Dodd: Investigating Countrywide is 'the correct move'

Sen. Chris Dodd (D-Conn.) said Friday that it was the "correct move" for House lawmakers to investigate Countrywide, the beleaguered mortgage lender from which he received several loans.

Critics have targeted Dodd and other lawmakers for more than a year for receiving special treatment from Countrywide. As part of a broader investigation, the House Committee on Oversight and Government Reform said Friday that it would subpoena documents about loan practices from Countrywide.

"I welcome a fair examination of Countrywide’s business practices and those of other lenders," Dodd said in a statement.

The Senate Ethics Committee earlier this year said Dodd did not violate any ethics rules in the case.

"In my case, the bipartisan ethics committee found that my rates and terms were standard and that there was no special deal," Dodd said. "It's clear that this once-respected company has not had the cleanest track record, and I believe it's important that we have a better understanding of their business practices. This is the correct move by the House Oversight Committee."

The oversight committee is investigating a wide range of companies, including Bank of America, which now owns Countrywide; Wells Fargo, JP Morgan Chase, Citigroup, Residential Capital (GMAC), and U.S. Bank Home Mortgage.

Rep. Darrell Issa (Calif.), the ranking Republican on the oversight committee, has strongly pushed the committee to investigate Countrywide for the VIP program run by former chief executive Angelo Mozilo.

"We need to clarify unanswered questions about Countrywide Financial's VIP program, so I am issuing a subpoena to gather information about how that program worked and whether it provided special benefits to government officials," said Rep. Edolphus Towns (D-N.Y.), chairman of the oversight panel.

The oversight panel late on Friday evening issued a subpoena to Bank of America for documents related to the VIP program at Countrywide. Towns said he intends to pursue the investigation in a "bipartisan fashion." Issa indicated that there had been differences about how to draft the subpoena, but he said the move on Friday night would allow the investigation to proceed.

The subpoena is for a wide range of documents related to the VIP program. The subpoena indicates that the documents must be released by Nov. 6.

Bank of America said it discontinued the VIP program when the bank acquired Countrywide in July 2008.

"While we place the highest priority on customer confidentiality, we are obliged by Congress to respond to this subpoena," Bank of America said in a statement. "We will continue to cooperate with the committee as it discharges its oversight responsibilities."

This story was updated Saturday at 6:00 a.m.