End of an era at Countrywide Financial

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News item: The Bank of America purchase of Countrywide Financial has closed, bringing the lender’s life as an independent company to an end. The New York Times values the deal at about $4.35 per Countrywide share, or about $2.5 billion. The deal was originally valued at $4.1 billion when it was announced in January, but Bank of America stock has declined quite a bit since then, decreasing the value of the buyout. Hey, things happen.

Relatedly, the Los Angeles Times peels back the onion a bit more on Countrywide’s VIP loan program, reporting on one borrower who ‘says he sought no favors.’ Commenter Sheila pointed this out earlier today, arguing it calls into question previous reports here and elsewhere about various prominent Democrats who enjoyed special Countrywide attention. Or, as Sheila put it, ‘that might mean that all the Democrats you swift-boated in this blog might not be completely corrupt after all.’

I’ll agree they’re not ‘completely corrupt,’ but I believe the story that they received special treatment is important and revealing. It reveals that prominent members of Congress receive special treatment. In my world that’s news. So Sheila and I disagree. I would say we disagree respectfully, but I don’t want to put words in her mouth.

But I digress. The most interesting thing about this latest glimpse into the VIP loan program at Countrywide is the story of the loan in question: A guy borrows less than $1.2 million to buy a house in the summer of 2004. Four months later, Countrywide appraises the same property at $1.5 million -- up more than 25% in four months -- and refinances two original loans so that the borrower can cash out $156,000 in home equity. Who was the borrower? Ross C. DeVol, director of regional economics at the Milken Institute, a Santa Monica think tank. Now that’s appreciation. And customer service. Through a spokesman, DeVol told the Times he never asked Countrywide for any favors.

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com.
Photo Credit: Countrywide co-founder Angelo Mozilo, by Getty Images