Real Estate Loan Controversy
In 1994, columnist Jack Anderson reported that Stephanopoulos sealed an $835,000 commercial real estate deal consisting of a two-story apartment including an eyeware retailer with a below-market loan rate from a bank owned by Hugh McColl who had been called by President Clinton "the most enlightened banker in America". A NationsBank commercial loan officer said that this loan did "not fit our product matrix" as banks typically only offer such loans for customers with deep pockets and on a short-term adjustable rate basis. Stephanopoulos' real estate agent explained that "nobody making $125,000 could qualify for the property without the commercial property (lease)". One former senior bank regulator told Anderson that, "If his name were George Smith, and he didn't work in the White House, this loan wouldn't have gotten made." Regarding the controversy, NationsBank stated, "The loan described by Jack Anderson as a commercial loan to George Stephanopoulos was, in fact, a residential mortgage loan. At the time the loan commitment was made, Mr. Anderson (or his imaginary 'George Smith' who 'doesn't work in the White House') could have walked into any NationsBanc Mortgage Company office in the D.C. area and received the same excellent rate and term for the same deal." However, Stephanopoulos' realtor states that he would not have qualified for the loan without the commercial property rent. One NationsBank source states that the issuance of a residential loan on mixed-use properties is such a rarity that it was not even addressed in the "NationsBanc Mortgage Corporation's Program Summary" or its "Credit Policy Manual". A NationsBanc underwriting memo revealed that one of the three restrictions for mixed-use properties is that "the borrower must be the owner of the business entity". The source claims that NationsBanc told the listing agent that, "We're not (interested in mixed-use properties), but we do have an appetite for this particular loan." NationsBank's primary regulator at the time was Comptroller of the Currency Eugene Ludwig, a Rhodes scholar who attended Yale Law School with President Clinton, and who had been asked to investigate NationsBank by Democratic congressmen Henry B. Gonzalez and John Dingell.
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