Loading...
Symbols:
Authors:

Countrywide CEO Finds Struggling Homeowners “Disgusting”

by: Freund Investing May 22, 2008 | about stocks: CFC    

Freund Investing

Author's website: By this author:
Become a Contributor Submit an Article
  • Font Size:
  • Print

Facing the potential loss of his home, Daniel Bailey decided to do what his lender, Countrywide Financial (NYSE: CFC), said to do: contact them to work out a deal so he can keep his house. Mr. Bailey didn’t expect, however, to receive a reply from the CEO, Angelo Mozilo.

Mr. Mozilo, meaning to forward the message along with his response to a colleague, accidentally replied to Mr. Bailey’s email saying, “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.”

Now, I don’t know if I even need to say it, but Mozilo’s reply is what is disgusting. This is a guy who led the nation in predatory lending, and is one of the people who is most responsible for the current situation homeowners like Mr. Bailey are in.

Don’t get me wrong, I’m a strong believer in letting real estate speculators - those who bought an additional house banking on the fact that real estate would continue to climb higher - lose their property. That’s simply a fact of life when gambling. What I’m not happy about is letting homeowners who bought just one home, their primary residence, fall flat on their face because they were duped into a bad loan.

There should be assistance for first-time buyers who were taken advantage of. Do I want to assist them? If necessary, but I believe that people like Mr. Mozilo, who raked in hundreds of millions of dollars from these loans, should foot the bill.

It’s apparent from this debacle that Mr. Mozilo doesn’t care at all about the people he swindled money from. In fact, he thinks they’re disgusting. While it’s true he may be directing his “disgusting” comment towards those who created the email template that Mr. Bailey used, that almost makes it worse. The people at LoanSafe.org, those who created the template, are simply trying to help homeowners keep their homes. It’s a non-profit organization created to clean up Mr. Mozilo’s mess. How dare he attack them for helping people keep their homes. Furthermore, it was Countrywide that suggested struggling borrowers contact them!

I wonder how Bank of America (NYSE: BAC), who will likely buy Countrywide, feels about this. It’s certainly not good for their image. It really doesn’t matter much anyway; Mr. Mozilo already made his fortune and he’s probably out golfing somewhere in Florida.

Related Articles

This article has 25 comments:

  •  
    May 22 09:47 AM
    Hey - Didn't Mazilo -claim to be Americas great savor in housing? Don't tell me - he could of ever LIED!!!

    KInd of like them faking all those apprasers is it not - and he gets mad - Now he's caught - and Now the next Great American squatters take place.

    Can You Claim Sexism – If it’s Your Husband – That’s Sexist?

    But then again – Can you call people a sexist – If your one too?
    "Bitches," "Whores," "Sluts," "Trailer Trash" who must be "destroyed" - how Hillary refers to Bill's sex victims and girlfriends.
    "If you want to remain on this detail, get your f*cking ass over here and grab those bags."
    Hillary gave this order to a Secret Service agent who wanted to keep his hands free in case of an incident (as he was trained and supposed to do) and who, therefore, was hesitant to carry her bags. According to countless witnesses over many years, this kind of demanding and demeaning behavior was and still is common for Hillary Rodham Clinton. In fact, Chris Mathews-a left-leaning news commentator who is often an apologist for Democrats-said years later that he had seen Senator Hillary Clinton using a Secret Service agent to carry her bags on the Washington to New York shuttle. "Who in the Senate gets a sherpa to carry their bags for them? Who pays the airfare for this guy? Who pays for his life-style? Who pays his salary to walk around carrying her bags? This looks pretty regal" (Hardball, 08/01, quoted on Newsmax.com, 07/17/01).

    "I am proud that my husband has stood up as president to confront the violence and to protect American women."
    Regarding Bill Clinton's position on the issue of violence against women (Issues2000.org 01/21/03).

