Angelo Mozilo
Encyclopedia
Angelo R. Mozilo was the chairman of the board
and chief executive officer
of Countrywide Financial
until July 1, 2008. Condé Nast Portfolio
ranked Mozilo second on their list of "Worst American CEOs of All Time".
, the son of a Bronx butcher. He received a Bachelor of Science degree from Fordham University
in 1960. In 1969, he and his former mentor
David S. Loeb
, who had already started a mortgage lending company, founded Countrywide Credit Industries in New York. They later moved the headquarters to Pasadena, California
and then to Calabasas, California
in Los Angeles County. Mozilo and Loeb also cofounded IndyMac Bank
, which was founded as Countrywide Mortgage Investment, before being spun off as an independent bank in 1997. IndyMac collapsed and was seized by federal regulators on July 11, 2008.
Since Countrywide was listed on the NYSE in 1984, Mozilo has sold $406 million worth of its stock, mostly obtained through stock option grants. $129 million of this was realized in the 12 months ending August 2007.
In the beginning, Countrywide was a pioneer in the nation-wide non-bank mortgage industry. Mozilo was very concerned with the credit quality of borrowers and the quality of loans. When subprime came onto the scene in the late 80s (Guardian S&L) and 90s (The Money Store), his company did not participate. He privately described the subprime loan mavericks of the 1990s as 'crooks'. However, his company began to lose business to the subprime lenders. He had to compete with them, or keep losing market share. Thus, by the early 2000s, Countrywide had entered subprime, for real.
Perhaps more than any single individual, Mozilo has come to symbolize, and bear the blame for, the subprime mortgage crisis
. In a New York Times feature on October 20, 2008, Henry G. Cisneros, former secretary of HUD
and member of the Countrywide board of directors, describes Mr. Mozilo as “sick with stress — the final chapter of his life is the infamy that’s been brought on him, or that he brought on himself.” CNN
named Mozilo as one of the "Ten Most Wanted: Culprits" of the 2008 financial collapse in the United States.
of 2001–06 has come under scrutiny. During that period, his total compensation (including salary, bonuses, options and restricted stock) approached $470 million.
His compensation also includes payment of his annual country club dues at Sherwood Country Club
in Thousand Oaks, CA, The Quarry at La Quinta
golf club in La Quinta, CA and Robert Trent Jones Golf Club
in Gainesville, VA.
Mozilo testified before the United States House Committee on Oversight and Government Reform on March 7, 2008, calling reports of their pay "grossly exaggerated" in some instances and pointing out that they lost millions as well. He defended the pay: The compensation was a function of how the company did ahead of the mortgage crisis.
and securities fraud
.
reported that several influential lawmakers and politicians, including Senate Banking Committee Chairman Christopher Dodd
, Senate Budget Committee Chairman Kent Conrad
, and Fannie Mae former CEO Jim Johnson
, received favorable mortgage financing from Countrywide by virtue of being "Friends of Angelo."
Senator Dodd received a $75,000 reduction in mortgage payments from Countrywide at allegedly below-market rates on his Washington, D.C. and Connecticut homes. Michael Moore's Capitalism: A Love Story shows on film that this was actually over a million dollars of a sweet-heart mortgage deal. Dodd nonetheless called for stronger regulation of mortgage lenders and proposed that predatory lenders should face criminal charges.
Clinton Jones III, senior counsel of the House Financial Services Subcommittee on Housing and Community Opportunity, and "an adviser to ranking Republican members of Congress responsible for legislation of interest to the financial services industry and of importance to Countrywide." was given special treatment. Jones is now state director for federal residential-mortgage bundler Freddie Mac. Alphonso Jackson
, acting secretary of HUD at the time and long time friend and Texas neighbor of President Bush, received a discounted mortgage for himself and sought one for his daughter. "In 2003, using V.I.P. loans for nearly $1 million apiece, Franklin Raines
, Fannie Mae’s chairman and C.E.O. from 1999 to 2004, twice refinanced his seven-bedroom home, which has a pool and movie theater."
