In 2006, Countrywide originated $461 billion worth of mortgages. In 2007, Mozilo took in $121.5 million from exercising stock options and was awarded another $22.1 million of compensation. Last July, when Bank of America bought Countrywide, the sale price was less than 10 percent of what the company was said to be worth in early 2007.
Yet just last year, with the housing market in a catastrophic state, Mozilo told executives at a conference of mortgage bankers, "You've got to be careful here about blaming ourselves too much."
Yeah… that's what I was worried about too… that mortgage bankers might blame themselves too much.
Mozilo said the real culprits were, in this order: the Federal Reserve, real estate speculators, falling housing prices and regulators. But that's not the funny, or maybe a better word might be "surreal" part of what he said in his speech. Lot's of people would blame the same groups, just not for the same reasons.
Mozilo blamed the Federal Reserve for raising interest rates for too long, crooked real estate speculators, falling housing prices, and regulators' attacks on interest-only and other risky sub-prime mortgages.
Just to make sure no one missing the joke here… it's him.
He blames the Fed for "raising" the rates? Gee, and here I thought the problem might have been keeping them too low for too long. Go figure. Memo to Alan Greenspan… You are so totally off the hook here.
He blames the real estate speculators for being "crooked"? What do you suppose he was doing during the boom? Sitting in his office saying things like: "Oh no, here's another liar loan from one of those crooked speculators… darn them to heck… oh well, let's just package it up, rate it AAA and sell it to some schmuck in China." This is the poster child for loans requiring no documentation blaming the people who took that to mean that they could lie on the application?
He blames the regulators for "attacking" something? Attacking? Oh, I think the regulators are to blame all right, but I would not have come up with the word "attacking" when describing their role. Asleep-at-the-switch, negligent, brain dead, corrupt… those would have all been possibilities for the words I would have used. I always thought that the use of the word "attacking" would imply that the group in question actually did something… and they so clearly didn't. Maybe I'm wrong… I better go look up "attacking". Maybe it has one of them secondary meanings…
And he blames "falling" prices, which seems to me to be a bit like blaming poor and homeless people for the damage caused by Hurricane Katrina. Or, like blaming fallen soldiers for losing a war. I can't seem to find the perfect analogy here, so if anyone thinks of one, please send it on over.
So, last week the U.S. Securities and Exchange Commission filed a civil lawsuit in Los Angeles federal court, accusing Mozilo of making more than $139 million in profits in 2006 and 2007 as a result of exercising 5.1 million stock options.
And so it begins…