    Note: When Bill Clinton saw that Juanita Broaddrick had a swollen lip, he advised, "You'd better put some ice on that" (The Wall Street Journal, 02/19/99).
    Reply
  •  
    May 22 10:35 AM
    This Bailey guy did a cash out refi. He is not some home owner that is in trouble. What did he do with the refi monies? He had lived in the house 16 years so it is not the purchase money mortgage it is a second or refi that is the ARM. No swindle here, Bailey put up his house as collateral and spent the money. It is disgusting that Bailey want's help because he spent money he couldn't repay. No mortgage originator held a gun to his head.....Bailey wanted the cash to support spending. Looses the collateral....so be it.
    Reply
  •  
    May 22 10:52 AM
    If thats true, ktr, then he should lose his home. But Mozilo was attacking people trying to help homeowners. That's not something that I can forgive.
    Reply
  •  
    May 22 10:57 AM
    I don't see how CFC forced anyone to take out these loans. Maybe they were the vehicle, but most of these people either a) were to greedy and saw cheap money signs without reading the fine print or b) using their house as an ATM machine to continue living beyond their means. Either way had it not been CFC it would have been someone else.

    What needs to happen is for people to realize what they can and cannot afford. The government may need to step in with some form of lending reform. And companies need to do a better job of managing risk.

    I have to say I am a little tired of everyone saying it was all the fault of the financial industry. Last I looked at the Arthur Murray catalog - it sure does take two to tango.
    Reply
  •  
    May 22 11:03 AM
    I believe what Mozillo was disgusted with was the fact that so many letter that are coming in are with the same wording as if they all have the same issues. All people have different reasons why they are going bad. They need to contact their lender/mortgage holder and be honest if they want the help...don't use a canned letter to ask for help. Angelo made an honest mistake of sending to the wrong person. He has every right to dislike the canned letters that are flooding his mailbox. These borrowers should be calling customer service as soon as they think they will be late the first time, not when they are rolling 90 days late and ready to go 120.
    Reply
  •  
    May 22 11:32 AM
    Major, while I agree that people should understand the loans they take out, some people simply don't have the capacity to. When those people come in contact with someone pushing the liar loans, and they see their dream of owning a house becoming a reality, of course they'll jump at the chance.

    Yes, it takes two to tango, but potential homeowners didn't stand a chance when barraged with such "fantastic" loan terms. The lenders were in a position of power, both financially and intellectually, and they abused it. Plain and simple.

    exCFC emp,
    So what if they have the same wording? Many individuals who were caught in this scheme are probably not too smart, and need help drafting a letter that maximizes their potential for being helped. CFC specifically TOLD borrowers to talk to them. They didn't say "don't use a template!" And why would they?

    Bottom line, good people who didn't know what they were getting into need help, and Angelo, in his mansion, calls them disgusting. What a sad world we live in.
    Reply
  •  
    May 22 11:49 AM
    Ryan...if they have the intelegence to get on the internet and find that "canned" letter, then they could also dial the toll free 800 number and ask for help before they go too far in default. The thing people don't understand is that these lenders do not want your house. It cost too much to foreclose. They want to help their customer when in need, but cant if you are too far in the hole. If you have a mortgage, then you know how to talk and ask for help. All I am saying is do it early and with your own words.

    By the way...not all of these people were taken advantage of. Most knew what they were doing and now using this as an excuse.
    Reply
  •  
    May 22 12:32 PM
    Here in the West San Fernando Valley, Home to Countrywide and one
    of the worst hit places in the country, only 10% of the people could
    afford a home. The average home went from about 250 grand in 2001 to about 600 grand in 2007. Housing was California's latest gold rush.
    People have been living off their homes for years. NO ONE has to take a loan, and you have a choice as to terms. Some ARM's were
    a gamble for many people, they bet the home would increase before
    the loan went up. Many put up nothing or very little, wanted to flip
    the house and guess what, they bought too high. They took a shot,
    and lost. Just like buying stocks, except you don't have to put all the money up front. Sure some of the loans were risky, but here
    in SoCal people went for the gold. Oh, the 90% who couldn't afford
    to buy, they saw their rents go sky high, due to high home values.
    In Summary, 40 grand down in 2001 got you in a home that you
    could have sold 6 years later and cleared 300 grand. Even today
    after the downturn, you can still net 200 grand on that same investment. Lots of people made fortunes on this gold rush. Anyone
    who spent 550 grand for a 60 year old 1000sqft home in a run down
    neighborhood made a bad choice, but if they have owned it more
    than 5 years, they made money. Oh, I live in a Mobile home here,
    they even were selling for 250 grand and you have to pay rent of
    $800/ month.... guess why? Lot's of speculation, Let's think " Oil "
    if it falls back to $90 a barrel, are you going to blame the guys that
    sold todays contracts for $130 plus. Gee, are the buyers being misled. Just like a superbowl bet, some win, some lose. I think
    countrywide is sick of being a scapegoat. Heck, a lot of people
    made fortunes off those loans.
    Reply
  •  
    May 22 01:10 PM
    Countrywide is a lying sac of you know what - and that includes everyone that made money off there - white-wash fake marketing - make up the market price.