Speaker of the House Nancy Pelosi
's son, Paul Pelosi, Jr., also received a loan with Countrywide. Barbara Boxer
, Adam H. Putnam, Richard C. Holbrooke, James E. Clyburn, and Donna Shalala
are also among those with mortgages from Countrywide.
CBS News
has obtained the following list of then-Fannie Mae employees whose names have been turned over to investigators as having received VIP loans from Countrywide:
invited Mozilo to be the keynote speaker at a conference for "sustainable real estate," DisinviteMozilo.com was created in protest on January 10, 2008. Mozilo pulled out six days later. Shortly after that, Congress invited Mozilo to testify about his compensation.
In May 2008, Mozilo made the news by accidentally hitting "reply" instead of "forward" in response to an e-mail
from a distressed homeowner named Daniel Bailey of North Carolina. Mr. Bailey had created a hardship letter to request a loan modification from Mr. Mozilo on a website forum named LoanSafe.org. Mr. Bailey then sent his request directly to the Office of the President of Countrywide and this was Angelo Mozilo's reply.
, director of the SEC's Division of Enforcement, said in a statement that "Mozilo's record penalty is the fitting outcome for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite." By settling the SEC charges, Mozilo will avoid a trial that could have provided fodder for future criminal charges.
This fine represents a small fraction of Mozilo's estimated net worth of $600 million. Countrywide will pay $20 million of the $67.5 million penalty because of an indemnification agreement that was part of Mozillo's employment contract. The terms of the settlement allow Mr. Mozilo to avoid acknowledging any wrongdoing.
In February 2011, the U.S. dropped its criminal investigation into the facts behind that civil settlement.
Mozilo is cited as one of the persons responsible for the Economic Meltdown of 2008 and named in Time Magazine as one of the "25 People to Blame for the Financial Crisis".
Chairman of the Board
The Chairman of the Board is a seat of office in an organization, especially of corporations.Chairman of the Board may also refer to:*Chairman of the Board , a 1998 film*Chairmen of the Board , a 1970s American soul music group...
and chief executive officer
Chief executive officer
A chief executive officer , managing director , Executive Director for non-profit organizations, or chief executive is the highest-ranking corporate officer or administrator in charge of total management of an organization...
of Countrywide Financial
Countrywide Financial
Bank of America Home Loans is the mortgage unit of Bank of America. Bank of America Home Loans is composed of:*Mortgage Banking, which originates purchases, securitizes, and services mortgages. In 2008, Bank of America purchased the failing Countrywide Financial for $4.1 billion...
until July 1, 2008. Condé Nast Portfolio
Condé Nast Portfolio
Portfolio.com is a website published by American City Business Journals that provides news and information for small to mid-sized businesses. It was formerly the website for the monthly business magazine Condé Nast Portfolio, published by Condé Nast from 2007 to 2009.Portfolio.com is continually...
ranked Mozilo second on their list of "Worst American CEOs of All Time".
Life and career
Mozilo was born in New York CityNew York City
New York is the most populous city in the United States and the center of the New York Metropolitan Area, one of the most populous metropolitan areas in the world. New York exerts a significant impact upon global commerce, finance, media, art, fashion, research, technology, education, and...
, the son of a Bronx butcher. He received a Bachelor of Science degree from Fordham University
Fordham University
Fordham University is a private, nonprofit, coeducational research university in the United States, with three campuses in and around New York City. It was founded by the Roman Catholic Diocese of New York in 1841 as St...
in 1960. In 1969, he and his former mentor
Mentorship
Mentorship refers to a personal developmental relationship in which a more experienced or more knowledgeable person helps a less experienced or less knowledgeable person....
David S. Loeb
David S. Loeb
David S. Loeb was the co-founder of both Countrywide Financial Corp and IndyMac Bank along with former protégé and longtime business partner Angelo Mozilo...
