HomeLatest NewsFeatured HomebuildersHome Buyer ResourcesBinding ArbitrationResource LinksSubmit ComplaintsView ComplaintsTake Action 101!Report Mortgage FraudMortgage Fraud NewsForeclosure NewsConstruction DefectsHome DefectsPhoto GalleryFoundation ProblemsHomeowner Website LinksHOA Reform
Main Menu
Home
Latest News
Featured Homebuilders
Home Buyer Resources
Binding Arbitration
Resource Links
Submit Complaints
View Complaints
Take Action 101!
Report Mortgage Fraud
Mortgage Fraud News
Foreclosure News
Construction Defects
Home Defects
Photo Gallery
Foundation Problems
Homeowner Website Links
HOA Reform
Featured Topics
Builder Death Spiral
Report Mortgage Fraud
Foreclosure Special Report
Mold & New Home Guide
Special News Reports
Centex & Habitability
How Fast Can They Build Them?
TRCC Editorial
Texas TRCC Scandal
Texas Watch - Tell Lawmakers
TRCC Recommendations
Sandra Bullock
People's Lawyer
Prevent Nightmare Homes
Choice Homes
Smart Money
Weekly Update Message
HOBB Archives
About HOBB
Contact Us
Fair Use Notice
Legislative Work
Your House

 HOBB News Alerts
and Updates

Click Here to Subscribe

Support HOBB - Become a Sustaining Member
Who's Online
ABC Special Report
Investigation: New Home Heartbreak
Trump - NAHB Homebuilders Shoddy Construction and Forced Arbitration
Express News: Cisneros Special
Saturday, 09 August 2008

Cisneros says he didn't get special treatment
Henry Cisneros resigned from the Countrywide Financial Corp. board last fall, but he hasn't escaped the harsh spotlight shining on the company in the aftermath of the mortgage meltdown that began last year.  Some media reports would have the public believe that Cisneros, the former San Antonio mayor and U.S. housing secretary, got special rates on loans from Countrywide alongside two U.S. senators — Christopher Dodd, D-Conn., and Kent Conrad, D-N.D. — now ensnarled in an ethics scandal. Special treatment such as below-market rate loans would violate the Sarbanes-Oxley corporate governance law for directors.

Cisneros says he didn't get special treatment
08/09/2008
David Hendricks

Henry Cisneros resigned from the Countrywide Financial Corp. board last fall, but he hasn't escaped the harsh spotlight shining on the company in the aftermath of the mortgage meltdown that began last year.

Some media reports would have the public believe that Cisneros, the former San Antonio mayor and U.S. housing secretary, got special rates on loans from Countrywide alongside two U.S. senators — Christopher Dodd, D-Conn., and Kent Conrad, D-N.D. — now ensnarled in an ethics scandal.

Special treatment such as below-market rate loans would violate the Sarbanes-Oxley corporate governance law for directors.

Although it appears that other former Cabinet members, such as former Housing Secretary Alphonso Jackson, helped themselves to discounted Countrywide mortgages — called V.I.P. or “Friends of Angelo” loans after Countrywide's ex-chief executive, Angelo Mozilo — Cisneros denies any special treatment. The only evidence available indicates he is telling the truth.

The August issue of Condé Nast Portfolio magazine listed Cisneros as a V.I.P. loan recipient, along with several other people. Buried near the end of the long article are Cisneros' quotes that he took steps to avoid favorable terms. Discussing the Portfolio article last weekend, Fox News called Cisneros a V.I.P. loan participant, without any caveats.

“I did not receive any favorable treatment,” Cisneros said flatly this week, adding he was unaware of the V.I.P loan program while a board member.

Cisneros cited his loan mentioned by the Portfolio article — a $60,000 home-equity line of credit he took out on Nov. 26, 2003, at a 6.5 percent interest rate. Bankrate Inc. confirmed that was in line with prevailing market rates at the time. If anything, 6.5 percent was on the expensive side.

Cisneros took out several mortgage loans during his 2001-2007 tenure on the Countrywide board. Because he owns several properties, Cisneros said he does not remember the details.

The Countrywide officer who processed Cisneros' loans, David Konevesky, declined to discuss the loans, deferring to the media office, now operated by Bank of America Corp. The bank recently acquired Countrywide after the mortgage giant's stock collapsed last year and as an FBI investigation started into Countrywide's lending practices.

The Bank of America media office also declined to reveal Cisneros' loan details, “due to privacy restrictions or for other reasons.”

The V.I.P. loan program overseen by Mozilo was astonishingly brazen in the company's attempts to lobby its interests in government, judicial and business circles. Fees that reduced interest rates, called points, were waived. Initial rates were reduced if market rates later fell. Loan amounts that exceeded Countrywide's income limits were approved, and loan processing was accelerated. The special treatment sometimes shaved thousands of dollars off the loan costs.

Board members were given a number to call whenever they had personal mortgage needs. Konevesky, who handled Cisneros' loans, was not the same loan officer, Robert Feinberg, who provided information on V.I.P. loans to Portfolio magazine.

Cisneros, now chairman of CityView, which provides home builder financing, said he believes the magazine listed him as a V.I.P. loan participant because he was a prominent board member.

Cisneros could not have arranged his loans through a regular Countrywide loan officer because of accountability and legal obligations, said Ralph Ward, publisher of the online Boardroom Insider site, which discusses corporate governance issues.

Cisneros said he wanted to do his business at Countrywide to show confidence in the company. “If you are on the board, you ought to own stock and you ought to do business with it. Imagine if I had taken my business somewhere else,” Cisneros said.

“It's a compelling argument,” Ward said.

Cisneros resigned from the Countrywide board on Oct. 18, 2007.

He may have done all the right things during his tenure on the board. And he continues to champion the just cause of affordable housing.

But reputations come from the company one keeps. Cisneros' association with Mozilo's Countrywide won't exactly shine when Cisneros' legacy is compiled.

http://www.mysanantonio.com/business/columnists/david_hendricks/cisneros_says_he_didnt_get_special_treatment100.html

 
< Prev   Next >
Search HOBB.org

Reckless Endangerment
BY: GRETCHEN MORGENSON
and JOSHUA ROSNER

Outsized Ambition, Greed and
Corruption Led to
Economic Armageddon


Amazon
Barnes & Noble

 Feature
Rise and Fall of Predatory Lending and Housing

NY Times: Building Flawed American Dreams 
Read CATO Institute: 
HUD Scandals

Listen to NPR:
Reckless Endangerman
by
Gretchen Morgenson : How 'Reckless' Greed Contributed
to Financial Crisis - Fannie Mae

NPR Special Report
Part I Listen Now
Perry Home - No Warranty 
Part II Listen Now
Texas Favors Builders

Washington Post
The housing bubble, in four chapters
BusinessWeek Special Reports
Bonfire of the Builders
Homebuilders helped fuel the housing crisis
Housing: That Sinking Feeling

Consumer Affairs Builder Complaints

IS YOUR STATE NEXT?
As Goes Texas So Goes the Nation
Knowledge and Financial Responsibility are still Optional for Texas Home Builders

OUTSTANDING FOX4 REPORT
TRCC from Bad to Worse
Case of the Crooked House

TRCC AN ARRESTING EXPERIENCE
The Pat and Bob Egert Building & TRCC Experience 

Build it right the first time
An interview with Janet Ahmad

Bad Binding Arbitration Experience?
This e-mail address is being protected from spam bots, you need JavaScript enabled to view it
or call 1-210-402-6800

top of page

© 2024 HomeOwners for Better Building
Joomla! is Free Software released under the GNU/GPL License.