Angelo Robert Mozilo, the founder of Countrywide Financial, died from natural causes this weekend, his family announced. He was 84 years old.
Mozilo was a pioneer of the mortgage industry, though a deeply controversial figure.
“Independent of how people outside of the industry may perceive this man, insiders know what an incredible force he was,” his son Eric Mozilo wrote in a LinkedIn post. “Over his span of 50 years, he dedicated his life to delivering the American dream of homeownership to millions. He absolutely insisted on ensuring that minorities were represented, first and foremost. No company, not even up until today, has even come close to the size and dominance of Countrywide. Most of today’s mortgage industry leadership, whether it be an employee, an executive, or even a business affiliate, have had a connection or roots with Angelo and Countrywide. Lastly, he was the best Dad a son could ever ask for.”
Originally from New York City and the son of a Bronx butcher, the brash and charismatic Mozilo founded Countrywide in 1969 with his former mentor David Loeb after receiving a Bachelor of Science degree from Fordham University. For most of its history, Countrywide was known for originating low-risk loans. Mozilo was president of the Mortgage Bankers Association (MBA) in 1991-1992.
He gained full control of the company in 2000, after Loeb’s retirement, and put it in growth mode, becoming the largest mortgage provider in America by 2004, surpassing Wells Fargo and Washington Mutual. In 2006, Countrywide made roughly $10 billion in new loans each work week. The company said its five-year total return at the end of 2006 was 340%, close to 10 times higher than that of the S&P 500.
Mozilo avoided working with subprime loans until the late 1990s, when after noticing that his firm was losing business to competitors, Countywide embraced the type of subprime mortgage lending that eventually led to the housing crisis in 2008. And they did it at a massive scale.
Though he publicly defended the company’s lending practices and said he was championing minority homeownership, Mozilo knew about the poor underwriting standards, according to documents disclosed during government settlements.
“On Sunday I met a mortgage broker from a town near Troy, Michigan who told me that he does all of his business with Countrywide. First I was pleased with the news until he told me why. He said that the area he serves is severely economically depressed and the only way he can qualify his borrowers is the via the pay option ARM,” he wrote to a colleague at Countrywide in 2005. “I have heard this story many times over from mortgage brokers who utilize the pay option for very marginal borrowers for the sole purpose of creating volumes and commissions. We simply cannot and will not allow our company to be victimized by this pervasive behavior and since we can’t control the behavior of others it is essential that we control our own actions.”
When home prices started to fall in 2006 and investors abandoned the mortgage-backed securities (MBS) market in 2007, Countywide began running out of money. With Countrywide needing short-term funding and investigations into its mortgage lending business already swirling, Mozilo sold his company to Bank of America for $4 billion. The bank would ultimately lose about $50 billion on the investment.
Mozilo was charged with insider trading and securities fraud by the U.S. Securities and Exchange Commission (SEC) in 2009, tied to stock sales. According to the New York Times, Mozilo sold $406 million since Countrywide was listed on the New York Stock Exchange in 1984, $129 million realized in the 12 months ending August 2007.
Mozilo settled with the SEC in October 2010 for $67.5 million in fines and accepted a lifetime ban from serving as an officer or director of any public company.
Mozilo became the “face of the financial crisis,” the New Yorker reported.
Mozilo and his wife Phyllis were the founders of The Mozilo Family Foundation, providing scholarships for youth. Phyllis died in 2017. In 2019, Mozilo stepped down from the board’s chairmanship and was engaged in consulting initiatives.
Rob Chrisman first reported the news of his death on Monday.
In 2019, speaking at a hedge fund conference in Las Vegas, Mozilo said he didn’t care that he was still held responsible for the financial crisis.
“A lot of years went by, my wife passed away, I turned 80 years old, and now I don’t care,” Mozilo said, according to a New York Post report. “There’s other things more important in life. Somehow, for some unknown reason, I got blamed for it.”
