BUSINESS

Subprime lender Countrywide bought influence with Washington elite with mortgage discounts

07/05/2012 04:08 EDT | Updated 09/03/2012 05:12 EDT
WASHINGTON - A House committee says the former Countrywide Financial Corp. made hundreds of discount loans to members of Congress, congressional aides, top Cabinet officials and executives of troubled mortgage giant Fannie Mae to win influence while the company was writing and selling billions of dollars in high-risk subprime mortgages.

The report was obtained by The Associated Press. In it the House Oversight and Government Reform Committee says the loan discounts were one way Countrywide tried to sway lawmakers against tightening regulations on Fannie Mae and to maintain Fannie as a big customer of Countrywide-written mortgages.

Six members of Congress got the so-called VIP loans. Countrywide's subprime mortgages helped bring about the 2008 financial meltdown when borrowers defaulted, setting off waves of foreclosures and the collapse of the housing market.