Countrywides’ Mozilo gave out ’special’ mortgages

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Great report by the Wall Street Journal on Angelo Mozilo’s penchant for handing out ’special’ mortgages to people that would be helpful to him and his mortgage company. On the list? Two former CEO’s of Fannie Mae, the largest GSE that purchases Countrywide mortgages and James Johnson, an adviser to Barack Obama’s campaign. As the article states, no one really knows if the loans were improperly underwitten or used fraudulent documentation, but the special privilege excerised by CEOs of a government entity are at best in poor judgement.

My response? Really? It’s sad nothing surprises me about any of this.

From the Wall Street Journal:

Countrywide Financial Corp. makes mortgage loans through a vast network of offices, brokers and call centers. But a few customers have gotten their loans a special way: through Countrywide Chief Executive Angelo Mozilo.

These borrowers, known internally as “friends of Angelo” or FoA, include two former CEOs of Fannie Mae, the biggest buyer of Countrywide’s mortgages, say people familiar with the matter.

One was James Johnson, a longtime Democratic Party power and an adviser to Sen. Barack Obama’s campaign, who this past week was named to a panel that is vetting running-mate possibilities for the presumed nominee.

As Blogging Stocks so eloquently put it:

Since Countrywide had business dealings with Fannie Mae, the whole deal looks a bit tawdry.

No one knows whether these loans will cause legal problems for any of the parties involved. But, it does, once again, raise the question of the wisdom of Bank of America (NYSE: BAC) buying a company with such an ugly past and so many chapters of less-than-ethical behavior.

Perhaps no one cares about the ethics part if there is money to be made.