Bank Of Countrywide Lynch To Get Subpoena Over Preferrential Lending Terms
Bank of America is really unable to catch a break. The latest kick in the groin comes courtesy of the Chairman of the House Oversight Committee Edolphus Towns, who has announced he will launch a subpoena into whether Countrywide gave "favored terms to lawmakers and other VIPs." Concurrently, a panel is evaluating predatory lending practices at a variety of different banks. Some of the firms that will be told to provide information include Wells Fargo, JP Morgan, Citigroup, US Bank and GMAC.
In a letter dated October 23 to the banks, Towns asked for data on VIP-type programs, foreclosures, marketing strategies, and potential anti-trust behavior.
The letter asks for information on whether attempts were made by lenders to identify whether loan applicants had regulatory authority over them. It also asks for details on the types of mortgages offered and sold. Also, it asks whether the companies helped draft legislation or regulatory language to propose to federal or state officials.
"The actions of mortgage lenders contributing to the foreclosure and financial crisis are of serious concern to many Americans and to the members of this committee," Towns said.
Ironically, Towns himself may well have been the recipient of Angelo Mozilo's preferential generosity (if not Agent Orange-strength tanning lotion), after having received two loans from the lender. Previously it was rumored that certain politicians were stalling this inquiry for fear of what may be uncovered. Towns had previously "rebuffed calls by the top Republican on the panel, Darrell Issa, to demand documents from Countrywide."
The pending receipt of disclosure is the reason why yesterday's hearing with Bank Of America Directors and Mary Schapiro has been delayed indefinitely: a surprising development in light of all the information that is expected to be revealed.
For more perspectives on this matter read the following by Karl Denninger.
h/t Geoffrey Batt