Probably not a bribe. But was Carl Seel’s $100,000 mortgage reduction a gift?

by David Safier

Republican Rep Carl Seel got a "principle reduction loan modification" on his home loan to the tune of $100,000 while he was facing foreclosure. That amounted to more than half the principle he owed.

Before his principle was cut in half, Seel had planned to propose an amendment to hold banks accountable during foreclosure negotiations. You know, protection for people like him. But after he got the loan reduction, he dropped the amendment.

For details, go to the KPHO story.

Seel swears there was no quid pro quo. I'm sure he's telling the truth, in a literal sense, anyway. I doubt there was a deal that he would drop the amendment in return for a $100,000 loan reduction.

But there are two other options, both of which give off a very bad odor.

1. Carl Seel might have said to someone at the bank, "You know, I'm planning to propose an amendment that's going to hold you folks accountable when you go after people like me," and a few meetings among bank officials later, his principle was halved.
2. The foreclosure might have had nothing to do with the bank's decision. Bank higher-ups could have decided it would be helpful to make an influential Republican legislator happy by gifting him $100,000 in the form of a loan reduction.

"Bribe" may be too strong a word to use here, but "Gift" seems more than appropriate. And legislators are not supposed to accept gifts, let alone $100,000 gifts.

It would be awfully interesting to know how often that bank writes off 50% of people's loans, just to help them out. If it happens on a regular basis, no problem. If Seel's good fortune was a rare happenstance, it would be also be interesting to know why the bank chose Seel as the beneficiary of its generosity.

This is way above my pay grade as a humble blogger. But journalists can make calls that get answered. And legislators can ask questions. There may be nothing here. But $100,000 is a pretty big nothing.

NOTE: Senator Chris Dodd took a whole lot of flak when he got what looked like a sweetheart deal from Countrywide that saved him about $75,000 on two mortgages in 2003. The question was whether five years later, in 2008, it would affect Dodd's vote on foreclosure legislation. The story made national news. And Dodd, a big deal U.S. Senator, got a deal that was $25,000 less than what little ol' state legislator Seel received weeks before he changed his mind about submitting a foreclosure amendment. I'm just sayin'.