What a guy! Beset with reelection woes, worried sick about his pal Kennedy’s impending death and busy as all hell holding press conferences announcing his crackdown on those who used to lobby him, Connecticut’s own Chris Dodd found it in his heart to send a letter to the FDIC August 7th demanding special treatment for mortgage servicer Carrington Mortgage Services, a wholly-owned subsidiary of a Greenwich hedge fund. Carrington Capital.
“You see?” Dodd crowed, ‘this just proves that my door is open to anyone, rich and poor alike. In this case, rich, but hey – shit happens.”
“The officials were surprised by the senator’s Aug. 7 letter because it followed an eight-month lobbying campaign by a handful of mortgage servicers and benefited one firm more than any other: Carrington Mortgage.”
In March, the Fed expanded the TALF lending program to include bonds backed by money owed to servicers. With this change, servicers can issue new debt using the money they will collect down the road once they get reimbursed. This helps servicers cheaply refinance their existing bank credit lines.
But of America’s independent servicers seeking help through TALF, only Carrington was failing to gain traction.
Forbes says that the letter comes on the heels of Carrington’s CEO Bruce Rose trip to DC to plead his case.
This is all made more controversial because Carrinton is accused of refusing to do reasonable loan modification and providing really crappy service to customers. Last month, Ohio Attorney General Michael Cordray sued Carrington –the first lawsuit of its kind- saying the servicer refused to offer reasonable loan modifications to eligible borrowers and provided incompetent, inadequate and inefficient customer service in connection with its servicing of Ohio mortgage loans.
At the time, Cordray said: “This lawsuit makes it clear that we have reached zero tolerance for this kind of behavior from loan servicers. We’ve tried to work with them, but now we must take action. I am determined to see that mortgage servicers step up, take responsibility and start making it right with Ohioans. No more excuses.”
But sometimes being friends with Chris Dodd means you don’t even have to make excuses.