While I’m hearing tales of frustration from friends trying to get a mortgage – boy, have those bank vaults slammed shut recently! – we get news today that Jim Johnson, freshly-minted member of Democratic candidate Barack Obama’s Vice Presidential search committee, is resigning because it looks like he was a member of a suddenly-unpopular club: the "Friends of Angelo."
Angelo, of course, being Angelo Mozilo, the perma-tanned CEO of the nation’s largest lender, Countrywide.
The Wall Street Journal reported last Saturday that Mozilo may have given Johnson a good deal on a mortgage or two or three. No exact details given – and I haven’t received a callback yet from either Johnson or a Countrywide spokeswoman – but it was enough to make Johnson resign, issuing a statement this afternoon that reads, "I would not dream of being a party to distracting attention from that historic effort," he said. "I believe Barack Obama’s candidacy for President of the United States is the most exciting and important of my lifetime."
Johnson also adds that he has done nothing wrong, calling press accounts "blatantly false statements and misrepresentation."
For his part, Obama has denounced Countrywide repeatedly for its role in the subprime mortgage crisis, so it’s easy to see why even a whiff of scandal or back-room dealing or even too-close a handshake is enough to knock Johnson off the team.
But it just makes you wonder if there’s some big club of kingmakers, all scratching each other’s backs, giving each other sweet deals, that the rest of us muggins, putzes, simpletons, simple folk (whatever you want to call those of us on the outside looking in) can only dream of.
Reminds me of when Ameriquest was the biggest lender in America, when it was forced by the Attorneys General of every state in the union (and the District of Columbia, just for good measure) to make a $325 million settlement for all the borrowers it had ‘not’ wronged (since Ameriquest paid but admitted no wrongdoing). We reached out to Deval Patrick, who at the time was running for Governor of Massachusetts, to ask why, when he was with the Justice Department, Ameriquest was under scrutiny, yet once he left that job, he joined Ameriquest’s board. We’re still waiting for an answer.
Also reminds me that just a couple of weeks ago, the LA Times ran a story about a leaked Mozilo e-mail. Seems Mr. Mozilo, upon receiving an e-mail from a customer facing foreclosure, inadvertently hit ‘reply’ instead of ‘forward,’ and — oops! – this response whizzed right back to said borrower: "This is unbelievable. Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the internet. Disgusting."
You can say that again.