Postal Head Investigated For Mortgage Deal

Troubled Subprime Lender Countrywide Allegedly Waived Fees, Gave Discount To Official

(AP)  The Postal Service is investigating whether the nation's postmaster general improperly received a sweetheart deal on a mortgage from Countrywide Financial Corp., the chairman of the service's governing board said.

Postmaster General John E. Potter is one of several prominent current and former U.S. officials who received discounts and other benefits from the mortgage giant. The Postal Service has hired an outside investigator to review the deal, which reportedly included one shaved point and waived fees for Potter's $322,700 loan.

"We're taking it seriously enough that we wanted it reviewed and we didn't want it done internally," the chairman of the Postal Service Board of Governors, Alan Kessler, told The Associated Press.

Details of Potter's deal with Countrywide was first reported by Conde Nast Portfolio magazine earlier this summer. The disclosure touched off calls for a Capitol Hill investigation into how prominent lawmakers and others received VIP loans.

Countrywide, a leading subprime lender, is at the heart of the mortgage crisis. It has been criticized for using initially low teaser rates that later ballooned higher than borrowers could afford. The company agreed in January to be acquired by Bank of America Corp. of Charlotte, N.C., for about $4 billion in stock.

Potter did not return an e-mail seeking comment, and a Postal Service spokesman said the postmaster general would have no comment.

Potter told the magazine in August that he did not know he was getting a deal on the loan.

Kessler did not say how much the investigation would cost the Postal Service, which is cutting hours and overtime for its employees after finishing its fiscal year $2.8 billion in the red. He said the board was working to keep costs down.

"But something like this is serious enough where I don't want someone to do a cut-rate investigation," he said. "We want a professional review."

He did not say how long the investigation would take.

To run the investigation, the Postal Service hired Abbe Lowell, a Washington defense attorney who has taken on some of the city's most sensitive and high-profile cases. Lowell said he would not discuss the matter and referred questions to the Postal Service.

Sens. Christopher Dodd, D-Conn., and Kent Conrad, D-N.D., have acknowledged receiving mortgages through the VIP program but have said they were unaware of any favorable treatment. Dodd was instrumental in crafting a $700 billion bailout for the financial industry.

[tbuckl]

All hands on deck! All hands on deck! She is going down at the bow, abandon ship! abandon ship! Man the life boats. All hands on deck, this is not a drill, this is not a drill, man the life boats. Mayday mayday this is USS American we are taking on water and going down, Mayday mayday this the USS Americna we are taking on water and sinking, life boats are being deployed, we are abandoning ship at this time.

[slim1h2o]

Posted by itzik1 at 11:58 AM : Nov 17, 2008

So what does your remarks have anything to do with a high ranking (smells to high heaven as well) official getting VIP loans with reduced rates, and no fees?

The two have nothing to do with each other.

[tireslinger]

I couldn''t even begin to agree more, with the last post. I cannot imagine why anyone would sign on the dotted line, and not know everything that is contained within that document. Regarding the current foreclosure crisis, predatory lending practices do deserve a portion of the blame, but so do the borrowers.

[itzik1-2009]

Sweetheart deal aside, all borrowers KNOW the payment will be more than they can afford when they first take out the loan and again at closing with a Truth in Lending document. The document is easily readable and to the point. The borrowers sign it. Lets shift the focus on where the blame lies.

[cricketbeers]

Sens. Christopher Dodd, D-Conn., and Kent Conrad, D-N.D., have acknowledged receiving mortgages through the VIP program but have said they were unaware of any favorable treatment. Dodd was instrumental in crafting a $700 billion bailout for the financial industry.--------------------

They were unaware? Just a coincidence, huh, that they were instrumental in crafting the bailout, right? What B-S.

WHY should there be a VP Plan? Aren''t they borrowers just like anyone else and given interest rates based on their credit scores?

If find it amazing how corrupt we''ve become.

[slim1h2o]

You hear more and more of these "sweetheart" deals, as the whole kit-and-kaboodle unravels...

Countrywide, what a garbage company.