Posted by Jed Lewison on Mon Nov 12, 2007 at 12:09 AM Pacific

Angelo Mozilo, Countrywide's $410 million man, claims reverse racism

Atrios sums up Angelo Mozilo, Countrywide's CEO: Big Shitpile Blames Minorities.

The article Atrios references is an interesting read and offers a good overview of the risky strategy Mozilo used to propel Countrywide to the top of the lender charts. By aggressively pushing exotic mortgage products, Mozilo grew his companies market share from 5.8% to 13.1% in just five years. At first, he looked like a genius, but now that the whole experiment has blown up in his face, he's blaming minorities.

Of course, along the way he "earned" $410 million, selling his personal Countrywide stock while the company bought it bought it on the open market.

Mozilo's blame-the-minorities attitude is cynical and disgraceful. I'm sure his mother wouldn't be proud.

The choice passages:

For decades, as Mr. Mozilo built Countrywide into the nation’s biggest mortgage lender, his bravado had served him well. But the same traits that helped him create the dominant lender left him off balance as the growing mortgage crisis threatened to engulf Countrywide.

To this day, he says his beleaguered company did nothing wrong during the loose-lending craze that is now unraveling nationwide with record foreclosures and mountainous losses. Instead, Mr. Mozilo considers himself and his company to be victims of financial forces beyond their control.

At a conference sponsored by the Milken Institute about two weeks ago, for example, he explained that borrowers forced lenders like Countrywide to lower their mortgage standards. The industry faced special pressure from minority advocates to help people buy homes, he said. Now, the government must help by increasing loan limits at government-sponsored enterprises like Fannie Mae and Freddie Mac, he added.

And:

And until recently, Mr. Mozilo appeared to be playing the game better than many of his competitors, such as Chase Mortgage, CitiFinancial and the IndyMac Bancorp. In late 2006, he received the American Banker’s Lifetime Achievement Award at a dinner in New York. He also became a member of the Horatio Alger Association of Distinguished Americans that year.

But even as he basked in this recognition, problems were developing in Countrywide’s portfolio. In December 2006, for example, company figures show that 5.02 percent of the loans in its servicing portfolio were delinquent, up from 4.11 percent in July 2006. The industrywide rate of delinquencies in late 2006 was 4.95 percent, according to the Mortgage Bankers Association. At the same time that delinquencies were rising, Mr. Mozilo accelerated his already heavy sales of Countrywide shares.

As Mr. Mozilo was selling, Countrywide used precious capital to buy back its own shares in the open market. In November 2006, the company borrowed $1.5 billion to repurchase 38.6 million shares for about $39 each. In the second quarter of 2007, it spent $900 million to buy back shares, also at higher prices than the stock’s closing price of $13.83 on Friday.

Equilar, an independent compensation research firm, calculated that since Mr. Mozilo became chief executive of Countrywide in 1999, he has taken home $410 million. That includes $285 million in option gains. Restricted stock awards worth $6.65 million were excluded from the calculation because they have not been sold.

A Countrywide spokesman said that Mr. Mozilo’s sales were in compliance with securities laws and company policy and were conducted according to a planned selling program — not as a result of fears about the company’s future. He also said that none of Mr. Mozilo’s stock sales were “based on any material nonpublic information.”

Atrios sums up Angelo Mozilo, Countrywide's CEO: Big Shitpile Blames Minorities.

Of course, along the way he "earned" $410 million, selling his personal Countrywide stock while the company bought it bought it on the open market.

Mozilo's blame-the-minorities attitude is cynical and disgraceful. I'm sure his mother wouldn't be proud.

The choice passages:

For decades, as Mr. Mozilo built Countrywide into the nation’s biggest mortgage lender, his bravado had served him well. But the same traits that helped him create the dominant lender left him off balance as the growing mortgage crisis threatened to engulf Countrywide.

To this day, he says his beleaguered company did nothing wrong during the loose-lending craze that is now unraveling nationwide with record foreclosures and mountainous losses. Instead, Mr. Mozilo considers himself and his company to be victims of financial forces beyond their control.

At a conference sponsored by the Milken Institute about two weeks ago, for example, he explained that borrowers forced lenders like Countrywide to lower their mortgage standards. The industry faced special pressure from minority advocates to help people buy homes, he said. Now, the government must help by increasing loan limits at government-sponsored enterprises like Fannie Mae and Freddie Mac, he added.

And:

And until recently, Mr. Mozilo appeared to be playing the game better than many of his competitors, such as Chase Mortgage, CitiFinancial and the IndyMac Bancorp. In late 2006, he received the American Banker’s Lifetime Achievement Award at a dinner in New York. He also became a member of the Horatio Alger Association of Distinguished Americans that year.

But even as he basked in this recognition, problems were developing in Countrywide’s portfolio. In December 2006, for example, company figures show that 5.02 percent of the loans in its servicing portfolio were delinquent, up from 4.11 percent in July 2006. The industrywide rate of delinquencies in late 2006 was 4.95 percent, according to the Mortgage Bankers Association. At the same time that delinquencies were rising, Mr. Mozilo accelerated his already heavy sales of Countrywide shares.

As Mr. Mozilo was selling, Countrywide used precious capital to buy back its own shares in the open market. In November 2006, the company borrowed $1.5 billion to repurchase 38.6 million shares for about $39 each. In the second quarter of 2007, it spent $900 million to buy back shares, also at higher prices than the stock’s closing price of $13.83 on Friday.

Equilar, an independent compensation research firm, calculated that since Mr. Mozilo became chief executive of Countrywide in 1999, he has taken home $410 million. That includes $285 million in option gains. Restricted stock awards worth $6.65 million were excluded from the calculation because they have not been sold.

A Countrywide spokesman said that Mr. Mozilo’s sales were in compliance with securities laws and company policy and were conducted according to a planned selling program — not as a result of fears about the company’s future. He also said that none of Mr. Mozilo’s stock sales were “based on any material nonpublic information.”