Obama VP Vetter Resigns Over Mortgage Questions

WASHINGTON — A manager of Senator Obama's vice presidential search team resigned today amid criticism over his personal loan deals.

"Jim did not want to distract in any way from the very important task of gathering information about my vice presidential nominee, so he has made a decision to step aside that I accept," Mr. Obama said in a statement. "We have a very good selection process under way, and I am confident that it will produce a number of highly qualified candidates for me to choose from in the weeks ahead. I remain grateful to Jim for his service and his efforts in this process."

The former chairman of mortgage lender Fannie Mae, James Johnson, received loans with the help of the CEO of Countrywide Financial Corp., which is part of a federal investigation in the midst of the subprime mortgage crisis. The Republican presidential candidate, Senator McCain, had accused Mr. Obama of hypocrisy for speaking out against Countrywide's tactics while his vetter got favorable rates on three home mortgages totaling $1.7 million.

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Mr. Johnson served on Mr. Obama's vetting team with two prominent Democratic attorneys — a former Deputy Attorney General, Eric Holder, and the daughter of the late President John F. Kennedy, Caroline Kennedy.

Mr. Johnson brought the most experience to the vetting team, having filled the same role for Democratic nominees Senator Kerry in 2004 and Vice President Mondale in 1984. He and Mr. Holder had been holding meetings this week with lawmakers on Capitol Hill to seek their input on possible running mate candidates.

Yesterday, Mr. Obama said Mr. Johnson had a "discrete task" and was performing it well. He suggested the Countrywide connection was not a problem since Mr. Johnson was an unpaid volunteer and hadn't been assigned to work in a future administration.

"I am not vetting my V.P. search committee for their mortgages," Mr. Obama said at the time.