House Ethics Committee Says Goodbye to Countrywide Mortgage Probe Without Taking Any Action

The nation's House of Representatives, which has found time to bicker about the "fiscal cliff," apparently has run out of time in its probe of Countrywide Financial.

The House Ethics Committee, in a sleepy, post-Christmas news cycle announcement, said the allegations of corruption, which would have tainted certain high-profile former senators, sacred cows such as Fannie Mae, and selected Countrywide officials, were "outside" the committee's jurisdiction. Further, some issues were beyond the legal time limits structured in House ethics rules, according to thehill.com, which was among the news outlets that reported the story.

Angelo Mozilo

The notion that the committee had no notion of either relevant jurisdiction or of time limits makes little sense. Questions of jurisdiction are issues that inquiries typically resolve, or at least address, as quickly as possible. Time limits are established from day one of an investigation. Countrywide's access to Washington's influential elected officials, appointed bureaucrats, and institutional players, was already well known. The firm's "Friends of Angelo" apparatus, named after then-chairman Angelo Mozilo, arranged sweetheart mortgages for select clients. This was not news; it didn't require much digging.

The House committee's report makes a number of legalese statements that effectively whitewashed its  ingenuous investigation approach. Meanwhile, Angelo Mozilo and nearly all other major players in the housing corruption scandal walk free to this day.

If Mark Zuckerberg's recent 1.05% mortgage from a Silicon Valley-area bank is any indication, the mortgage corruption continues. Hey, who said getting a mortgage should be ruled by ethics?

"Big Six" US Banks Netted Billions Via Secret Federal Reserve Loans

Maybe Not.

Have you ever wanted to get a loan at a below-market interest rate? Well, not so long ago, one highly publicized way was to get a VIP mortgage from Countrywide Financial. Dozens of Fannie Mae officials did exactly that. However, that's small potatoes compared to the secret, below-market interest rate loans the Federal Reserve dished out to major US banks.

The Fed fought Bloomberg News in court -- and fought hard -- to keep the information about these loans from public access. Thankfully, Bloomberg won and has published a story about who got what. It's a very unsavory tale, in which banking titans and the Fed lied to the public and stonewalled Congress. The usual Wall Street suspects are at the top of this corporate welfare list. The stakes were enormous, but so were the rewards: $13 billion net profit for the banks that were treated to the Fed's dole.

It's understandable that the Fed wanted to prop up these bankrupt institutions. It is unacceptable that information about the use of tax money -- generations of tax money, given the scale of the bailouts -- be kept from the American people. What are these institutions afraid of? Their high-handed approach only contributes to suspicions that both the federal bureaucracy and major financial players are profoundly corrupt.

Meanwhile, to the reporters who fought the Fed and won -- thank you.

CalPERS and Other Large Players Settle Suit Against Countrywide and Bank of America

Angelo Mozilo

Remember Countrywide Financial? If you suffered through the prospect or reality of a foreclosed home, the words are chilling ones. Since the collapse of the corrupt housing market in 2008, Countrywide (now called Countrywide Mortgage) and its current owner, Bank of America, have tried to get out from key lawsuits against them.

They appear to have succeeded recently against a well-funded, determined adversary. The LA Times reported today that CalPERS, the Golden State's powerful pension arm, along with other large institutional investors, quietly settled their litigation against Countrywide and BofA. The confidential nature of the settlement means the public has no idea how much the defendants ponied up to satisfy CalPERS and the other litigants. BofA's 4th quarter SEC filing might offer a hint; then again, maybe not.

What is clear is that Countrywide's former chief executive and the face of the foreclosure scandal, Angelo Mozilo, walks free to this day. Meanwhile, those who are financially chained or ruined by the foreclosure disaster do not.

Meanwhile, The New York Times published an interesting look at the interplay of a federal bank regulator and IndyMac, one of the financial firms that formed the housing debacle's Ground Zero. The excellent story was co-authored by Gretchen Morgenson. She is of the few mainstream reporters willing to take on complex financial topics and the combined muscle of Major League Finance and the Feds.