Following is my comment tonight to the Washington Post in response to their article - Senators Deny Knowing Of Home Loan Favoritism ~
I've been waiting for this story to break and as usual the media misses the important part!
Let's see the reporters ask the real questions - did any of these individuals take a reduced doc loan, and if so, did their loan application reflect their true income?
Were any of these loans (or any others made to the committee members for that matter) reduced document loans like Countrywide's Fast N Easy program. In the industry we referred to these as the "Fast N Sleazy" loans because we all knew of loan officers and their clients that were overstating the income to qualify, even though Countrywide denies this happens. These fraud attracting loan products are now going the way of the dinosaur and I'd love to know if Dodd and Company were party to any of these loans and inflated their income. It wouldn't be hard to find out.
With the sole exception of the acceptance of the 8 unit property in violation of company policy, the rest of the stuff in this article is pretty innocuous.
I've been a mortgage guy for almost 20 years. The rates quoted in the article may or may not be "market rates." The LOWEST 30 year fixed I've ever closed was at about 5%. One could have conceivably gotten into the low 4%'s with paying 3-4 discount points. We also don't know if these loans were Adjustable rate loans which would have carried a lower rate.
As already mentioned in other comments, the "waiving" of points may or may not be a big deal. The amounts listed in the article happen every day. And waiving 1% on a $1,000,0000 loan is certainly no big deal - the loan officer may have still made $5k to $6k even after waiving 1%!
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