Wednesday, June 18, 2008

Dodd’s Implausible Admissions

The admissions made by U.S. Sen. Chris Dodd concerning his preferred mortgage loan from Countrywide – now under investigation for unorthodox business practices by, among others, Dodd – are not likely to satisfy curious minds.

The charge against Dodd is that he had received special treatment on his mortgage loan in part because of his status as the chairman of the Senate banking committee.

In at least two comments made to a Hartford Courant reporter, Dodd indicated there was no special treatment.

The lead paragraph in the most recent Courant story discloses:

“Sen. Christopher Dodd admitted today that he and wife were told during their 2003 loan process with Countrywide Financial Corp. that they were being included in a special VIP program -- but the senator said he interpreted that as a benefit for being a longtime Countrywide customer -- not as special treatment because of his Senate position.”

“He also insisted again today, in two separate news conferences, that even though he was told he was in this VIP program, he did not receive a special deal on his family's two home mortgages, as suggested in media reports last week. He also said that his loan refinancing was handled through a regular loan officer.”

As Daniel Patrick Moynihan used to say: You are entitled to your opinion on the facts; you are not entitled to the facts.

According to Portfolio, a Conte Nast publication, Dodd’s denial is highly misleading.

Portfolio’s examination of Dodd’s role in mortgage-gate is now more than a week old. Dodd, chairman of the Banking Committee, according to the Portfolio story:

“… received better deals than those available to ordinary borrowers. Home-loan customers can reduce their interest rates by paying ‘points’—one point equals 1 percent of the loan’s value. For V.I.P.'s, Countrywide often waived at least half a point and eliminated fees amounting to hundreds of dollars for underwriting, processing and document preparation. If interest rates fell while a V.I.P. loan was pending, Countrywide provided a free “float-down” to the lower rate, eschewing its usual charge of half a point. Some V.I.P.'s who bought or refinanced investment properties were often given the lower interest rate associated with primary residences.”
In the Courant story, Dodd willingly admits he was included in a Friends of Angelo (Mozilo) scheme but insists he was included in the program without his knowledge:

“’As rates were coming down, we decided to do what millions of Americans did -- we refinanced our home,’ said Dodd, chairman of the powerful Senate banking committee that watches over the mortgage industry. ‘As you shop around, you negotiate,’ he said. "I never spoke to anyone but loan officers.’”

“’It wasn't a special deal,’ he said, pointing out that the interest rates they secured were ‘well within the band of rates being offered across the country.’”
Since Dodd, one among a list of FOA’s (Friends of Angelo’s), had insisted that he spoke only to a loan officer and not directly to Mozilo, and since he now admits that he and his wife, Jackie Clegg Dodd, were told that they were included in the special VIP program, it seems obvious that this information came to the Dodd’s through the as yet nameless loan officer.

Reporters must be wondering what that conversation was like. At some point they may find out. It is common practice in some companies to record such conversations for the benefit of clients.

The notion that someone is shoving dollars in savings into one’s pockets in such a way as to leave the beneficiary of such attentions unaware of the favor is highly implausible. The special benefits afforded the powerful chairman of the U.S. Senate Banking Committee were different, according to the Portfolio story, than those received by “Joe Lunch Pail,” now struggling to pay taxes that will increase substantially because of a tax supported bail out of companies like Countrywide that is staunchly supported by Dodd.
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