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The discovery that Countrywide Financial Corp. recorded phone conversations with borrowers in a controversial mortgage program that included public officials -- and that those recordings have been destroyed -- has prompted new congressional calls for more information about the program.
Rep. Darrell Issa of California, the ranking Republican on the House Oversight and Government Reform Committee, is trying to subpoena the remaining records of Countrywide's VIP loan program. So far, the committee's chairman, New York Democratic Rep. Edolphus Towns, has turned down that request.
The committee's Republican staff investigators have spent months looking into the VIP program, and learned of the call-recording system from a former Countrywide employee in June, according to a spokesman for Mr. Issa.
The Issa spokesman said that earlier this month Bank of America Corp., which purchased Countrywide in July 2008, confirmed the existence of the recording system, but said all the VIP program-related calls had been disposed of.
A Bank of America spokesman said in a written statement that the VIP recordings "were retained only for a limited time or until available recording space was utilized. Due to these limitations, we have no recordings from before July 2008 when Bank of America assumed management of Countrywide and terminated the VIP program."
Mr. Issa's letter noted that the VIP program began receiving widespread media attention in early June 2008, nearly a month before Bank of America's Countrywide takeover. Articles focused on prominent individuals who received loans through the program, which often gave lower fees and interest rates and faster service than could be obtained by the general public. Among the prominent VIP program borrowers were two Democratic senators, Chris Dodd of Connecticut and Kent Conrad of North Dakota. Both men have denied wrongdoing, and said they never asked for favorable loan terms from Countrywide.
Last year, Condé Nast Portfolio magazine reported that Alphonso Jackson, who had been a Housing and Urban Development secretary under President George W. Bush, also received two loans through the VIP program. At the time, Mr. Jackson told the magazine that he had been a longtime Countrywide customer and wasn't aware of receiving any favorable treatment on the loans.