Ex-Fannie Mae CEO Questioned Over Personal Home Loan

Posted March 4, 2009 at 5:56pm

A top House Republican is asking former Fannie Mae Chief Executive Officer Franklin Raines to get his story straight on whether he accepted a sweetheart home loan from Countrywide Financial, the troubled subprime lender.

Rep. Darrell Issa (R-Calif.), the ranking member on the House Oversight and Government Reform Committee, sent a letter on Wednesday to Raines’ lawyer asking him to clarify testimony Raines gave late last year indicating he got no special treatment with his Countrywide mortgage.

Raines attorney Kevin Downey responded Wednesday defending the former executive’s testimony as accurate and arguing Issa’s contention to the contrary is not backed up by the documents the lawmaker cited as evidence.

In a December appearance before the oversight panel, Raines repeatedly asserted that he received his million-dollar loan at standard rates and did not participate in the company’s controversial program for politically important borrowers.

Countrywide, among the companies at the center of the housing market meltdown for aggressively pushing subprime loans, is alleged to have used the program to curry favor with key policymakers, including Senate Banking, Housing and Urban Affairs Chairman Chris Dodd (D-Conn.) and Senate Budget Chairman Kent Conrad (D-N.D.).

Issa argued the documents that Raines’ team submitted to the House committee last month contradicted his testimony. They show that Raines’ office was in contact with Countrywide’s VIP loan unit and that the lender scrapped some fees and knocked a point off Raines’ loan when he refinanced it in June 2003. Downey countered that Issa found no evidence that the loan unit he cited was the same program tapped by Dodd, Conrad and others. And he said the terms of Raines’ refinancing were consistent with any borrower of his financial profile.

Downey wrote Issa that “although you have had the opportunity to explore these matters in depth, none of what is set forth in your letter suggests anything new or anything inaccurate about Mr. Raines’s testimony before the Committee.—