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Countrywide Financial Corp.'s VIP loan program offered favorable loans to members of Congress, government officials, and Fannie Mae executives in order to buy influence for more than a decade, according to a new report by the House Oversight and Government Reform Committee expected to be released Thursday.
More than a half-dozen current and former lawmakers received mortgages through the VIP program, including Senate Budget Committee Chairman Kent Conrad, details Politico.
The fallen subprime lender expanded the program into Congress after legislators and staffers complained to the company's lobbyist about their loans with the company, the Wall Street Journal reports. The VIP loans were commonly offered to the company's employees and their relatives, as well as to hundreds in or associated with the government. Their benefits: lower interest rates and fees, as well as faster service.
The VIP program spanned from 1996 to 2008. The company's program boosted not only its own congressional influence but also helped Fannie Mae shake off an increase in government regulation. According to the AP, the report reads: "In the years that led up to the 2007 housing market decline, Countrywide VIPs were positioned to affect dozens of pieces of legislation that would have reformed Fannie." It adds that "Countrywide's effort to build goodwill on Capitol Hill worked" until the collapse of the housing market.
Bank of America purchased the lending company after its subprime lending activities helped to unravel the 2008 financial crisis. The bank stopped the cut-rate loan program, according to the Journal, and has been cooperating with the congressional investigation.