BizJournals Portfolio

Widening Circle of Friends

The V.I.P. club included the not-so-important.
Mozilo

Who says it's lonely at the top?

Angelo Mozilo may be the busy chief executive of the nation's biggest mortgage lender, but it turns out he had time for many, many friends.

Two weeks ago, Daniel Golden reported on Portfolio.com how a little-known program at the lender Countrywide Financial provided mortgages at favorable terms to former cabinet members, a former ambassador, and two senators, including Christopher Dodd, the chairman of the Senate Banking Committee. Countrywide's V.I.P. program waived points, lender fees, and company borrowing rules for its "friends." (For Portfolio.com's complete coverage of the Countrywide loan scandal click here.)

But it was not only elected officials and the powerful and politically connected who received the V.I.P. treatment.

James Hagerty and Glenn Simpson of the Wall Street Journal report today that the program helped a number of others, including the daughter of a casino manager, former Indiana Pacers center Rik Smits, and former San Francisco 49ers offensive lineman Harris Barton.

While the possible motivation for favorable loans to the politically connected is apparent, it's not why Mozilo might have recommended these customers.

The Journal says: "Mr. Mozilo regularly lined up loans for people he met, according to several current and former Countrywide executives. Said one: 'Angelo would call in and say, literally, My maid needs a loan.'"

The paper notes that while there is nothing illegal in offering loans at favorable terms, it is not necessarily in the interest of shareholders.

That problem will soon be Bank of America's, as its acquisition of Countrywide closes next week.

On Thursday, the bank said it would eliminate about 7,500 jobs, or more than 12 percent of the two companies' mortgage, home equity, and insurance businesses, after the merger.


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