Wall Street Journal calls for investigation of ‘friends of Angelo’ loans

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The Wall Street Journal -- correctly, it says here -- today is pushing Congress to investigate the ‘friends of Angelo’ loan program, under which members of Congress including Sen. Chris Dodd (D-Conn.), at right, received special treatment and special loans from Countrywide Financial.

This is the same issue that brought down Obama campaign adviser Jim Johnson, another recipient of personal attention from Angelo Mozilo and Countrywide.

The Journal’s editorial page this morning: ‘What did Countrywide CEO Angelo Mozilo receive –- or think he would receive –- in return for the friendly loans to politicians? And what did Mr. Mozilo get –- or think he would get –- in return for sweetheart loans to Fannie Mae CEOs Jim Johnson and Franklin Raines?’ (Link credit: LA Biz Observed)

The Journal brushes off the so-called ‘ostrich defense’ employed by another Countrywide borrower in the Senate, Kent Conrad (D-N.D.), who oddly told reporters he had never met Mozilo -- even though he had talked to Mozilo on the phone about a loan. ‘For what other reason, besides preferential treatment, would one call the CEO of the mortgage company? Does Mr. Conrad call August Busch IV when he wants to buy a six-pack?’

Also offended by Conrad’s awkward dance of denial is one of my favorite real estate bloggers, Diana Olick of CNBC: ‘So am I to believe that these high-ranking senators and a former Fannie CEO didn’t read their loan documents to figure out that they were getting a special deal?? Did they not know enough about how mortgages work to figure it out? And why would Mozilo give these folks a special deal if he didn’t expect them to at least know about it??

‘The senators are claiming they had no idea. Come on. I realize I’m supposed to accept that all those subprime borrowers didn’t understand their loans, but to accept that these well-educated leaders of our government didn’t -- well that insults my intelligence, and every borrower’s out there.’

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