Dodd Thought “VIP” Status was “Just A Courtesy”

Senators Chris Dodd (D-CT) and Kent Conrad (D-ND) are still fending off questions about special-rate loans they received from Countrywide Financial.

Countrywide’s been at the center of the mortgage meltdown, and the GOP is cranking up the pressure on the two Democratic lawmakers.

Dodd told reporters yesterday that a loan officer specifically told him and his wife they were getting “VIP” consideration in 2003 when they took out two loans on their Connecticut home and Capitol Hill townhouse.

But Dodd said he didn’t think to ask precisely what that meant. Even though he is chairman of the Senate Banking Committee, which oversees the mortgage industry, Dodd said he “assumed” that “it was more of a courtesy thing.”

From the New York Times.

“Somebody told you you were in a V.I.P. program,” a reporter said, “And you didn’t think you were getting … ”

Mr. Dodd cut off the reporter and finished the question himself. “A special deal on a loan?” the senator asked. “No.”

According to Portfolio, which broke the story last week, the lower rates Dodd received saved him “about $58,000 on his Washington residence over the life of the loan, and $17,000 on the Connecticut home.”

Calculating the exact benefit is a challenge, and some suggest Dodd’s perk was far less. The Washington Post reports:

Dodd borrowed $506,000 at 4.25 percent to refinance a Capitol Hill townhouse, originally purchased in 1999, and $275,042 at 4.5 percent to refinance a home in East Haddam, Conn.

Rather than requiring him to pay the full amount to obtain the reduced mortgage rates, as other customers must, Countrywide waived three-eighths of a point, or about $2,000, on the first loan and a quarter-point, or $700, on the second.

Meanwhile, Sen. Conrad has moved quickly to quell the criticism. Through the special program — known as the “F-O-A program”, or “Friends of Angelo, named for Countrywide CEO Angelo Mozilo — Conrad got a good deal on loans for both a Delaware beach vacation home as well as an eight-unit investment property he owns in Bismarck with his brothers.

Conrad said he gave $10,700 to Habitat for Humanity to compensate for any benefit he may have received on the vacation home loan. And this week, he said, he paid off the final $32,000 on the investment property.

Conrad spoke to Mozilo about his mortgage in 2002, but the deals under scrutiny were not finalized until 2004. Yet like Dodd, Conrad also said he was unaware of any discount. “I had absolutely no clue they had done that,” he said yesterday.

“My conscience is absolutely clear,” he told the Times.