June 18, 2008
Lest anyone think that the Bush administration or the Republicans bear exclusive culpability for the scandal stemming from the subprime mortgage crisis (involving HUD and the Ameriquest Mortgage Company, among others), it is clearly a bipartisan affair. Last Friday it was reported that two Democratic senators -- Kent Conrad of North Dakota and Christopher Dodd of Connecticut -- got special favors from Countrywide Financial, though they deny it. Dodd was a candidate for president until early this year, and is Chairman of the Senate Banking Committee, which is playing a key role in trying to untangle and clean up the mortgage lending industry. It seems, however, that he is a part of the problem. The key player in the mortgage loan arrangements was Angelo Mozilo, who instructed his staff to cut points off the mortgage loan agreements with Dodd and Conrad. See Washington Times.
That article reminds us that a key campaign aide to Barack Obama, Jim Johnson, was obliged to step down after it was learned of his involvement in the subprime mortgage mess through his position as Chief Executive Officer of Fannie Mae. That stands for "Federal National Mortgage Association," founded as a New Deal program in 1938, but you'll have a hard time finding the full name on their Web site or in any news reports. (I wonder why...) I'll be interested to hear Obama's position on the mortgage crisis and how he plans to to fix the culture of corruption in Washington, which is at the root of the problem.