Two more congressmen have been identified as receiving home mortgages through a Countrywide Financial Corp. program that has prompted a Congressional investigation into whether the now defunct lending giant approved loans on favorable terms to win political favor.
According to a report from Dow Jones, Reps. Howard McKeon and Elton Gallegly — veteran Republicans from Southern California — acknowledged they are among the four whose names were recently sent to the House Ethics committee by Rep. Darrell Issa, R-Calif., chairman of the House Oversight and Government Reform committee, which is probing a Countrywide mortgage program dubbed 'Friends of Angelo.'
Neither has been accused of any wrongdoing. Under the FOA program, borrowers who knew former CEO Angelo Mozilo or other top executives at the company received favorable loan terms. The program was dismantled in 2008 when an ailing CFC announced its sale to Bank of America.
A spokeswoman for Mr. McKeon, chairman of the House Armed Services Committee, said he was "pretty shocked and angry" when Rep. Issa recently told him he was listed in CFC records as a FOA customer.
Until then, Mr. McKeon had no idea that his 1998 loan had gone through the program, she said. He had never asked for, and as far as he knew, never received any special favors on the home loan, according to the spokeswoman. Public documents show the loan was for $315,000. She said the congressman no longer owns the house.
Mr. Gallegly said in an interview that after being contacted by The Wall Street Journal about his 2004 Countrywide loan he talked with Issa staffers who told him that records showed his loan went through the FOA program.
He said he hadn't previously heard of the program and would have "run away from" any offer that possibly carried special favors. Mr. Gallegly said he doesn't believe he received any special treatment on the $77,000 loan, which he said he paid off in 2005.
Both McKeon and Mr. Gallegly deny ever carrying out any favors for Countrywide.