    China Needs Our Help!!!
    Okay we all have tents lying around – Lets figure out a way to get them to the People in China!
    Maybe Feed the Children will help get them there – we just give them – and let the gov - fund feed the children – To get them shipped there.

    China Needs Our Help!!!
    "We need more than 3.3 million tents," Foreign Ministry spokesman Qin Gang told reporters, adding that 400,000 tents have already been delivered. It was the second call for tents from China in recent days.
    "We hope and welcome international assistance in this regard. We hope the international community can give priority in providing tents," he said.
    Reply
  •  
    May 22 01:22 PM
    One more thing - Who's in the money now?

    SHOW US - YOU HAVE SIGNED - TITLE - TO THE PROMISARY NOTE !!!!!!!!!!!!!

    When a Default and Foreclosure Take Place
    When a mortgage goes into default (or when a servicer PRECIPITATES a default by fraud), the servicer typically orchestrates the foreclosure. But very often the servicer does this by engaging the servicers of national “foreclosure specialists”, such as Fidelity, FANDO, and or NDex. These institutional “foreclosure specialists” take charge and call the shots.

    There is also some indication that some foreclosure specialists and/or servicers begin fabircating documents in support of the foreclosure.

    Bear in mind that the Servicer is SELDOM the owner of the mortgage debt except in variant “A” or “B” where whole loan ARMs are held by depository institutions. (The portfolio loans are mostly Treasury Indexed or Cost of Funds Indexed. The LIBOR indexed ARMs are mostly for securitization and sale to foreign investors.)

    As explained above, the servicer is also not typically the HOLDER of the promissory note.

    But servicers are in a hurry to initiate foreclosure and rely upon the fact that most borrowers do NOT defend against the foreclosure suit. So the servicer never bothers to obtain the promissory note before initiating foreclosure.

    Reply
  •  
    May 22 01:57 PM
    The headline of this worthless article is just like most of the others published; a twist of the words in Mozilo's e-mail. He never said he found struggling borrowers disgusting. What he found disgusting is the use a form letter that doesn't properly explain the customer's needs and current status. I am no fan of Mozilo but am tired of the press preying on the words of every executive out there who actually has an opinion.
    Reply
  •  
    May 22 02:00 PM
    Why would you send this to Mozilo and 20 execs. The guy is an idiot. Call customer service. The number is on your bill and all the late notices!

    I can't imagine any CEO who would apprec. being spammed with a form letter from oodles of his company's customers. And I can't imagine that people think this will be helpful.

    (And I do think it is pretty bad for a website supposedly to help customers would facilitate this. How hard is it to hand out the Hope No?)

    I'm suprised he forwarded it. I would have deleted it in his situation.
    Reply
  •  
    May 22 02:11 PM
    Let me translate for the IDIOTS - you bought the loan - but no where is it registered you own - the note.

    Okay - it's like this - say i bought a car - and the loan was sold - but no where is it registered as a lien on the car - you bought the loan - but did not register with the state - you have the lien now.

    same ole same ole with - housing liens - you bought the loan - but didn't place a registered lien with the state or county.

    So basically - investors have a worthless piece of paper they bought.

    You heard of statue of limitations? you had a time limit to file your claim.........

    Countrywide ripped everybody off...........

    Don't you love it??????????



    Reply
  •  
    May 22 02:20 PM
    Emotions trump facts every time. Mozilo does not find borrowers "disgusting" or even the organizations, per se, that try to help borrowers. What he and many of us in the know find "disgusting" is when the "help" turns into prepatuating the myth that it is never the borrower's fault. Sorry, but if you are smart enough to own a home, you are smart enough to know that using your home as an ATM has risk. If you lose, it is your fault, period.

    A few facts:

    Most of the loans in default were not originated by Countrywide but from mortgage brokers, who sold them to Countrywide. If you want to fault Mr. Mozilo for making money, fine. But if you want to look to someone else besides you to blame, go to the mortgage broker who advised you on the loan and the closing attorney who, as a final stop gap, informed you as to the terms and risks of the loan.

