More Fallout from Countrywide Investigation

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Countrywide mortgage investigation: Reps. Buck McKeon, Elton Gallegly got loans

Two veteran House Republicans from California — Reps. Buck McKeon and Elton Gallegly — were among four congressmen who got mortgages from the now-defunct Countrywide Financial under a VIP program, the Wall Street Journal first reported on Saturday.

The House Oversight and Government Reform Committee has been investigating whether some members of Congress got discounts from Countrywide under its VIP program. The AP has reported that that four House members had received the VIP loans, and one of the four remains unidentified. The three identified congressmen, including Rep. Edolphus Towns, a Democrat from New York, told the Journal they were unaware their mortgages were sent to a special VIP unit of Countrywide or that they might be receiving special discounts.

A 1998 loan to McKeon, who is chairman of the Armed Services Committee, was for $315,000. Gallegly's 2005 loan was for $77,000.

McKeon's press secretary told the Santa Clarita Signal that "when Buck heard this, he was shocked." Alissa McCurley said her boss "did not know of a VIP program," and did not know then-Countrywide president Angelo Mozillo.

"He's trying to get to the bottom of this," the McKeon spokeswoman told The Signal. "He's really angry about this."

Longtime Ventura County congresman Gallegly announced in January he is retiring from Congress rather than shift districts due to redistricting.

A discounted loan could be considered a gift, which are banned under House rules. The AP reminds us that none of the lawmakers has been accused by the House Ethics Committee of any wrongdoing, and may never be if they convince investigators they had no knowledge of the discounts.

Some favored customers who were referred to a VIP unit were known as "Friends of Angelo" — a reference to chief executive Mozilo. In 2010, Mozilo agreed to pay millions in penalties in a settlement with the Securities and Exchange Commission. Countrywide, once the largest mortgage broke in the nation, played an enormous role in the sub-prime mortgage crisis, and has since been bought by Bank of America.

http://www.scpr.org/blogs/news/2012/01/15/4282/countrywide-mortgage-investigation-reps-buck-mckeo/