Report: L.A. grand jury probing Countrywide VIP loans
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The Wall Street Journal reports that a federal grand jury in Los Angeles is investigating the so-called ‘Friends of Angelo’ loan program at Countrywide Financial, under which influential borrowers received preferential terms on home loans.
The reported borrowers under the program have included U.S. Sen. Chris Dodd (D-Conn.), former Fannie Mae Chief Executive Franklin Raines, and California state appeals court judge Richard Aldrich.
Today’s Journal:
Countrywide loans on preferential terms to influential figures are the subject of a federal grand jury investigation in Los Angeles, according to people involved in the inquiry. Prosecutors subpoenaed records of many of the so-called ‘Friends of Angelo’ loans in August, lawyers and others familiar with the matter said. ... The VIP loan program was discontinued by Bank of America when it acquired Countrywide in July, Bank of America spokesman Dan Frahm said. Bank of America, which had no such program of its own, will cooperate with any legal inquiries, Mr. Frahm said.
Portfolio.com first reported the VIP program at Countrywide under then-CEO Angelo Mozilo (pictured). In some cases, Mozilo was personally involved in approving VIP loans. In the case of Judge Aldrich, a loan officer at Countrywide, Robert Feinberg, told Portfolio he alerted Mozilo that the credit line being sought was ‘above what guidelines allow.’ Mozilo responded, according to an e-mail obtained by Portfolio, ‘Go ahead and approve the loan, and close it as soon as possible.’
-- Peter Viles
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