At least five current or former executives at beleaguered Fannie Mae and Freddie Mac are linked to a controversial Countrywide Financial "V.I.P." program that provided mortgages on favorable terms to policymakers and business partners.
 
The executives include Countrywide's former Washington lobbyist, who recommended key officials for V.I.P. treatment, as well as four beneficiaries of preferential loans, among them a former Congressional staffer specializing in housing issues.
 
An article in this month's Condé Nast Portfolio discloses how Countrywide gave cut-rate mortgages to congressmen, journalists and other V.I.P.'s in an effort to curry favor.

Countrywide's former Washington lobbyist, Jimmie Williams, who often referred high-profile prospects for special treatment to the lender, currently works as state director for Freddie Mac.
 

Countrywide's V.I.P. Club An exclusive look at the Countrywide Financial loan scandal.

Clinton C. Jones III, who as a senior counsel of the House Financial Services Housing and Community Opportunity Subcommittee in 2002 was referred for V.I.P. treatment to Countrywide by Williams, is now a vice president at Fannie Mae.

They exemplify the close ties between Countrywide and government-sponsored mortgage buyers Fannie Mae and Freddie Mac. That relationship, which worked to the firms' mutual benefit during the real estate boom, has drawn increasing criticism recently as all three narrowly staved off collapse. Bank of America bought Countrywide at a bargain price, while the federal government has pledged to extend credit to or buy stock in Fannie Mae and Freddie Mac if needed. Fannie Mae and Freddie Mac buy mortgages from Countrywide and other lenders and resell them to investors in the secondary market. Depending on the year, Fannie Mae purchased 10 percent to 30 percent of its loans from Countrywide, which became the nation's biggest mortgage lender.
 
"If Fannie and Freddie catch a cold, I catch the fucking flu," Countrywide co-founder Angelo Mozilo is quoted as saying in Chain of Blame, a new book by Paul Muolo. Now the risky loans that sent Countrywide's share price plummeting and prompted its sale have infected Fannie Mae and Freddie Mac.
 
Home buyers pay discount points to reduce their interest rates; one point equals 1 percent of the loan. Through V.I.P. mortgages, Countrywide cultivated executives at Fannie and Freddie, members of Congress and their staffs, and government officials.   
 
Countrywide's former Washington lobbyist, Williams, acting as an intermediary, would send emails flagging the importance of potential V.I.P. clients to Countrywide. A person familiar with Williams' thinking said that he recommended a hodgepodge of prospective customers for loans, from a security guard to elected officials and Congressional staff. He initially directed them to local Countrywide branches, but began hearing complaints that some branches were slow or overwhelmed. To ensure quality service, he referred more of them to the V.I.P. program, based in Countrywide’s Rosemead, California, call center.
 
In November 2002, Williams urged Doug Perry, a call-center manager, to give "specialized handling" to a loan application from Jones, then senior counsel of the House Financial Services Housing and Community Opportunity Subcommittee. "Jones is also an adviser to ranking Republican members of Congress responsible for legislation of interest to the financial-services industry and of importance to Countrywide," Williams added.
 

Perry then emailed Robert Feinberg, a Countrywide loan officer who dealt with V.I.P. borrowers: "Can you please handle this? 0.5 off. No garbage fees."
 
Once Feinberg completed the paperwork on Jones, the lawyer borrowed $101,800 in February 2003. Countrywide waived five-eighths of a point, or about $625. Senate rules bar members and staff from knowingly accepting gifts of more than $100; gifts include loans on terms not available to the general public.
 
Jones acknowledges being told that he was in the V.I.P. program. But he says his interest rate was average or slightly higher and that he's shocked to learn of his discount. "I thought I was just getting great service," he says. "I didn't know there was a shaving of points."
 
Former Fannie Mae vice president Robert Sanborn refinanced several times through the V.I.P. program. In 2004, for instance, Countrywide waived three-quarters of a point, or about $2,600, on Sanborn's $345,000 refinance of his Provincetown, Massachusetts, vacation home, according to a company document.
 
Sanborn, who worked on risk management and loan servicing in the Dallas office, left Fannie Mae in 2007 and is now a real estate broker. He said he learned about the V.I.P. program through Countrywide contacts, and saw nothing wrong with using it.
 
"My understanding is that it was simply a centralized service for people in the mortgage industry to accelerate the process," he says. He said that Countrywide gave him "the best competitive rates" and "maybe they waived a fee here or there." But, he said, he did not receive any "deep discounts."
 
"I would not call three-quarters of a point a deep discount," Sanborn added. "Loan brokers all over the place have the authority to waive discount points. It's not unusual."
 
Sanborn said he knows Mozilo, but that Countrywide's co-founder didn't refer him to the V.I.P. program. Mozilo did personally arrange a refinancing for another former Fannie Mae executive: Franklin Raines, its chief executive from 1999 to 2004.
 
On June 9, 2003, the same day Raines applied for a nearly $1 million loan, a Countrywide receptionist took a message from Raines' assistant: "Per Angelo, Frank needs to refi." A Countrywide manager then instructed Feinberg by email to take one discount point, or nearly $10,000, off the loan and not to charge "junk" fees.
 
Former Fannie Mae chief executive James Johnson, a close friend of Mozilo, also was given special treatment. As has been previously reported, Johnson received more than $7 million in V.I.P. loans.