Countrywide's 'VIP' loans to Washington insiders raise questions

[moh malekpour]

http://www.latimes.com/business/la-fi-countrywide14-2008jun14,0,3537897.story?page=1

The son of House Speaker Nancy Pelosi, Paul Pelosi Jr., has worked as a sales manager and loan officer for Countrywide in the San Francisco Bay Area and received about $1 million in loans from Countrywide on a condo. The younger Pelosi, 39, who holds a law degree and an MBA from Georgetown University, obtained a $916,000 mortgage from Countrywide in 2004 and a $114,500 line of credit the same year

 

[Bearslide]

Good link, Moh. But is anyone surprised? I wonder how many other lenders have "VIP" programs? I think the answer is probably most of them. It behooves lenders to keep palms greased, which in turn helps avoid scrutiny. The power brokers and money men all play in a pool far deeper than anyone can imagine.

 

[Mile High Trout]

Very politically charged argument. It's just that I don't want to see the banking industry getting subsidised like the airline industry. Seemingly kept alive on life support, by the taxpayers. Sometimes when one door closes, another opens. Why are bigwigs trying to bail out the homeowners distressed by banks, with taxpayer money, when they should force the banks to re-assess EVERY adjustable rate loan out there?!!!! I'm thinking proper federal intervention to the foreclosure crisis would be to mandate that banks re-assess EVERY adjustable rate out there, and be forced to roll-over new loans to homeowners, with a new set of minimum safeguards.
As for the VIP treatment the story alledges, I'm not convinced, rich people need loans too.

 

[Bearslide]

Very politically charged argument. It's just that I don't want to see the banking industry getting subsidised like the airline industry. Seemingly kept alive on life support, by the taxpayers. Sometimes when one door closes, another opens. Why are bigwigs trying to bail out the homeowners distressed by banks, with taxpayer money, when they should force the banks to re-assess EVERY adjustable rate loan out there?!!!! I'm thinking proper federal intervention to the foreclosure crisis would be to mandate that banks re-assess EVERY adjustable rate out there, and be forced to roll-over new loans to homeowners, with a new set of minimum safeguards.
As for the VIP treatment the story alledges, I'm not convinced, rich people need loans too.

I agree with you, Jeremy and have said the same thing. I do not understand why banks would allow homes to go to foreclosure rather than re-assess the loans. Problem is, in declining markets, they would find themselves with collateral worth less than what they lent on. I don't know how you would resolve that.

And yes, the rich need loans too. Where my concern lies is if Washington power brokers are getting special treatment, that would certainly sway them to turn a blind eye to the shenanigans of the lendijng industry. I have no problem with anyone, including our esteemed :icon_rolleyes: leaders in Washington, getting loans. I DO have a problem if they are getting those loans under more favorable circumstances than JohnQPublic in order to get their "good will". Would certainly explain why so few in Washington are willing to address the problems of the current mortgage meltdown. Somebody (and forgive me, I forget who now) used to have a tag line that said "shine a light on 'em and watch 'em scatter". I suspect that is what would happen if anyone took a close look at who lent what to whom and under what terms in Washington.

 

[DTB]

I don't think all John Q. Publics are getting the same terms are they?

This is the way our system works, sometimes unfortunately.

 

[Restrain]

Because they actually net more letting the homes go into foreclosure. Has to do with PMI insurance, write-offs, etc. All of our tax laws, don 'cha know.