The Real Deal New York

Brooklyn Congressman allegedly covered up his involvement in mortgage scandal

August 16, 2012 09:00AM

A Brooklyn congressman that went after Countrywide’s controversial mortgage lending practices allegedly benefited from a home loan from the very same firm. The New York Post reported Rep. Ed Towns, while serving as investigating chairman of a House oversight committee, issued a subpoena to Countrywide three years ago to probe a selection of its mortgages made to “VIP”s.

But the current chairman of the House committee, California rep. Darrell Issa, accused Towns of manipulating the subpoena to exclude information that would have identified him as a beneficiary of the discounted loans. Bank of America, which bought Countrywide in 2008, confirmed that Towns changed the nature of his subpoena.

Towns received a $194,500 home loan in Brooklyn and a $183,000 mortgage for a second home in Florida from Countrywide. However, he denied getting any special treatment. Issa says the discounted interest rate, at 4.5 percent, was about half a percentage point lower than the rate made available to the public. [Post] — Adam Fusfeld