Towns denies VIP mortgage treatment

Rep. Edolphus Towns (D-N.Y.) categorically denied receiving preferential treatment from Countrywide Financial Corp. after allegations surfaced that his loans were made through the mortgage giant's VIP department.

“Chairman Towns did not receive, nor did he seek, any special mortgage benefits,” a Towns spokeswoman said in an e-mail. “We have no reason to believe there is anything to this matter.”

When asked how Towns first got in touch with Countrywide, the spokeswoman declined to comment.

“We will not be conducting interviews at this time,” she responded.

Towns, who chairs the House Oversight and Government Reform Committee, received two home loans from Countrywide, and some information in the mortgage documents raises the possibility that they were made through the VIP program — operated under former Chief Executive Angelo Mozilo and known within the company as “Friends of Angelo,” The Wall Street Journal reported Friday.

Rep. Darrell Issa (R-Calif.), Towns's GOP counterpart on the panel, has been pushing for a full committee investigation of Countrywide for nearly a year. Bank of America is Countrywide’s parent company and its executives have said they would provide information about the VIP program if Congress subpoenas the material.

The mortgage documents on Towns’s loans contain a Countrywide address and branch number that correspond to the VIP program.

Towns said last week that he was not launching a full committee probe of Countrywide because the Justice Department was conducting its own investigation and he did not want to interfere with it. A spokeswoman for Towns told the WSJ that his decision not to subpoena the VIP records has nothing to do with his mortgages. If Towns was part of the program, he wasn’t aware of it, she said.

Issa pledged to continue pushing for an investigation into Countrywide’s questionable lending practices in the face of the new information regarding Towns’s mortgages.

“This story does not change my approach to the investigation of the Countrywide VIP program,” Issa said in a statement released Friday. “I will continue to press forward with this investigation and strongly believe that a subpoena to Bank of America is a necessary next step to fully expose how Countrywide attempted to use its VIP program to buy influence.”

Early last week, Rep. Dennis Kucinich (D-Ohio), who chairs an Oversight subcommittee, refused to indicate whether the panel would launch an investigation, telling The Hill only that he couldn’t say because of “tangential” concerns.  

The Senate Ethics Committee is investigating loans Countrywide made to Democratic Sens. Chris Dodd (Conn.) and Kent Conrad (N.D.) through the VIP program. Both senators have denied wrongdoing and said they never asked for favorable loan terms from Countrywide.

Issa has acknowledged that any congressional investigation into Countrywide’s VIP program would likely implicate other lawmakers and public officials on both sides of the aisle. But he said: “The investigation into the Countrywide VIP program by the Oversight and Government Reform Committee Republicans has and will continue to focus on the efforts of Countrywide to buy political influence and not on individual allegations of ethical misconduct by government officials.”

Issa also gave Towns credit for facilitating parts of the GOP probe.
“While Chairman Towns has not agreed to my request for a subpoena to Bank of America, he has assisted efforts to gain access to the Countrywide documents of former Fannie Mae CEO Franklin Raines and facilitated the interview of a Countrywide whistleblower by committee investigators.”