New informations highlight the ties between Fannie Mae executives and Countrywide's VIP loan program. This program was created by the subprime lender's CEO at the time, Angelo Mozilo.

Rep. Darrell Issa, ranking member of the Oversight and Government Reform Committees showed documents that reveal information about this controversy: 27 former employees at the government-sponsored mortgage company "somehow managed" to receive 153 subsidized, low-cost loans through the specialty Countrywide VIP loan program. According to Issa, this program existed just to buy friends in critical government and industry positions, in order to protect the company's business interests.

"As our nation marched down the path leading to a crippling financial crisis, Fannie Mae should have been trying to cool off risky subprime lending and protect the economy from a volatile housing bubble" Rep. Issa stated. "The sweetheart deals to officials at Fannie Mae… however raise serious doubt that they could have said no to the risky business practices of Countrywide.'

The VIP list includes names like Daniel Mudd, ex-Fannie Mae COO and CEO; Franklin Raines, former CEO, Jamie Gorelick and Jim Johnson, former CEO.

Issa sent a letter to the Federal Housing Finance Agency (FHFA) this week where he pointed out the two spikes in Countrywide's VIP lending to Fannie Mae that occured in 1998 and in 2001-2003. The fist spike came as Countrywide was negotiating a volume discount with Fannie Mae. The second one came on the leading edge of a "mortgage boom that occurred from late 2002 through 2004 and an expansion of the VIP loan unit. Issa explains that back in 1999 "Countrywide reached an exclusive agreement to sell Fannie Mae billions of dollars in mortgages at a discounted rate." The deal aimed to lock Fannie Mae's competitor, Freddie Mac out of the market for Countrywide loans.

"While negotiating the volume discount with Fannie Mae, Countrywide CEO Angelo Mozilo leveraged his company position as the nation's largest residential housing lender to extract lower 'guarantee fee' from Fannie Mae CEO Jim Johnson, who himself received several Countrywide VIP loans. In addition to giving preferential treatment to Mr. Johnson, who received more than $10 million worth of loans, Countrywide gave a series of VIP loans to other senior leadership: Franklin Raines, Jamie Gorelick, Daniel Mudd" Rep. Issa explains.

Criminal investigation and likely indictments is needed against all of the Countrywide officials and people who knowingly accepted below-cost loans for securing business dealings for this company, Issa says. In addition, the investigation Issa conducted revealed information about executives at Freddie Mac participating in the Countrywide VIP loan program.

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