How Big is the Big Bad Bailout?
How much will Countrywide benefit from Sen. Dodd’s FHA bailout? The Journal does the math:
If borrowers and lenders take full advantage of this new federal program, and Countrywide loans go south at roughly the same rate as those from other lenders, this suggests a potential taxpayer bailout of more than $25 billion for Countrywide-originated loans.
So here’s what we have: Sen. Dodd (and others with connections to the banking industry) takes two VIP loans from Countrywide’s exclusive programfor friends of its president. A few years later, Countrywide realizes it’s in hot water with some risky loans. Subsequently, Dodd introduces a bill that would provide a massive bailout to the lender that gave him special treatment. What a sorry story.