New Twist in Countrywide Loan Probe

Edolphus Towns,
House Committee on Oversight and Government Reform Chairman Edolphus Towns, D-N.Y., speaks during his committee's hearing on "Tracking the Money: Preventing Waste, Fraud and Abuse of Recovery Act Funding" on Capitol Hill, Wednesday, July 8, 2009, in Washington. (AP Photo/Manuel Balce Ceneta)
AP Photo/Manuel Balce Ceneta

Add Congressman Edolphus Towns to the growing list of influential Democratic and Republican VIP's who received loans from Countrywide Financial. That's significant because Towns, a Democrat, heads the committee investigating the mortgage giant's practices. And he personally is blocking the effort to subpoena Countrywide documents, reports CBS News correspondent Sharyl Attkisson.

Republican Darrell Issa is behind the subpoena effort.

"It's really about what Countrywide sought to do, how vast it was, what they got for their millions of dollars in discounts and how do we make sure it doesn't happen again," Issa said.

A Countrywide whistleblower says the company aggressively courted those in position to influence regulations as it made billions by giving out risky loans, then selling them to government-backed Fannie Mae. Billions of dollars worth of those loans defaulted at taxpayer expense.

Today, the Senate Ethics Committee cleared Senators Kent Conrad and Chris Dodd of violating Senate gifts rule for getting VIP Countrywide loans. But they added that they, "should have exercised more vigilance" and their VIP loan status "should have raised red flags."

Internal Countrywide emails leave no doubt as to why some congressional staffers received favorable loans, calling them "a big supporter of Countrywide's" or "responsible for... legislation of interest and importance to Countrywide."

Towns received three loans from Countrywide - and Countrywide is listed as the mortgage holder for his Brooklyn property.

Towns declined our interview request, his office saying he neither sought nor received any special mortgage benefits. For now, he continues to block the subpoena of documents that could list all the VIP's given special treatment by Countrywide - and what, if anything, Countrywide sought in return.

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    Sharyl Attkisson is a CBS News investigative correspondent based in Washington.