, who had already started a mortgage lending company, founded Countrywide Credit Industries in New York. They later moved the headquarters to Pasadena, California
Pasadena, California
Pasadena is a city in Los Angeles County, California, United States. Although famous for hosting the annual Rose Bowl football game and Tournament of Roses Parade, Pasadena is the home to many scientific and cultural institutions, including the California Institute of Technology , the Jet...
and then to Calabasas, California
Calabasas, California
Calabasas is an affluent city in Los Angeles County, California in the western United States. It is located in the hills in the southwestern San Fernando Valley and the Santa Monica Mountains between Woodland Hills, Agoura Hills, West Hills, and Malibu, California. As of the 2010 census, the city...
in Los Angeles County. Mozilo and Loeb also cofounded IndyMac Bank
IndyMac Bank
OneWest Bank is a federal savings bank with 82 retail branches in southern California and approximately $14 billion in deposits as of February 2010....
, which was founded as Countrywide Mortgage Investment, before being spun off as an independent bank in 1997. IndyMac collapsed and was seized by federal regulators on July 11, 2008.
Since Countrywide was listed on the NYSE in 1984, Mozilo has sold $406 million worth of its stock, mostly obtained through stock option grants. $129 million of this was realized in the 12 months ending August 2007.
In the beginning, Countrywide was a pioneer in the nation-wide non-bank mortgage industry. Mozilo was very concerned with the credit quality of borrowers and the quality of loans. When subprime came onto the scene in the late 80s (Guardian S&L) and 90s (The Money Store), his company did not participate. He privately described the subprime loan mavericks of the 1990s as 'crooks'. However, his company began to lose business to the subprime lenders. He had to compete with them, or keep losing market share. Thus, by the early 2000s, Countrywide had entered subprime, for real.
Perhaps more than any single individual, Mozilo has come to symbolize, and bear the blame for, the subprime mortgage crisis
Subprime mortgage crisis
The U.S. subprime mortgage crisis was one of the first indicators of the late-2000s financial crisis, characterized by a rise in subprime mortgage delinquencies and foreclosures, and the resulting decline of securities backed by said mortgages....
. In a New York Times feature on October 20, 2008, Henry G. Cisneros, former secretary of HUD
United States Department of Housing and Urban Development
The United States Department of Housing and Urban Development, also known as HUD, is a Cabinet department in the Executive branch of the United States federal government...
and member of the Countrywide board of directors, describes Mr. Mozilo as “sick with stress — the final chapter of his life is the infamy that’s been brought on him, or that he brought on himself.” CNN
CNN
Cable News Network is a U.S. cable news channel founded in 1980 by Ted Turner. Upon its launch, CNN was the first channel to provide 24-hour television news coverage, and the first all-news television channel in the United States...
named Mozilo as one of the "Ten Most Wanted: Culprits" of the 2008 financial collapse in the United States.
Compensation
Mozilo's compensation during the United States housing bubbleUnited States housing bubble
The United States housing bubble is an economic bubble affecting many parts of the United States housing market in over half of American states. Housing prices peaked in early 2006, started to decline in 2006 and 2007, and may not yet have hit bottom as of 2011. On December 30, 2008 the...
of 2001–06 has come under scrutiny. During that period, his total compensation (including salary, bonuses, options and restricted stock) approached $470 million.
His compensation also includes payment of his annual country club dues at Sherwood Country Club
Sherwood Country Club
Sherwood Country Club is a private, member owned golf and country club set at the base of the Santa Monica Mountains in Thousand Oaks, California. Sherwood is home to a championship 18-hole Jack Nicklaus signature golf course, driving range and Georgian architecture golf clubhouse...
in Thousand Oaks, CA, The Quarry at La Quinta
The Quarry at La Quinta
The Quarry at La Quinta is a private golf club and gated residential community situated at the base of the Santa Rosa Mountains and Coral Mountains in La Quinta, California. Its scenic eighteen-hole golf course, designed in 1994 by Tom Fazio, features 7,083 yards from the longest tees for a par of...
golf club in La Quinta, CA and Robert Trent Jones Golf Club
Robert Trent Jones Golf Club
Robert Trent Jones Golf Club is a private golf club located in Gainesville, Virginia.RTJ is a par 72 course that can play between the yardages 5,570 and 7,425.-Founding and premises:...
in Gainesville, VA.
