Details of Countrywide 'VIP Program' Could Be Revealed
Bank of America is ready to disclose details of Countrywide's former VIP program of preferential mortgages if a law enforcement body, Congress or other government bodies, issues a subpoena, documents obtained by CNBC show.
At the beginning of June, Republican Congressman Darrell Issa, a member of the Committee on Oversight and Government Reform, sent a letter to Bank of America, which bought Countrywide last year, asking it to produce documents related to the VIP program for the period between January 1, 2000 to October 1, 2008.
At the direction of Countrywide founder and then-CEO Angelo Mozilo, the VIP program, or "Friends of Angelo" program, used discounts such as waived fees and interest rate reductions to establish relationships with politically influential borrowers, according to the letter.
"In many cases, Countrywide facilitated and expedited the loan process for VIPs by ignoring company lending standards," Issa's letter said.
"According to documents obtained by the Committee, when evaluating whether or not to offer preferential treatment to a potentially influential borrower, Countrywide officers openly weighed the value of developing a strategic relationship with that borrower against the cost in dollars that would be forfeited by the company to establish that relationship," the letter added.
Neither Issa, nor the Committee on Oversight and Government Reform were available to comment immediately.
Bank of America "promptly discontinued this program upon its acquisition of Countrywide in 2008," the bank said in its response to Issa, but refused to disclose details of it.
"Unfortunately, pursuant to the Bank's practice regarding such requests, and based upon the applicable law, the Bank is unable to provide the requested information at this time," the letter, signed by Steven Ross, Counsel, Bank of America Corporation, said.
Steven Ross was unavailable to comment immediately on the letter.
"The Bank's practice has been to provide confidential customer information only pursuant to subpoena, whether that request comes from law enforcement, Congress or other governmental bodies," it said.
Bank of America "routinely cooperates" with law enforcement and investigating committees, providing them with information related to customers pursuant to subpoena, the letter added.