By Les Christie and Rebecca Stewart,
NEW YORK (CNNMoney) — Countrywide Financial, once the nation’s largest mortgage lender, bought influence on Capitol Hill by issuing hundreds of sweetheart loans for members of Congress, their staffs and other government employees, according to a report issued by the House of Representatives Thursday.
The three-year investigation, which was led by House Oversight and Government Reform Committee Chairman Darrell Issa, revealed the extent to which Countrywide was offering discounted loans and other perks to Congress members and other officials in order to benefit its business interests.
Referred to as the “VIP program” or the “Friends of Angelo” program — after former Countrywide founder and CEO Angelo Mozilo — this preferential treatment varied with the importance and influence of the borrowers and included such perks as lower loan rates, expedited loan processing and less stringent underwriting standards, the report said.
Countrywide, which Bank of America (BAC, Fortune 500) purchased in 2008, specialized in subprime loans, the risky mortgage products issued to borrowers with not so great credit that began to record exceptionally high default rates in 2007 ushering in a wave of foreclosures. Richard Simon, a Bank of America spokesman, said he wouldn’t comment on the report’s findings. However, he did note that Bank of America discontinued Countrywide’s VIP program at the time of the acquisition.
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