Countrywide used a special loan program to influence Washington policymakers. Listen to Republican Rep. Darrell Issa, Chair of the Oversight and Government Reform Committee, explain how the program led to the mortgage meltdown.
Buck McKeon's participation in the Countrywide mortgage scandal was uncovered by Rep. Darrell Issa during his investigation (see the report here, on Page 60). Buck got a sweetheart deal for his home loan. In exchange, McKeon would support policies for Countrywide that helped lead to the the housing crash of 2008. He made out like a bandit. Now it's time for Buck to pay it back!
In 1998, when Congressman Buck McKeon (R-CA) was trying to refinance his mortgage, Lobbyist Mike Farrell tipped him off to a special VIP home loan program for members of Congress. According to House Oversight & Government Reform Committee Chairman Darrell Issa (R-CA), the VIP loan program was offered by Countrywide Financial to “buy influence” from members of Congress.
Countrywide Financial CEO Angelo Mozillo personally oversaw McKeon’s VIP loan. In an email, Mozillo ordered the terms of the loan, saying “take off 1 point, no garbage fees, approve the loan and make it a no doc.” Between the 1% interest reduction and the garbage fees, Buck saved at least $4,000 on his loan, and probably more because it was a “no doc.”
Gifts like this are illegal. Federal law prohibits gifts
to members of Congress and House ethics rules forbid members from receiving gifts worth more than $50
or any gift from a corporation, like Countrywide.
The Issa report indicates that Buck was getting anxious about getting his loan. Then he voted to support a bill that Farrell was lobbying for to increase FHA loan maximums and Buck's loan was approved the very next day. Buck voted many more times for policies to help Countrywide; policies that helped lead us into the subprime mortgage crisis.
Thanks to the policies supported by McKeon, the housing market crashed in 2008, leaving Countrywide in shambles and causing many layoffs in our district. Countrywide was bailed out by the taxpayer under the Troubled Asset Relief Program, which McKeon also voted for.