But Guy Cecala, publisher of Inside Mortgage Finance, who reviewed the loan documents, said the national average included a one-point charge that was not included in McKeon's loan — a savings of about $3,000. And, contrary to McKeon's statement that he had paid the "garbage fees," Cecala said Countrywide did not charge a processing or underwriting fee or other fees beyond what was required.
Cecala characterized it as a good deal but not one that would raise suspicion.
David Jaffee, a Thousand Oaks mortgage broker, agreed that the costs were low but "nothing out of the ordinary." More important, he said, would be the McKeons' incomes and credit scores.
"If the borrower was able to verify income and had decent credit it would be a no-brainer loan," said Jaffee, a 30-year veteran in the mortgage industry.
Experts said the business bankruptcy might not have affected the loan's interest rate, since McKeon was not personally liable for the business debts and had another income stream. But they said reduced documentation loans were rare at the time and generally would have come with a price markup.
The Times attempted to question McKeon, but he did not return multiple messages left with his office last week.
His pay from Howard & Phil's Western Wear had evaporated from more than $325,000 in 1992 to zero in 1998 as the business struggled to reorganize. It liquidated the following year. In 1995, the last year before the bankruptcy filing, McKeon's financial disclosure showed more than $100,000 in income from Howard & Phil's and a related business. That income source had disappeared by 1998.
Apart from his $136,700 congressional salary, his only other reported source of income that year was investment income totaling less than $30,000. The amount of his wife's salary was not listed.
Times staff writer Richard Simon contributed to this report.