The fact that he had to ask whether or not CW makes loans on those properties is indicative of how little he knows.

Countrywide had a rule to only to loan money to units of 4 or less. The loan officer knew that rule, but had to ask the CEO of Countrywide if it was ok to do it for his “Friend.”

Conrad has admitted he knew they waived that rule.

When you have oversight it’s improper to ask for ANY special deal, period. End of Story.

Conrad waived the budget rules in order to pass a bailout bill costing the taxpayers three hundred billion dollars.

It stinks to high heaven.

Conrad’s answered that much saying that he thought that waiving the 4 plex rule was no big deal.

Conrad, like Doodd knows he got preferential treatment.
I don’t know if it is illegal and charges will be presented. I doubt it since they are Democrats in Washington.
It stinks to high heaven and the voters in those two states should act accordingly.

What rate did they get? How did it compare to rates at the time? What was the par rate? Was there any YSP paid by the mortgage company to cover the costs of doing the loan? NOT charging a 1% origination fee isn’t proof of some “too good to be true” deal. I’ve done HUNDREDS of loans where that fee wasn’t charged.

Dodd looks like he is in serious trouble in the next Senatorial election in Connecticut. Looks like the people in his state know what is going on and he could pay a high price.
Just hope the good people in North Dakota also have a problem tolerating crooks.

Goon, I’m more than willing to believe that, but what are the specifics? Just not paying an origination fee wouldn’t be unethical. This happens ALL THE TIME for people who aren’t senators.

Goon, I’m more than willing to believe that, but what are the specifics? Just not paying an origination fee wouldn’t be unethical. This happens ALL THE TIME for people who aren’t senators.

But we don’t *know* if that is all kwim? His statements are all over the map….I didn’t get any pref treatment…I only had my origination fee waived….I thought it was just a frequent flyer discount…etc

If he had one consistent statement, then I would believe him, even if it was a “I screwed up” moment. The fact that he has changed his story multiple times, makes everything he says suspicious.

Bike Bubba,

No, I’ve been a mortgage broker for 7 years and I’ve not charged HUNDREDS of people orginations or less than 1% and I’ve charged many more up to around 3%. It has nothing to do with their status, it has to do with how easily I think I can get the loan done, how much work it’s going to be, how much I think they want the loan and what RATE they are getting which affects how much I get paid in YSP.

I’m not defending these Senators in the least. But I’d like to know what the specifics of the loans are before I can make an informed judgment of whether they got some benefit that others don’t.

Yes, but again…it is the changing story. Pick one and stick with it. At least two of them contradict each other, so it brings forth suspicions about ANYTHING he says kwim?

I don’t know anything about the case and am not making any assertions about Conrad’s truthfulness.

But if the discounts he got were available to the public under the same conditions, than he would not have done anything wrong, and it would not be “special treatment.” I think this is the argument he is making.

Tony, let’s walk through this. First of all, I’m glad to hear that in your case, status never interfered–however, given the politically driven nature of credit markets, i can’t assume this for everyone.

What we have here is a very interesting confluence of factors; two guys on the committee that handles bank/lending regulations personally know the head of Countrywide (outside of Congressional testimony), and they get a special deal on products that the company usually doesn’t handle–at the same time that the committee was considering actions that could have adversely affected Countrywide. There is also a witness who claims they knew exactly what they were getting into.

Now the witness isn’t a great one–he’s contradicting earlier testimony. However, at the very least, we ought to at least admit that Dodd and Conrad were guilty of very bad judgment if they never considered (while on that committee) why they might be getting such a good deal. (have they never heard of recusal?)

What we have here is a very interesting confluence of factors; two guys on the committee that handles bank/lending regulations personally know the head of Countrywide (outside of Congressional testimony), and they get a special deal on products that the company usually doesn’t handle–at the same time that the committee was considering actions that could have adversely affected Countrywide. There is also a witness who claims they knew exactly what they were getting into.

The fact that they are on the committee and recieved special rates is unethical, if you scratch my back I will scratch yours.
Of course Conrad thinks we are stupid and the media in ND will not question Conrad for fear of losing access to him plus they take his point of view is troubling.

I looked at your blogs do you have the rates they received in a post? If you do could you post the permalink or email it to me at passablyaffable@aim.com?

Mortgage points, sometimes called loan origination fees, are upfront fees based on a percentage of the loan. Each point is equal to 1 percent of the loan. The higher the points the lower the interest rate.

That isn’t the case. Paying points buys your rate lower. Origination fees are only tangentially related to the rate. They are two different things.

http://www.newser.com/article/d99n34jg1/ap-impact-loan-official-says-dodd-conrad-were-told-they-were-getting-vip-home-loan-deals.html

And I’m one who is predisposed to think they probably knew or should have known they got a sweetheart deal. I just want to know the facts to make that determination.

And I’m one who is predisposed to think they probably knew or should have known they got a sweetheart deal. I just want to know the facts to make that determination.

What are you waiting for these two bozo’s to admit they made a mistake. That isn’t forth coming. The fact remains is they are getting a way with questionable ethical dealings and they benifitted from something based on their position of power. I think both should be kicked to the curb. In ND this won’t happen because the press are lap dogs of Conrad, Dorgan and Pomeroy.

Goon, but how do you know they benefitted in some way without knowing what rates they got and what the par rate was?

Your attempts to minimize this are a waste of time.

