Lawmaker Goes After Ex-Fannie CEO Over Loan Deal

A Republican lawmaker is accusing the former chief executive of mortgage finance company Fannie Mae of being dishonest in testimony before Congress about discounts he received on his home loan.

Rep. Darrell Issa of California released documents Wednesday that he said showed former Fannie CEO Franklin Raines received special treatment in 2003 when he refinanced with Countrywide Financial Corp.

Countrywide, a lender at the center of the mortgage meltdown, was sold to Bank of America Corp. last year and has been the focus of allegations that it gave favorable loan terms to lawmakers and other key officials in Washington.

Issa, in a letter Wednesday to Raines' attorney, said the documents contradict Raines' testimony before a House committee in December.

In response to a lawmaker's question at that hearing, Raines said, "I am unaware of any preferential treatment" from Countrywide.

Raines' lawyer, Kevin Downey, said in a letter to Issa that his client refinanced twice in 2003 with Countrywide and "provided hundreds of pages of documents" to the congressman. None of them "support the inference that Mr. Raines was receiving, and knew that he was receiving, an inappropriately discounted loan," Downey wrote.

Downey also said Issa's letters failed to demonstrate that the rates Raines received were below the normal price for someone with a high credit score, adding that the loan "was apparently underwritten using standard procedures."

Raines, a prominent Washington figure who was President Clinton's budget director, resigned from Fannie Mae in 2004 after an accounting scandal. Fannie Mae and sibling company Freddie Mac were seized by federal regulators last fall.

The disclosure about Raines comes after Sen. Christopher Dodd, D-Conn., said last month he would refinance two personal home mortgages from Countrywide.

Dodd has acknowledged participating in a VIP program at Countrywide, which he said he thought referred to upgraded customer service and not reduced rates. He has said he was wrongfully labeled a friend of Countrywide's former CEO Angelo Mozilo.

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