Chairman Towns Statement on Committee Investigation into Mortgage Crisis |
For Immediate Release: Friday, October 23, 2009 Contact: House Oversight and Government Reform Press Office, (202) 225-5051 Chairman Towns Statement on Committee Investigation Into Mortgage CrisisWashington, DC – Chairman Edolphus “Ed Towns (D-NY) today made the following statement on the House Oversight and Government Reform Committee’s investigation into the role of mortgage lenders in the financial services crisis and the economic recession. “The actions of mortgage lenders contributing to the foreclosure and financial crisis are of serious concern to many Americans and to the Members of this Committee, said Chairman Towns. “That is why I have opened an investigation into whether mortgage companies employed deceptive and predatory lending practices, or improper tactics to thwart regulation, and the impact of those activities on the current crisis. Numerous reports over the past year indicate widespread predatory lending practices by some of the nation’s largest banks, including subprime mortgage lending, deceptive marketing, predatory and deceptive mortgage products, predatory primary and secondary mortgages, predatory and deceptive refinancings, and predatory foreclosures. Moreover, it appears that certain classes of borrowers were targeted for these predatory and deceptive mortgage products and practices, based on age, race, and income. Examples of possible predatory mortgage products include subprime mortgages, certain adjustable rate mortgages, and so-called “option-pay or “option-ARM mortgages. In addition, there are indications that members of the financial services industry conspired to deceive regulators and the public to obtain regulatory favors, lax enforcement, and regulatory protection for schemes intended to deceive and defraud home purchasers, homeowners, regulators, and investors. As part of the investigation, the Committee is demanding information from the nation’s largest mortgage lenders, including Wells Fargo, Bank of America (including Countrywide), JP Morgan Chase (including Chase Manhattan Bank), Citigroup, Residential Capital (GMAC), and U.S. Bank Home Mortgage, as well as issuing a subpoena for records on Countrywide Financial’s VIP program. “It is my goal to work through this matter in a bipartisan fashion and conduct a complete review of the role of mortgage companies in the current financial crisis. As part of this, we need to clarify unanswered questions about Countrywide Financial’s VIP program, so I am issuing a subpoena to gather information about how that program worked and whether it provided special benefits to government officials. I am prepared to issue additional subpoenas if other companies fail to respond to our document requests, Towns said. Towns added, “In line with the commitment to an ethical and accountable Congress, the subpoena to Countrywide covers records that could show special treatment for Members of Congress. For reasons of jurisdiction, the subpoena directs that any such documents be sent to the House Committee on Standards of Official Conduct. “Finally, I would like to address the widespread false reports that I locked Republicans out of their offices earlier this week. These reports are incorrect. Republicans have at no time been denied access to the hearing room or their offices. The Ranking Member and I discussed how we can cooperate to prevent violations of House rules governing the use of hearing rooms, we reached agreement, and I consider this matter resolved. Text of the Chairman’s letter to Wells Fargo, Bank of America (including Countrywide), JP Morgan Chase (including Chase Manhattan Bank), Citigroup, Residential Capital (GMAC), and U.S. Bank Home Mortgage is included below. ###
Friday, October 23, 2009 Dear, The Committee is issuing a subpoena today to Countrywide Financial in this matter because they did not provide information in response to a letter request. The Committee is prepared to issue additional subpoenas in this investigation, but will first give companies an opportunity to voluntarily comply. To aid in our investigation of these very serious issues, please provide information and records in response to the following questions, for each of the years 2000-2008: |
Committee On Oversight and Government Reform
U.S. House of Representatives | 2157 Rayburn House Office Building | Washington, D.C. 20515 | (202) 225-5051