Mozilo testified before the United States House Committee on Oversight and Government Reform on March 7, 2008, calling reports of their pay "grossly exaggerated" in some instances and pointing out that they lost millions as well. He defended the pay: The compensation was a function of how the company did ahead of the mortgage crisis.
SEC accusation regarding insider sales
Over many years, Mozilo sold hundreds of millions of dollars in stock personally, even while publicly touting the stock and using shareholder funds to buy back stock to support the share price. On June 4, 2009, the U.S. Securities and Exchange Commission charged former CEO Angelo Mozilo with insider tradingInsider trading
Insider trading is the trading of a corporation's stock or other securities by individuals with potential access to non-public information about the company...
and securities fraud
Securities fraud
Securities fraud, also known as stock fraud and investment fraud, is a practice that induces investors to make purchase or sale decisions on the basis of false information, frequently resulting in losses, in violation of the securities laws....
.
"Friends of Angelo (FOA)" VIP program
In June 2008 Conde Nast PortfolioCondé Nast Portfolio
Portfolio.com is a website published by American City Business Journals that provides news and information for small to mid-sized businesses. It was formerly the website for the monthly business magazine Condé Nast Portfolio, published by Condé Nast from 2007 to 2009.Portfolio.com is continually...
reported that several influential lawmakers and politicians, including Senate Banking Committee Chairman Christopher Dodd
Christopher Dodd
Christopher John "Chris" Dodd is an American lawyer, lobbyist, and Democratic Party politician who served as a United States Senator from Connecticut for a thirty-year period ending with the 111th United States Congress....
, Senate Budget Committee Chairman Kent Conrad
Kent Conrad
Kent Conrad is the senior United States Senator from North Dakota. He is a member of the North Dakota Democratic-NPL Party, the North Dakota affiliate of the Democratic Party...
, and Fannie Mae former CEO Jim Johnson
James A. Johnson (businessman)
James A. Johnson is a United States Democratic Party political figure, and the former CEO of Fannie Mae. He was the campaign manager for Walter Mondale's failed 1984 presidential bid and chaired the vice presidential selection committee for the presidential campaign of John Kerry...
, received favorable mortgage financing from Countrywide by virtue of being "Friends of Angelo."
Senator Dodd received a $75,000 reduction in mortgage payments from Countrywide at allegedly below-market rates on his Washington, D.C. and Connecticut homes. Michael Moore's Capitalism: A Love Story shows on film that this was actually over a million dollars of a sweet-heart mortgage deal. Dodd nonetheless called for stronger regulation of mortgage lenders and proposed that predatory lenders should face criminal charges.
Clinton Jones III, senior counsel of the House Financial Services Subcommittee on Housing and Community Opportunity, and "an adviser to ranking Republican members of Congress responsible for legislation of interest to the financial services industry and of importance to Countrywide." was given special treatment. Jones is now state director for federal residential-mortgage bundler Freddie Mac. Alphonso Jackson
Alphonso Jackson
Alphonso Jackson served as the 13th United States Secretary of Housing and Urban Development . He was nominated by President George W. Bush on January 28, 2004 and unanimously confirmed by the Senate on March 31, 2004. On March 31, 2008, Jackson announced his resignation, effective April 18,...