    Loan fraud cannot be accomplished by the lender alone. It takes the borrower to sign the documents on all loan products, including the "liar loans". Do not state you make $100k a year working at Walmart if you don't. If the LO puts down on the application that you do, don't sign it.

    I also find it odd that these same people who say that borrowers are too dumb to write their own letters are the same ones that pushed lenders to come up with these loans for these borrowers who are "entitled" to be homeowners.

    Reply
  •  
    May 22 02:29 PM
    What is important to see in Angelo Mozilla is that he looks like a thug - next time you see him on TV take a close look, he looks like an enforcer for the mob!

    sometimes instinct is important, I think he looks and acts like a sleazy guy, so I'm not surprised he's taken alot of people for alot of money. Bank of America already has plans to get rid of him, though not involving cement galoshes i'm sure

    BDO
    Reply
  •  
    May 22 04:41 PM
    He has no sympathy for the little guys. That's all. Imagine for a second you were in this guys shoes who got the email back...
    Reply
  •  
    May 22 04:42 PM
    Richard Weed,

    You sir, are misinformed. The letter sent to Mozilo by Mr. Bailey was not simply a template. He let Countrywide know about his circumstances. Do a little more research before you spew misinformation. You think that every reporter got it wrong and you're right? hah! good one.
    Reply
  •  
    May 22 04:45 PM
    Mozilla is a disgusting human being, he needs to get out of Countrywide now and keep his opinions to hmself.
    Reply
  •  
    May 22 06:45 PM
    Ryan,

    You sir, need to learn to read better. Mozilo's comments were that pieces of the letters he has been inundated with all have the similar/same text from consumer advocacy websites' form letters and credit counsellors. If you need anything else interpreted, please let me know. I know these tricky articles are hard for some people to understand. And I'll leave the spewing to your wife...
    Reply
  •  
    May 22 07:40 PM
    h20 should be barred from alpha site since comments are all over the place and mostly political ........... find a different site h20 ..... like a conservative evangelical born again "c"hristian right winged republican blogosphere...... idiot!
    Reply
  •  
    May 22 09:06 PM
    Richard,

    SO WHAT?! Why does that matter? People need help! He's bashing a site that helps people get the help they need. If that's disgusting, I don't want to know what isn't disgusting to Mozilo. Actually, wait, I already know: ripping people off and cashing out before the fall.
    Reply
  •  
    May 22 11:53 PM
    Ryan,

    Nice sophomoric answer "SO WHAT". Obviously Mozilo feels like a lot of us; that we're tired of the 'woe is me' attitude out there. People got themselves in over their heads as much as Countrywide did. If they weren't saavy enough to understand the documents they signed, then BOO HOO to them. Caveat emptor; the keystone of capitalism...
    Reply
  •  
    May 23 12:21 AM
    Whats rediculous is how the guy said he didnt understand the terms. Arent we sick of the excuses yet?? Take some responsibility people. You were great with the loan until the values started going down. Shame on noone but yourself.
    Reply
  •  
    May 23 12:41 AM
    2nd homes, cash out refi's for new cars, buying homes knowing you can't afford the loan but figuring "prices are going up, I'll just resell it and take 'my' profit", and, in a damning example of our pitiful educational system, people that don't know simple math nor have any understanding of how an ARM worked. Those of us that didn't partake now get to see 'bailouts of the poor hapless "Victims". Recently heard of Countrywide offering to assist a Victim by altering their loan term to 3.75% interest only for 3 years then loan becomes fixed at 5.375% 30 yr amortized. This is significantly better than any loan we who were not greedy can get. My take-away is that greed and stupidity get rewarded in the Barney Frank world.
    Reply
  •  
    May 23 02:35 PM
    somebody weed the yard, please.


    On May 22 06:45 PM Richard Weed wrote:

    > Ryan,
    >
    > You sir, need to learn to read better. Mozilo's comments were that
    > pieces of the letters he has been inundated with all have the similar/same
    > text from consumer advocacy websites' form letters and credit counsellors.
    > If you need anything else interpreted, please let me know. I know
    > these tricky articles are hard for some people to understand. And
    > I'll leave the spewing to your wife...
    Reply
More Comments on CFC »
More by Freund Investing

Investment Resources
Money Management 

Research 

Seeking Alpha provides these ads as a service to its leading contributors
Articles on related themes
Corporate Governance 

Savings & Loan 

Consumer Credit 

Insurance