Countrywide Financial Corp.'s controversial "VIP" mortgage program made 153 loans to employees of Fannie Mae, the giant, federally backed financial institution that helped fuel Countrywide's growth, according to a letter released Monday by Rep. Darrell Issa.
Another 20 such VIP loans, which often provided mortgages on terms more favorable than those available to the general public, went to Freddie Mac employees, another big government-backed buyer of loans, the Issa letter said.
While it has been reported that VIP loans had gone to some officials at these enterprises, the latest information indicates the number of VIP loans to Fannie Mae and Freddie Mac officials was greater than previously known.
In an interview Tuesday, Mr. Issa said the new information provides further evidence that Countrywide Financial was improperly trying to "curry favor and get an edge" by passing out financial favors. He said the downfall of the two giant government-backed mortgage buyers, particularly Fannie Mae, was due in no small measure to troubled loans purchased from Countrywide, whose own financial problems led to its 2008 purchase by Bank of America Corp.
VIP program records subpoenaed last fall from Bank of America by the House committee have been the basis for Mr. Issa's recent disclosures on who received mortgages.
Mr. Issa's letter went to the Federal Housing Finance Agency, or FHFA, which oversees the operation of Fannie Mae and Freddie Mac following the 2008 federal takeover of the two troubled firms.
The letter is the latest salvo in a two-year-old investigation the California Republican has been spearheading into the Countrywide VIP program.
As the ranking Republican on the House Oversight and Government Reform committee, Mr. Issa has been trying to determine how many public officials received VIP loans and whether Countrywide used the program to try to advance improperly the company's interests.
As reported, Mr. Issa last week released a letter saying that the investigation had turned up 30 VIP loans that appeared to have been made to U.S. senators or Senate employees.
A Fannie Mae spokesman declined to comment on the Issa letter. Officials at FHFA and Freddie Mac couldn't immediately be reached for comment.
House investigators on the Countrywide VIP loan probe also released Tuesday an internal 2001 company email regarding a loan to Daniel Mudd, who served as Fannie Mae's chief operating officer and later chief executive. The email spoke of the need to "understand the sensitivity of this deal. We are already taking a loss, it would be horrible to add a service complaint on top and lose any benefit we generate."
While Countrywide's $3 million home loan refinancing with Mr. Mudd had been previously reported, internal details from the company about the matter hadn't surfaced. Mr. Mudd, who is now chief executive of New York-based Fortress Investment Group, couldn't immediately be reached for comment. In 2008, when the story about the loan surfaced, a financial adviser to Mr. Mudd said the executive was careful to ensure that the interest rate on the Countrywide loan was comparable to deals offered by other lenders. The adviser also said Mr. Mudd had sought his loan through Countrywide's normal retail lending channels.
Mr. Issa's letter to FHFA states that the subpoenaed Countrywide records show the Mudd loan went through the VIP program. It doesn't state whether Mr. Mudd knew which Countrywide unit was handling his loan.
The Issa letter said that a cluster of the VIP loans to Fannie Mae employees came in 1998, a year before that entity reached an agreement to buy billions of dollars of Countrywide loans. That agreement effectively linked Countrywide and Fannie Mae "at the hip," wrote Mr. Issa. If Fannie Mae or Freddie Mac employees accepted discounted loans or other preferential treatment, they might have violated the enterprises' conflict-of-interest policies, Mr. Issa wrote.
The Issa letter listed loans to about two dozen individuals at Fannie Mae and Freddie Mac, though in most of the cases it didn't provide names and didn't give the size of the loans. The letter did list job titles, which included several directors and vice presidents as well as lower-level positions.
The only names provided in the Issa letter were three former Fannie Mae chief executives that have already been publicly identified as having received Countrywide loans: Mr. Mudd, James Johnson and Franklin Raines. Like Mr. Mudd, Messrs. Johnson and Raines have consistently denied any wrongdoing in obtaining their loans.
The number of individuals receiving VIP loans at Fannie Mae and Freddie Mac were less than the number of loans given, since some people received more than one loan. For instance, if a person took out a Countrywide loan and later refinanced it that would could as two loan transactions.