, acting secretary of HUD at the time and long time friend and Texas neighbor of President Bush, received a discounted mortgage for himself and sought one for his daughter. "In 2003, using V.I.P. loans for nearly $1 million apiece, Franklin Raines
Franklin Raines
Franklin Delano "Frank" Raines is an American business executive. He is the former chairman and chief executive officer of the Federal National Mortgage Association, commonly known as Fannie Mae, who served as White House budget director under President Bill Clinton...
, Fannie Mae’s chairman and C.E.O. from 1999 to 2004, twice refinanced his seven-bedroom home, which has a pool and movie theater."
Speaker of the House Nancy Pelosi
Nancy Pelosi
Nancy Patricia D'Alesandro Pelosi is the Minority Leader of the United States House of Representatives and served as the 60th Speaker of the United States House of Representatives from 2007 to 2011...
's son, Paul Pelosi, Jr., also received a loan with Countrywide. Barbara Boxer
Barbara Boxer
Barbara Levy Boxer is the junior United States Senator from California . A member of the Democratic Party, she previously served in the U.S. House of Representatives ....
, Adam H. Putnam, Richard C. Holbrooke, James E. Clyburn, and Donna Shalala
Donna Shalala
Donna Edna Shalala served for eight years as Secretary of Health and Human Services under President Bill Clinton and has been president of the University of Miami, a private university in Coral Gables, Florida, since 2001. She was awarded the Presidential Medal of Freedom, the nation's highest...
are also among those with mortgages from Countrywide.
CBS News
CBS News
CBS News is the news division of American television and radio network CBS. The current chairman is Jeff Fager who is also the executive producer of 60 Minutes, while the current president of CBS News is David Rhodes. CBS News' flagship program is the CBS Evening News, hosted by the network's main...
has obtained the following list of then-Fannie Mae employees whose names have been turned over to investigators as having received VIP loans from Countrywide:
- Sandra Adams: Fannie Mae Account Associate
- Nitirwork Armstrong: Fannie Mae Director
- Gregg Ayres: Fannie Mae Customer Acct Manager
- Jeffrey Baker: Fannie Mae Business Analyst
- Ingrid Beckles: Freddie Mac VP Default Mgmt
- Cherry Billings: Fannie Mae Asst to CEO
- Christine Buckley: Fannie Mae Sr Assistant
- Sharon Canavan: Fannie Mae Govt Relations/Lobbyist
- Delynn Conley: Fannie Mae Underwriter
- Carla Corpuz: Fannie Mae Senior Underwriter
- Tanguy De Carbonnieres: Fannie Mae Legal Counsel
- Bernard Deane: Fannie Mae Director
- Mollie Dougherty: Fannie Mae Sr Business Manager
- Roy Downey: Fannie Mae Director
- Cynthia Fatica: Fannie Mae Legal Counsel
- Jamie GorelickJamie GorelickJamie S. Gorelick is an American attorney, presently representing BP. She was Deputy Attorney General of the United States during the Clinton administration...
: Fannie Mae Vice Chair - Lizbeth Grant: Fannie Mae Director Tec/Secondary Mkt
- Greta Hamilton: Fannie Mae Manager/Home Loans
- Lester Handy: Fannie Mae Consultant
- James Johnson: Fannie Mae Chairman and CEO
- Jack King: Fannie Mae Manager
- Karen King: Fannie Mae Credit Risk manager
- Gerald Langbauer: Freddie Mac VP Sales
- Derek Lowe: Fannie Mae Technician/Home Loans
- Mary Lee Moriarity: Fannie Mae Sr Underwriter Consult/Lending
- Daniel Mudd: Fannie Mae Vice Chair and COO
- Paulette Porter: Fannie Mae Sr Proj Mgr/Mtg Securities
- Alan Quirion: Freddie Mac Director
- John Radwanski: Freddie Mac Sr Port Director
- Franklin Raines: Fannie Mae Chairman and CEO
- Robin Ramsay: Fannie Mae Customer Acct Manager
- Rebecca Rosena: Fannie Mae Credit Risk manager
- Irwin Rosenstein: Fannie Mae Ass. General Counsel
- Robert Sanborn: Fannie Mae Vice President
- William Shirreffs: Fannie Mae Director
- Joseph Silva: Fannie Mae Servicing Portfolio Manager
- Donna Simpson: Fannie Mae Customer Acct Manager
- Michelle Sorensen: Fannie Mae Sr Business An/Mortgage
- Mary Ann Staley: Fannie Mae Marketing Dir
- Deborah Kay: Tretler Fannie Mae VP Risk Management
- Kirk Willison: Freddie Mac VP Trade Relations/Dir Industry Relations
- David Yoon: Fannie Mae Acct Associate
Other controversies
Shortly after University of San DiegoUniversity of San Diego
The University of San Diego is a Roman Catholic university in San Diego, California. USD offers more than sixty bachelor's, master’s, and doctoral programs...
