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Old 06-25-2008, 06:45 AM   #37 (permalink)
aceventura3
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Location: Ventura County
Hey DC,

Given the pending legislation affecting the mortgage industry and recent disclosure pointing to potentially unethical conduct on the part of key members of Congress why is there no willingness for the openness in government you often write about? Check this out, from the editorial pages of one of my favorite biased right-wing publications, WSJ.

Quote:
On Monday, we published Mr. Conrad's letter clarifying that he called former Fannie Mae Chairman and CEO Jim Johnson for assistance in finding a mortgage. Mr. Conrad thought it important to note that he only asked Countrywide Financial CEO Angelo Mozilo for a loan after Mr. Johnson, who happened to be standing nearby, passed the phone to Mr. Mozilo.

Mr. Conrad then recounted how he came to receive preferential treatment from the country's largest mortgage lender. The Senator evidently believes that his latest version of events, in which he gets a sweetheart mortgage from a CEO only after first contacting the former CEO of the largest wholesale purchaser of home mortgages, somehow makes his conduct appear more appropriate. Our readers who aren't pals with Mr. Johnson might have a more acute sense of Beltway favoritism.

Meanwhile, Politico.com has contacted all 100 members to see how they received their mortgages, on what terms and from whom. Politico's Eamon Javers tells us that he has met with surprising resistance, with many Senate press secretaries claiming that such details are private. And in fact such details are private, due to a loophole in Congressional financial disclosure rules.

Senators John Cornyn and Barbara Boxer have offered an amendment to the current housing bill to require such disclosure, and in the meantime most lawmakers are reluctantly sharing the details. Still, as we went to press, Mr. Javers reported that 15 members of the Senate were still refusing to tell the stories behind their mortgages.
http://online.wsj.com/article/SB1214...w_and_outlooks

I would think those who really support "open" government would simply cooperate and disclose the terms of any mortgages they have given these circumstances. Why do they need legislation?

Seems like Illinois is taking legal action against Countrywide and its former CEO.

Quote:
The Illinois attorney general's office, which began an investigation into the business practices of Countrywide Financial Corp. last fall, says it has found enough evidence of wrongdoing that it plans to file a civil suit against the mortgage lender and its chief executive, Angelo Mozilo.

The suit is expected to be filed Wednesday.
[Angelo Mozilo]
Reuters
Countrywide's Angelo Mozilo

In a draft of the complaint, Illinois alleges that the company engaged in "unfair and deceptive practices" in the sale of mortgage loans. The 78-page document says the company loosened its underwriting standards, structured loans with "risky features" and engaged in "marketing and sales techniques" that incentivized employees and mortgage brokers to push loans whether or not homeowners had the ability to repay them.

The complaint says the company's actions were driven by its desire to boost market share and to satisfy Wall Street's appetite for mortgage securities. "Investor demand and secondary market valuation...became the primary concern when determining what kinds of loans to market and sell and at what price, rather than the consumers' ability to repay the loans," said the complaint.

Countrywide didn't return calls seeking comment.

In an interview, Illinois Attorney General Lisa Madigan said Countrywide "broke the law and we plan to hold them accountable for that." She added that Countrywide's actions have led to widespread foreclosures in her state and have wrecked havoc around the world. "The impact on individual homeowners and communities and the country and the global economy is unbelievable."

Ms. Madigan says she is asking that all Countrywide loans originated using "unfair and deceptive" practices be rescinded or modified in some way, even if Countrywide has to repurchase the loans. She is also asking that her office be given 90 days to review any loans that are currently in foreclosure or that are moving toward foreclosure. As part of its investigation, the Illinois attorney general's office interviewed about 30 former Countrywide employees and mortgage brokers and reviewed more than 100,000 pages of documents, Ms. Madigan said.

Mr. Mozilo was included as a defendant because he "participates in, manages, controls, and has knowledge of the day-to-day activities" of Countrywide, the lawsuit says.

Countrywide and its executives are the subject of numerous investigations by state and federal officials and legal actions by former employees and individual homeowners. Federal prosecutors are investigating whether executives at Countrywide committed securities fraud and, in securities filings, may have understated the risks of buying securities backed by Countrywide loans made to risky borrowers. The Securities and Exchange Commission is currently investigating stock trades by Mr. Mozilo.

If Ms. Madigan files a complaint against Countrywide as expected, it will be the first time that a state authority has made formal charges against the company for actions related to the current mortgage crisis.

Countrywide shareholders are expected to vote Wednesday to approve the purchase of the company by Bank of America Corp. The deal is scheduled to close July 1.
http://online.wsj.com/article/SB1214..._us_whats_news

This issue is not going away.
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