Countrywide Financial political loan scandal and the SEC

The Countrywide Financial political loan scandal was a major controversy that involved the Securities and Exchange Commission (SEC). The SEC was criticized for its handling of the case.

Countrywide Financial was a major subprime lender that was accused of giving favorable loan terms to politicians and other influential individuals. This was done in exchange for business and other benefits.

The SEC was aware of the scandal but failed to take decisive action, leading to widespread criticism.

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The Countrywide Financial scandal was a major controversy in 2008-2009.

Numerous Washington, DC politicians received mortgage financing at noncompetitive rates from Countrywide Financial.

The corporation placed them in a program called "FOA's" or "Friends of Angelo", named after Countrywide's Chief Executive Angelo Mozilo.

The largest recipient of campaign contributions from Countrywide was Rep. Ed Royce (R-CA), who received $37,500 since 1989.

Two former CEOs of Fannie Mae, Franklin Raines and James A. Johnson, received loans from Countrywide.

Franklin Raines had taken calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters.

However, Raines and the Obama campaign both alleged that Raines had never advised Obama.

A Congressional ethics panel started examining allegations that Democratic Senators Christopher Dodd and Kent Conrad received preferential loans from Countrywide Financial.

Dodd faced criticism for his role in the scandal from Connecticut's largest newspaper, the Hartford Courant, as well as from the Connecticut Republican party.

Citizens Against Government Waste named Dodd its June 2008 "Porker of the Month" for accepting a preferential mortgage deal from Countrywide Financial.

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Countrywide Financial faced intense scrutiny for its predatory lending practices. Investigations revealed the company's involvement in making billions of dollars in subprime loans, which led to significant financial distress for many homeowners.

Countrywide's leaders, including Mozilo, Sambol, and Sieracki, were charged by the SEC for misleading investors about the company's loan practices. The SEC alleged that Countrywide made at least $97.2 billion in subprime loans between 2005 and 2007.

The company's own internal emails revealed concerns about the risks of its loan products. Mozilo referred to some loans as "toxic" and "dangerous", and expressed uncertainty about how they would perform in a stressed market.

Here are some key figures related to Countrywide's subprime lending practices:

Bank of America has faced its fair share of investigations over the years. In 2008, the company agreed to provide more than $8.6 billion of home loan and foreclosure relief after being sued by 11 states for predatory lending practices.

This settlement was a result of Bank of America's acquisition of the lender Countrywide, but it was still related to Countrywide loans.

The company's lobbying efforts have also been under scrutiny. According to the Center for Public Integrity, Bank of America's contribution grand total includes employee and soft money contributions from the lender and its subsidiaries.

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The SEC charged the leaders of the nation's No. 1 subprime lender, Countrywide, with misleading investors.

Countrywide made at least $97.2 billion in subprime loans between 2005 and 2007, earning the company the top spot on the Center's Top 25 Subprime Lenders list.

The SEC's complaint includes insider trading charges against Mozilo, who earned close to $140 million in selling stock in Countrywide between late 2006 and early 2007.

Internal company emails released by the SEC reveal that Mozilo referred to the company's loans as "toxic" and "dangerous".

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Christopher Dodd, the chairman of the Senate Banking Committee, received a noncompetitive mortgage rate from Countrywide Financial.

Dodd's campaign received large donations from Countrywide's political action committee.

Rep. Ed Royce, the largest recipient of campaign contributions from Countrywide, received $37,500 since 1989.

Franklin Raines, a former CEO of Fannie Mae, received a loan from Countrywide.

Raines took calls from Barack Obama's presidential campaign seeking his advice on mortgage and housing policy matters.

However, Raines and the Obama campaign both allege that Raines never advised Obama.

Two Democratic Senators, Christopher Dodd and Kent Conrad, received preferential loans from Countrywide Financial.

Dodd faced criticism from Connecticut's largest newspaper, the Hartford Courant, and the Connecticut Republican party.

Dodd was named the "Porker of the Month" by Citizens Against Government Waste for accepting a preferential mortgage deal from Countrywide.

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