Angelo Mozilo: Wikis

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Angelo R. Mozilo (born 1938) was the chairman of the board and chief executive officer of Countrywide Financial until July 1, 2008.[1] Condé Nast Portfolio ranked Mozilo second on their list of "Worst American CEOs of All Time".[2]

Contents

Life and career

Mozilo was born in New York City, 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 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.[3]

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.[4]

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.[5]

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Compensation

Mozilo's compensation during the United States housing bubble of 2001–06 has come under scrutiny. During that period, his total compensation (including salary, bonuses, options and restricted stock) approached $470 million.[6]

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.[7]

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.[8]

SEC accusation regarding insider sales

Over many years, Mozilo sold hundreds of millions of dollars in stock personally, [9] 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 trading and securities fraud.[10][11]

"Friends of Angelo" VIP program

In June 2008 Conde Nast Portfolio reported that several influential lawmakers and politicians, including Senate Banking Committee Chairman Christopher Dodd, Senate Finance Committee Chairman Kent Conrad, and Fannie Mae former CEO Jim Johnson, received favorable mortgage financing from Countrywide by virtue of being "Friends of Angelo."[12 ][13]

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.[12 ][14] Dodd nonetheless called for stronger regulation of mortgage lenders and proposed that predatory lenders should face criminal charges.[15]

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."[15]

Other controversies

Shortly after University of San Diego 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.

"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."[16]

See also

References

  1. ^ Countrywide's Mozilo exits stage a fallen hero - Los Angeles Times
  2. ^ http://www.cnbc.com/id/30502091?slide=20
  3. ^ LA Biz Observed: *IndyMac taken over
  4. ^ Gretchen Morgenson (2007-08-29). "Inside the Countrywide Lending Spree". New York Times. http://www.nytimes.com/2007/08/26/business/yourmoney/26country.html?hp=&pagewanted=all. Retrieved 2007-08-29.  
  5. ^ Culprits of the Collapse
  6. ^ [1]
  7. ^ Countrywide Financial Corp Form 8-K, 9/8/2004
  8. ^ "Inside Mortgage mess CEOs defend pay". CNN. 2008-03-07. http://money.cnn.com/2008/03/07/news/newsmakers/ceo_pay/index.htm?cnn=yes. Retrieved 2008-03-08.  
  9. ^ "Why is Countrywide possibly going bankrupt?". HousingPanic. 2007-09-09. http://housingpanic.blogspot.com/2007/09/why-is-countrywide-possibly-going.html.  
  10. ^ Faber, David (June 3, 2009). "SEC Charges Ex-Countrywide CEO with Insider Trading". CNBC. http://www.cnbc.com/id/31108460. Retrieved June 3, 2009.  
  11. ^ U.S. Securities and Exchange Commission (2009-06-03). "SEC Charges Former Countrywide Executives With Fraud". Press release. http://www.sec.gov/news/press/2009/2009-129.htm. Retrieved 2009-06-04.  
  12. ^ a b "Countrywide's Many 'Friends'". Conde Nast Portfolio. 2008-06-12. http://www.portfolio.com/news-markets/top-5/2008/06/12/Countrywide-Loan-Scandal.  
  13. ^ "Countrywide Friends Got Good Loans". Wall Street Journal. 7 June 2008. http://online.wsj.com/article/SB121279970984353933.html?loc=interstitialskip.  
  14. ^ "Angelo's Angel". Wall Street Journal. 2008-06-19. http://online.wsj.com/article/SB121383295591086669.html?mod=googlenews_wsj.  
  15. ^ a b "Angelo's Many 'Friends'".  
  16. ^ "Countrywide Financial Chairman Angelo Mozilo's e-mail sets off a furor". LA Times. 2008-05-21. http://www.latimes.com/business/la-fi-mozilo21-2008may21,0,3064002.story. Retrieved 2008-05-22.  

External links


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