Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

Bank of America subpoenaed over Countrywide loans

By Charles Riley, staff reporter


NEW YORK (CNNMoney) -- Bank of America was subpoenaed Wednesday over a loan program that may have given influential people sweetheart deals on their mortgages.

The subpoena was issued by House Committee on Oversight and Government Reform Chairman Darrell Issa, a Republican from California who has doggedly pursued the issue for several years.

The subpoena demands Bank of America turn over documents related to a VIP loan program that was administered by Countrywide Financial, which Bank of America purchased in early 2008.

Countrywide was once the nation's largest mortgage originator, but the company suffered heavy losses in its subprime loan business and had to find a buyer or collapse.

The subpoena compels Bank of America to produce documents, including e-mails, that relate to loans received by government officials, including members of Congress, by March 7, 2011.

"Countrywide orchestrated a deliberate and calculated effort to use relationships with people in high places in order to manipulate public policy," said Issa.

"The American people have a right to know the totality of who participated in the Countrywide's VIP program and what they did in return for access to it," he added.

Dan Frahm, a spokesman for Bank of America, said in a statement that Countrywide's VIP program was immediately discontinued after being acquired, but that Bank of America would comply with the order.

"While we place the highest priority on keeping customer data confidential, we are obliged by Congress to respond to this subpoena" Frahm said.

Both Democrats and Republicans in Congress have sought in recent years to investigate the program that has been dubbed "Friends of Angelo" because it allegedly provided sweetheart mortgage rates to the friends of former Countrywide CEO Angelo Mozilo.

Mozilo agreed in October to pay $67.5 million to the SEC to settle fraud charges stemming from his time at Countrywide.

Democratic Sens. Chris Dodd of Connecticut and Kent Conrad of North Dakota were both cleared of wrongdoing by the Senate Ethics Committee after it was alleged they received favorable treatment as members of the VIP group. To top of page

Index Last Change % Change
Dow 16,351.38 293.03 1.82%
Nasdaq 4,749.98 113.87 2.46%
S&P 500 1,948.86 35.01 1.83%
Treasuries 2.19 0.02 0.97%
Data as of 6:02pm ET
Company Price Change % Change
Bank of America Corp... 15.85 0.32 2.06%
Apple Inc 112.34 4.62 4.29%
General Electric Co 24.57 0.69 2.89%
Alcoa Inc 9.32 0.10 1.08%
Netflix Inc 105.44 -0.35 -0.33%
Data as of 4:03pm ET
Sponsors

Sections

Stocks go way way down. And then back up. It's enough to make your head spin. But what you need to do is keep a level head and not panic. This doesn't look like a bear market. More

Several currencies have plummeted this year. That's bad in the short term. Long term it could be a good thing though. More

How do you run a successful crowdfunding campaign? Indiegogo's CEO Slava Rubin offers his top tips and mistakes to avoid. More

Millennials are looking for a buying opportunity and the current stock market gyrations seems to offer that. Many are jumping in. More