Senators As Confused Borrowers? Don't Insult Our Intelligence
For many many months now I’ve been suggesting (that’s a nice word for it) that in addition to plenty of predatory lending during the housing boom, a lot of folks just plain didn’t take the time to read their paperwork or even ask when exactly their adjustable rate loans would adjust.
I’ve been told, well, these mortgage documents are just too hard for most folks to understand, and most borrowers don’t know what questions to ask. This whole housing crisis is really just the lenders' faults, right?
Am I now to lump some U.S. Senators in with those confused borrowers? First we hear about the member of Senator Barack Obama’s campaign team who got a “sweetheart” loan from Countrywide , and then kind of had to resign because it was all so darned unseemly. That fellow, Jim Johnson, is also a former CEO of Fannie Mae.
Apparently Countrywide has a VIP program, known as “Friends of Angelo,” where the lender gives certain people better deals, maybe shaves a point or something, simply due to who those certain people are, basically saving them all thousands of dollars.
Now how about Senator Chris Dodd, Chairman of the Senate Banking Committee, who has been spearheading the Senate’s housing rescue plan? Or Senator Kent Conrad, who is a member of the Senate Finance Committee? They got the deals. Conrad put out a statement saying, “Although I did not ask for or know that I was receiving a discount, and even though I was offered a competitive loan from another lender, I do not want to have received preferential treatment." Conrad now says he’ll donate $10,500 to charity (Habitat for Humanity) and refi his loan (good luck with today’s mortgage market!).
Senator Dodd’s statement reads: “As a United States Senator, I would never ask or expect to be treated differently than anyone else refinancing their home.”
So am I to believe that these high-ranking Senators, and a former Fannie CEO, didn’t read their loan documents to figure out that they were getting a special deal?? Did they not know enough about how mortgages work to figure it out? And why would Mozilo give these folks a special deal if he didn’t expect them to at least know about it??
The Senators are claiming they had no idea. Come on. I realize I’m supposed to accept that all those subprime borrowers didn’t understand their loans, but to accept that these well-educated leaders of our government didn’t--well that insults my intelligence, and every borrower’s out there.
Questions? Comments? RealtyCheck@cnbc.com