Rob,

I don’t think Tony is trying to minimize the seriousness of the Dodd/Conrad mortgage deals with Countrywide so much as he is trying to establish more conclusively that there was a definitive quid pro quo. I too have done plenty of deals over the years where I have waived the origination fee, or other fees, and Tony is correct that such a decision is discretionary. A long-term client with a sizable portfolio of rental properties is obviously going to warrant some sort of special consideration, which is really no different than a volume discount offered by nearly every manufacturer or wholesaler. This is particularly appropriate where the mortgage loans are “no closing cost” loans where a more substantial YSP is used to cover the third party costs, as is common with investment properties.

There really is no way of knowing the extent of the Senators’ corruption here without access to the details of the loans, and a point of reference by which to make the comparisons. Copies of the HUD-1 Settlement Statements would go a long way toward clearing up the mystery. Which no doubt why the two Democrat Senators have not released them to the public. After all, if they have nothing to hide or to be ashamed of, why not release the HUD-1s and clear their names of any lingering doubt about their integrity?

On the other hand, what’s missing from the discussion so far is one of the Democrats’ favorite weapons when they are attacking perceived GOP malfeasance… the so-called “appearance of impropriety.” And in that regard, Dodd and Conrad are both guilty as sin, and ought to be gone from any public policy making role on that basis alone. There are damn few Democrats, and fewer Democrat office holders, whose notion of ethics wouldn’t embarrass an alley cat. But even dolts like these two should be able to recognize, however dimly, that the Senator who successfully filibustered against the 2006 GSE reform bill, and the Chairman of the Senate Finance Committee have no business appearing to roll between the sheets with Countrywide’s CEO for the price of a few shaved points and fees.

Congress or the Justice Dept. could subpoena the HUD-1 whenever they want to. That still wouldn’t tell us the rate.

Tony B,

True… though they could just as easily subpoena the Note too. And, of course, if Dodd or Conrad honestly thought they had nothing to hide, they could always release the closing documents themselves. And the fact that they don’t, excuses notwithstanding, is telling in itself.

There could be another way, however. It occurs to me that a simple FOI request could do the trick, given that BoA, which now owns Countrywide, has been the recipient of an enormous amount of government/taxpayer funds through TARP. If TARP funds make a company subject to other types of federal oversight and control, it’s not such a stretch to think that FOI might also apply. It would, in any event, certainly put more pressure on Conrad and Dodd to release the closing documents themselves.

I don’t think that all bank records are publicly available through FOIA just because they received TARP funds. You’re absolutely right that the Senators NOT releasing the documents is pretty telling.

The note, however, is probably available in the county in which the mortgage was filed. This would have the rate on it.

Rob,

A question: What size is the subject apartment property? Is it a single building or several, a duplex, a 4-plex? It makes a difference in determining the type of “deal” Conrad got from Mozillo.

Actually, the property consists of a pair of 2-story, 8-plex buildings.

This apartment is owned by GKC apartments. On his financial disclosure form he lists this as “Conrad Brother’s Partnership.” This property is assessed at $280,900. Since this building is a sixteen-plex the value of Kent Conrad’s official residence at $17,567.

The point is that such a property would not fit Fannie/Freddie Conventional guidelines, which at the time limited non-residential property to a single 4-plex. The in turn means that the normal par rate for a loan on such a property would have been between 150 and 200 basis points higher than that of a single-family primary residence. If a regular conventional mortgage loan was at 6.0% at par, a loan on this property would have been somewhere between 7.5% and 8.0% at par, or higher depending on a number of other factors (comps, cash flow and cap ratio, occupancy rate, and LTV).

Already, we can see that there is quite a bit of room for Mozillo to have given Conrad a “good deal” and quite a bit of wiggle room for Conrad to try to argue that he knew nothing was untoward.

It would also be interesting to take a peek at the senator’s tax returns. Is the “Conrad Brothers Partnership” a legitimate, legal partnership, an “S” Corp, or an LLC? Are there other properties? How many owner/principals are involved? How is the income from the property reported? Is Conrad actually paying himself rent for his “official residence”? And is the rent on a par with the other units in the complex and with other such apartment properties in the area? Does the Senator sub-let his “residence” during his extended absences in Washington? Is the mortgage on the property escrowed for taxes and insurance?

A lot of interesting questions once you start to look into this.

I’m not trying to muddy the water. If they waived the multi-dewelling requirement that it be no greater than 4 units, then that would be one of the specifics I’ve been asking for.

It’s been one of the specifics of this scandal for over a year now.

Pay attention.

How do you KNOW that? I’m not apologizing for him. I want to know the FACTS!

Because a) Robert Feinberg testified before Congress under oath saying that Conrad knew he was getting special treatment because he was a Senator and b) because there is an internal email that was quoted in the AP article where Feinberg emailed Mozilo to specifically ask if they could give the loan on his commercial property (the apartment building). Feinberg mentioned in the email that he told Conrad he was running it by the CEO.

Those are the facts, Tony.

Tony,

You’re a broker. When you’re cutting people special deals, do you have to run them by the CEO first? Do you get to bend the rules and give out loans that are normally forbidden on commercial properties just because someone is extra special?

If one of your clients asked you to make such a loan, would you call up the CEO and have him bend the rule?

That’s what happened with Conrad. This was just some 1% throw-away fee that low-level brokers get to fiddle with to make customers feel extra special. Conrad was given special dispensations from the CEO of the company because he was a Senator.

Your attempts to minimize this are a waste of time.