Wednesday, January 18, 2012

on the Countrywide VIP program

Cummings also revealed an internal email at Countrywide from Brandt that alleges Mozilo's role in approving McKeon's loan.

"Per Angelo — 'take off 1 point, no garbage fees, approve the loan and make it a no doc,'" Brandt wrote to staff, according to Cummings' letter.

I have to say my gut reaction to this program and how it worked has always been that Angelo Mozilo wanted to keep lawmakers happy and that these were standard issue orders that may have been issued without the knowledge of lawmakers.  I'm no big fan of Mozilo or most politicians but my guess is that the politicos might have known they were being giving special service but not known they were getting a special deal.

I'm a small fry but I've had this happen to me.  Before I was in the title insurance business I was a mortgage banker.  I bought a house back in 88 and was surprised when I got to closing to find that the title insurance agent had waived their fees.  I objected and insisted that we pay the normal fees.  I'm sure you realize this was a RESPA violation.  My opinion of the title agent went down that day.  They had a hard time understanding my position as I believe this was normal procedure for them.  I had not asked for nor expected a special deal.

It's one thing to keep your eye on a VIP transaction to make sure it goes smoothly.  It's another thing altogether to give them a sweet deal that violates the law.


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