Here's your quid pro quo Sen Dodd

[aREDSKIN]

Sen Dodd et al should all be removed from office.

The U.S. Senate is about to enact a massive subsidy for Countrywide Financial less than a week after revelations that the company’s “Friends of Angelo” sweetheart-loan program included two U.S. senators. It seems unthinkable, but it’s true. What’s worse? One of the two senators sponsored the bill.

The principal author of the Dodd-Shelby housing-bailout bill is Sen. Christopher Dodd, a Connecticut Democrat who chairs the Senate Banking Committee, which has jurisdiction over the mortgage market. Last week, Portfolio magazine revealed that Dodd was one of two U.S. senators who benefited from a program under which Countrywide Financial gave loans at favorable terms to the influential and the powerful. The other senator was Kent Conrad, a Democrat from North Dakota.

The allegations against Conrad are damning enough. Though he denies having known he received preferential treatment, Conrad admitted to a Wall Street Journal reporter that he called Countrywide CEO Angelo Mozilo to ask for a loan on the advice of former Fannie Mae CEO Jim Johnson, another beneficiary of the program. (Johnson resigned from Barack Obama’s running-mate vetting team after his involvement in the program was revealed.)

But as powerful as Conrad is, the allegations against Dodd are more disturbing because he wields so much power over Countrywide’s fortunes and because he has used that power to benefit Countrywide. According to Portfolio’s calculations, the preferential loan rates Dodd received on two mortgages could end up saving him $75,000. (Like Conrad, Dodd denies knowing that he received preferential treatment.)

The troubling nature of this arrangement becomes clear when one looks at the fine print of the Dodd-Shelby housing bill. Under the bill, mortgage lenders — of which Countrywide is the largest in the U.S. — would agree to renegotiate their most troubled home loans in exchange for a federal guarantee on those loans. If the borrowers who took out those troubled loans end up defaulting, the government would cover any losses the mortgage lenders incur.

Under the Dodd-Shelby bill, a fee collected from the government-sponsored enterprises Fannie Mae and Freddie Mac would fund this program. The House version of the bill would fund the program with tax dollars. Either way, the program would be “a government buyout of problem mortgages disguised as a refinancing plan,” as David C. John of the Heritage Foundation puts it in his analysis.

Defenders of Dodd’s bill insist that it’s not a bailout, because the lenders have to write down 15 percent of the value of a troubled loan in order to qualify for the program. The lenders, they insist, are taking a loss and bearing the consequences of the irresponsible lending in which they engaged during the housing boom.

But this argument omits the fact that if a troubled loan goes into foreclosure — a most likely destination for many of them — the lender faces an average loss of one-third of the value of the loan. Faced with this kind of loss, many lenders have an incentive to work something out with borrowers anyway, and many already have, taking advantage of the Bush administration’s voluntary Hope Now program to do just that.

The kind of loans that lenders would dump on the government under the Dodd-Shelby bailout would be the most radioactive on their books — the ones likely to default anyway. So concluded the Congressional Budget Office, which found that up to 35 percent of the loans refinanced through the Dodd-Shelby program would eventually default. The lenders wouldn’t have any exposure to those losses — they would be paid back through the fund created by the Dodd-Shelby bill.

And this is where we come full circle, back to Sen. Dodd and his sweetheart deal from Countrywide. The Dodd-Shelby housing-bailout bill would be bad public policy under any conditions. Lenders are already under severe pressure to write down loans for borrowers who still have a chance to make it. The bill is overwhelming slanted toward protecting lenders, like Countrywide, that lowered their standards dramatically on a bet that home prices would never go down and subsequently find themselves holding a lot of bad debt.

Congress should launch a full investigation of Countrywide’s program to influence the powerful; that much should go without saying. But if the Senate passes the Dodd-Shelby housing bailout before such an investigation can run its course — especially if that investigation finds that members of Congress were improperly influenced — it will have allowed Countrywide to take the money and run.

http://article.nationalreview.com/?q=MmEwYzQ1NmY2NDc1ZGIzNTIzZDVkMTRhMzg4ZTA5ZGY=

[Larry]

Uh, the article claims (correctly, I assume) that these people bought two Senators. Seems to me that for this bill to pass, at least 49 others who haven't been paid off would have to find a reason to vote for it. (Like, they think it might prevent an economic collapse, or some such.)

I agree, the way it's described, the bill sounds bad. But if it passes, it won't be because Countrywide bought two Senators.

[SkinsHokieFan]

Uh, the article claims (correctly, I assume) that these people bought two Senators. Seems to me that for this bill to pass, at least 49 others who haven't been paid off would have to find a reason to vote for it. (Like, they think it might prevent an economic collapse, or some such.)

I agree, the way it's described, the bill sounds bad. But if it passes, it won't be because Countrywide bought two Senators.

So therefore, because the sponsor of the bill may be the only who has been bought and corrupted, this awful bill should pass? WTF? :whoknows:

[Larry]

So therefore, because the sponsor of the bill may be the only who has been bought and corrupted, this awful bill should pass? WTF? :whoknows:

If it passes, it will be because 50 other Senators (and 200 Congressmen) saw something in it tha they thought made it a good deal.

Maybe their reasoning will be that is all these loans go sour, it'll crash the stock market. Or they'll think up some other scenario whereby these failures could lead to a collapse of the larger economy. Maybe they'll convince themselves that they're preventing Simon LeGree from foreclosing on Uncle Rufus. Or that this bill will allow more homeowners to keep their homes.

Maybe they'll convince themselves that this bill will make them look good in an election year.

Yeah, to me, the bill sounds like a stinker.

I honestly believe that our country is in trouble, because we've allowed companies to get so big and powerful that they've reached the point where the taxpayers can't allow them to fail. And I think cases like this highlight the fact that Big Business is starting to count on this response. Gambling with their money on the assumption that heck, if they roll snake eyes, the taxpayer will cover it. I don't like the thought of the taxpayers bailing out a company which intentionally entered a risky business. (Or any other business, for that matter. And it really bothers me that this safety net only applies to big businesses. IMO, if the government's going to help out any businesses, it should be the small ones.)

It ticks me off that the people responsible are immune from punishment.

It ticks me off that, when I read about somebody buying a Senator, I'm always struck by how cheap it was to buy him. Countrywide had how much money, and they were able to buy a Senator by loaning him what, $50K, at a slightly below market interest rate? They didn't even have to pay the guy 50 Grand?

What's the average ROI on buying Congressmen, 10,000%?

All I was saying was that if this bill passes, buying two Senators won't be the only reason.

[Cskin]

If this were two Repub Senators, it would be on every cable news channel 24/7... more than likely worse than the Mark Foley situation. It's Dems... so it's... crickets chirping. :paranoid:... :doh:

As for Dodd and Conrad, order the gallows built... hang them on the Capital grounds and let their bodies rot over the summer for all to see.