Ex-Fannie Mae CEO Questioned Over Personal Home Loan

Posted March 4, 2009 at 1:35pm

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, will send 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.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 VIP 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.).Documents that Raines’ team submitted to the House committee last month appear to contradict 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.“Prior to further investigative action by the Committee, we thought it prudent to write to you and invite your client to reflect on his testimony,— Issa writes to Raines’ lawyer, Kevin Downey of Williams & Connolly. “Should it be necessary to have Mr. Raines clarify or amend his testimony, we encourage him to do that as quickly as possible.—Issa asked for a response by March 18. Downey did not immediately return a call for comment.