washington insiders benefited from Countrywide's care and affection

Published June 13, 2008 4:12PM (EDT)

Still curious about exactly what kind of deals the "Friends of Angelo" got on their Countywide mortgages? Portfolio Magazine's Daniel Golden provides a wealth of information in a nice new piece of investigative reporting.

Two U.S. senators, two former Cabinet members, and a former ambassador to the United Nations received loans from Countrywide Financial through a little-known program that waived points, lender fees, and company borrowing rules for prominent people....

According to company documents and emails, the V.I.P.'s received better deals than those available to ordinary borrowers. Home-loan customers can reduce their interest rates by paying "points" -- one point equals 1 percent of the loan's value. For V.I.P.'s, Countrywide often waived at least half a point and eliminated fees amounting to hundreds of dollars for underwriting, processing and document preparation. If interest rates fell while a V.I.P. loan was pending, Countrywide provided a free "float-down" to the lower rate, eschewing its usual charge of half a point. Some V.I.P.'s who bought or refinanced investment properties were often given the lower interest rate associated with primary residences.

Golden also provides new detail on the specific breaks lavished on James Johnson, Obama's now-departed veep vetter. One example -- in 2004, Johnson borrowed $3 million from Countrywide -- "Although the size of the loan exceeded Countrywide's limit for a second home, Mozilo told an employee to 'do the deal.'"

The news that rich, powerful people received special care and handling on their Countrywide mortgages is hardly shocking. And perhaps we can even take Senator Chris Dodd, former HUD secretary Alphonso Jackson and James Johnson at their word when they say they never asked for special treatment, nor even knew they received it. Such perks just come with the office. Business as usual.

A swarm of Salon readers took issue with my posting on Johnson on Wednesday -- one even suggested that I was an "AIPAC hack" -- absurdly implying that I was attacking Obama on the Johnson issue because he is insufficiently pro-Israel. I have to confess that I'm a bit befuddled by this. As I noted Wednesday, the Johnson affair is a minor peccadillo compared to the conflicts of interest that abound in the McCain campaign, starting with former Senator Phil Gramm and working their way down. But there's still a fundamental issue here: the spectacle of powerful Washington insiders getting fondled by corporate interests is unseemly and undemocratic. Barack Obama has pledged to change the culture of Washington. It won't be easy. Heck -- it's probably impossible. But dropping Johnson from his campaign was a gesture in the right direction, even if it took a few days to accomplish.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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2008 Elections Barack Obama Globalization How The World Works Mortgage Crisis