AG's sister leaves Countrywide board

Former California Treasurer Kathleen Brown, whose brother Jerry is the state's new attorney general, is one of two board members saying goodbye to Countrywide Financial Corp.   

Countrywide was the eighth largest higher cost lender in the state in 2005 -- the year Brown joined the board -- thanks to products like the company's "Fast and Easy" stated income loans, which some mortgage brokers dubbed "Fast and Sleazy."

With the default rate on Countrywide's subprime loans approaching 20 percent at the end of 2006, the company said it was cutting back on exotic "pay option" and adjustable rate mortgages.

Jerry Brown's predecessor as attorney general, Bill Lockyer, helped negotiate with a $484 million settlement with Household Finance in 2002 and last year's $325 million Ameriquest settlement, both of which resolved predatory lending charges.

As the newly-elected attorney general, Brown inherits Lockyer's open investigation into other mortgage lenders. There's been no word on who is under scrutiny, and there's no indication that Kathleen Brown's departure from Countrywide has anything to do with her brother's new job.

Brown, who resigned from the board March 29, is the head of West Coast municipal finance for Goldman Sachs & Co.

In her resignation letter, Brown said she was leaving for "both personal and business reasons," but had "enjoyed my service and the opportunity to work with some of the finest professionals in the financial services industry."

Another longtime board member, Michael E. Dougherty of Dougherty Financial Group LLC, has also announced he won't stand for reelection to the board, but will serve until the company's annual meeting in June.

"My decision to leave the Board is due to my other substantial business commitments that need my full time attention," Dougherty said in his letter. "I have absolutely no disagreement with any matter relating to Countrywide’s operations, policies or practices."
--Matt Carter, Inman News

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