July 15, 2024
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Angelo Mozilo, former CEO of Countrywide Financial, dies at 84

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Angelo Mozilo, a co-founder and former CEO of Countrywide Financial, died on July 16 of natural causes, his son, Mark, confirmed on July 17. Mozilo was 84 years old.

Countrywide Financial is now known as Bank of America’s home loans branch after being purchased following the 2008 financial crises which saw Countrywide sell for a fraction of what it was once worth.

The Bank of America mortgage operations in Ventura County were once part of Countrywide.

Mozilo also had a home in Montecito and lived there, at least part-time, in recent years, even conducting interviews from his Montecito home in years following the financial crisis.

Mozilo co-founded what would become Countrywide Financial in 1969 alongside his mentor David Loeb, who died in 2003.

Mozilo had propelled Countrywide Financial to become the largest U.S. mortgage lender during the housing boom, but when it burst in 2008, it sent the U.S. economy into a recession, erasing almost $8 trillion to value from the stock market.

That is because the housing bubble that burst was built on exceptionally cheap and available credit extended to homebuyers along with creative options to repay their debt. Countrywide was a pioneer in the field, and, fairly or not, Mozilo became a public face of the financial crisis, according to Bloomberg.

Time magazine, citing Countrywide’s loosened lending standards and exotic mortgages, named Mozilo one of the “25 People to Blame.”

Mozilo’s long tenure as CEO ended in 2008 after Countrywide, running out of funds to finance loans, agreed to be acquired by Bank of America Corp. for $4 billion.

Mozilo sold off much of his stake in Countrywide even as he encouraged shareholders to stick with the company, according to Bloomberg.

His sales, conducted under a prearranged trading program, got him sued in 2009 by the U.S. Securities and Exchange Commission for insider trading and fraud linked to Countrywide’s sale of substandard mortgages whose risks were allegedly hidden from the public.

Mozilo settled the suit by agreeing to repay $45 million in ill-gotten profits and $22.5 million in civil penalties, while admitting no wrongdoing. He accepted a lifetime ban from serving as an officer or director of any public company.

It was the largest settlement by an individual or executive connected to the housing collapse and, at the time, the largest SEC penalty ever paid by a senior executive at a publicly traded company.

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