invited Mozilo to be the keynote speaker at a conference for "sustainable real estate," DisinviteMozilo.com was created in protest on January 10, 2008. Mozilo pulled out six days later. Shortly after that, Congress invited Mozilo to testify about his compensation.
In May 2008, Mozilo made the news by accidentally hitting "reply" instead of "forward" in response to an e-mail
E-mail
Electronic mail, commonly known as email or e-mail, is a method of exchanging digital messages from an author to one or more recipients. Modern email operates across the Internet or other computer networks. Some early email systems required that the author and the recipient both be online at the...
from a distressed homeowner named Daniel Bailey of North Carolina. Mr. Bailey had created a hardship letter to request a loan modification from Mr. Mozilo on a website forum named LoanSafe.org. Mr. Bailey then sent his request directly to the Office of the President of Countrywide and this was Angelo Mozilo's reply.
"This is unbelievable. Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the internet. Disgusting."
Settlement with SEC
On Friday October 15, 2010, Mozilo reached a settlement with Securities and Exchange Commission, over securities fraud and insider trading charges. Mozilo agreed to pay $67.5 million in fines and accepted a lifetime ban from serving as an officer or director of any public company; it is the largest settlement by an individual or executive connected to the 2008 housing collapse. Robert KhuzamiRobert Khuzami
Robert S. Khuzami is currently the director of the Division of Enforcement of the U.S. Securities and Exchange Commission. He is a former United States federal prosecutor and general counsel of Deutsche Bank AG....
, director of the SEC's Division of Enforcement, said in a statement that "Mozilo's record penalty is the fitting outcome for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite." By settling the SEC charges, Mozilo will avoid a trial that could have provided fodder for future criminal charges.
This fine represents a small fraction of Mozilo's estimated net worth of $600 million. Countrywide will pay $20 million of the $67.5 million penalty because of an indemnification agreement that was part of Mozillo's employment contract. The terms of the settlement allow Mr. Mozilo to avoid acknowledging any wrongdoing.
In February 2011, the U.S. dropped its criminal investigation into the facts behind that civil settlement.
In Media
In the documentary film Inside JobInside Job
Inside Job is the fourth studio album by Don Henley, released in 2000, and his last album of all-new material to date.The song "Goodbye to a River" was apparently named after the book of the same title by John Graves...
Mozilo is cited as one of the persons responsible for the Economic Meltdown of 2008 and named in Time Magazine as one of the "25 People to Blame for the Financial Crisis".
External links
- Businessweek Biography
- Forbes 2006 information
- Forbes 2005 information
- Business Biography, answers.comAnswers.comAnswers.com is an Internet-based knowledge exchange, which includes WikiAnswers, ReferenceAnswers, VideoAnswers, and five international language Q&A communities. The Answers.com domain name was purchased by Bill Gross and Henrik Jones at idealab in 1996. The domain name was acquired by NetShepard...
- Bloomberg News Video
- Official Countrywide Biography
- Disvitemozilo.com
- Disvitemozilo Blog
- Cassandra, A Perspective on the Risk Markets