Dodd Defends Sweetheart Countrywide Mortgage Deal
U.S. Sen. Chris Dodd (D-Conn.) has remained largely unhurt by the controversy over his “sweetheart” deal with mortgage lender Countrywide. But CNBC’s Carl Quintanilla finally bucked the media trend of ignoring the scandal and brought the loan up in an interview with the former Democratic presidential hopeful July 14.
Dodd, the chairman of the Senate Banking Committee, appeared on CNBC’s “Squawk Box” in the wake of Treasury Secretary Henry Paulson’s July 13 announcement that the federal government would take actions to prevent the government-sponsored enterprises Fannie Mae (NYSE:FNM) and Freddie Mac (NYSE:FRE) from failing.
“Squawk Box” co-host Quintanilla asked Dodd if his association with Countrywide, now owned by Bank of America (NYSE:BAC), compromised his ability to lead on the housing issue.
“Not at all,” Dodd said. “In fact, we’re more than happy to talk about that and since we’ve talked about having a – refinancing a house some years ago. And those rates we were given were exactly within the band of rates that were available to people.”
Quintanilla was referring to a report in the June 12 issue of Condé Nast’s Portfolio magazine, which revealed that some lawmakers and high-ranking bureaucrats were given preferential interest rates as part of Countrywide’s “V.I.P.” program.
Dodd appeared on CNBC from his East Haddam, Conn., home, which the Portfolio article reported was refinanced with a $275,042 loan. Countrywide waived a quarter-point on the loan, giving him a rate of 4.5 percent.
Dodd called it “unfortunate” that the issue was a controversy and cited Senate support for his housing bill as evidence he is still able to lead.
“It’s unfortunate that people wanted to raise that, ironically right in the middle of the housing issue as we are trying to move forward,” Dodd said. “But again, I don’t have any concerns about it at all. I think the reaction by my colleagues in the Senate – as I say, 63 to 5 – about my housing bill the other day, 19 to 2 out of our committee – I consider it a non-issue.”
In June, Dodd told CNBC’s “Squawk Box” government should be able to mandate what profit is “fair” for business.
