The VIP Treatment: Countrywide CEO Offers Better Rates for Prominent Few

Senators Chris Dodd and Kent Conrad reportedly received favorable rates on loans

ByABC News
June 13, 2008, 9:55 AM

June 13, 2008 — -- Friends of Countrywide Financial CEO Angelo Mozilo and other high-profile individuals had their home loans handled by the company's VIP desk, where a team of loan officers would work out favorable terms in conjunction with Mozilo, according to two former Countrywide executives.

"Celebrities get their loans from somewhere," said one former executive who likened the favorable loans to employee discounts. "That desk handled loans for people who were referred by executives. The way that it would customarily work is he [Angelo] might call in, 'What can we do? What are we charging on this or that?' and then tell [his friend] 'I'll get you that at X. Don't worry. I'll get you the loan."

Some of the beneficiaries didn't even know that they were receiving special benefits; others may have been aware that they were receiving some kind of discount, according to the former executives. Internally, those whom Mozilo favored for special treatment were referred to as "Friends of Angelo." The executives say that he was in frequent contact with the company's VIP desk.

Those VIPs who received loans through the program that waived points, lender fees and company borrowing rules included Senators Chris Dodd and Kent Conrad, former HUD Secretary Alphonso Jackson, former HHS Secretary Donna Shalala and former UN ambassador Richard Holbrooke, according to Conde Nast Portfolio magazine.

For these VIPs, Countrywide would reduce the interest rate on their loans by waiving at least half a point and eliminating fees for underwriting, processing and document preparation, reports Portfolio.

Senator Dodd reportedly received two loans in 2003 through the program, borrowing $506,000 and $275,042 to refinance homes in Washington and East Haddam, Connecticut. Countrywide waived $2,000 on the first loan and $700 on the second, according to Portfolio.

Since 1997, Countrywide has contributed $21,000 to Dodd's campaigns. During his presidential campaign last year, Dodd introduced legislation to ban practices reportedly used by loan officers at Countrywide _ charging prepayment penalties and steering buyers to costly loans.