Tuesday, June 10, 2008

Obama and Country Wide Financial Corp - Sermons out of one side of his mouth while a leading aid receives questionable low rate loans

A prominent adviser to Barack Obama drew criticism from the Republican party Monday over a loan deal with Countrywide Financial Corp., a company at the center of the subprime lending debacle.
James Johnson is on Obama’s vice presidential search team, but The Wall Street Journal reported Saturday he also received more than $7 million in loans, at least two loans of which were at below-market rates: a 5.25 percent loan for $1.3 million and a 3.875 percent loan for $971,000. The Journal reported that this special treatment came from a relationship with the company’s CEO, Angelo Mozilo.
The Journal reports there is nothing illegal about a mortgage firm showing some borrowers preference over others.
But there remains a possible political problem for Obama, who has has been critical of Countrywide and other subprime lenders that are accused of extending credit to borrowers who could not afford it, while a top adviser appears to have a close relationship with one such company’s top ranks.
On Monday, the Republican National Committee issued a statement blasting the reports.
“Barack Obama routinely rails against lobbyists and corporate insiders, yet his campaign is stocked with both. Now it turns out that the man leading his vice presidential selection team is receiving highly questionable loans,” RNC spokesman Alex Conant said.
“With millions of Americans struggling to pay their mortgages, it raises serious questions about Obama’s judgment when we learn members of his campaign leadership are receiving favors that the average American would never get. With Obama discussing the economy today, he needs to stand up and address the mortgage scandals within his campaign.”
Johnson was CEO of Fannie Mae from 1991 to 1998.
According to The New York Sun, Johnson attorney Brian Brooks said via e-mail that the loans were “well within the band of standard industry practices with regard to price and structure of loans to borrowers of Mr. Johnson’s background.”


Click here to see The Wall Street Journal report.
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