Friends of Angelo

That would be Angelo Mozilo, the embattled chief executive of Countrywide Financial who might have given favorable mortgage terms to some powerful people in government and elsewhere. They include Franklin Raines, who left Fannie Mae amid an accounting scandal in 2004, and James Johnson, who led Fannie Mae from 1991 to 1998 and is currently vetting running mates for Barrack Obama. There is nothing illegal about a mortgage firm treating some borrowers better than others (and to be fair some of us would love a little preferential treatment). But the FoA revelation sure doesn't look good given Countrywide's complicity in the subprime mess. WSJ reporters Glenn Simpson and James Hagerty dug up the numbers.

A comparison of the Fannie Mae officers' terms with interest rates prevailing when they got their loans raises the possibility Countrywide gave them preferential terms. But it's impossible to tell for sure from public documents. An array of other factors also can account for lower-than-average rates, including a borrower's income, total assets and credit score; how big the loan is compared with the home's value; and how many "points" a borrower may have paid upfront in order to get a lower rate. One former Countrywide executive said the mortgage lender, the nation's largest, sometimes granted "moderate" concessions on rates for customers whose loans were handled by Mr. Mozilo or other top officers.

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There is no indication the "Friends of Angelo" loans caused losses to Countrywide. But one borrower who is described by some as a FoA hasn't been able to pay his loan. Former Johnny Carson sidekick Ed McMahon faces possible loss of his home in Beverly Hills, Calif., according to a default notice a Countrywide unit filed in February. A spokesman for Mr. McMahon declined to comment on whether the entertainer dealt directly with Mr. Mozilo in taking out a $4.8 million Countrywide mortgage in 2005.