Angelo Mozilo

Angelo Mozilo
Angelo Mozilo
Born	16 December 1938 (age 87); Bronx, New York, U.S.
Died	16 July 2023 (aged 84); Montecito, California, U.S.
Occupation(s)	Mortgage banker, businessman
Known for	Co-founder, chairman and CEO of Countrywide Financial

Angelo Robert Mozilo (December 16, 1938 – July 16, 2023) was a prominent American mortgage banker who co-founded Countrywide Financial and served as its chairman and CEO until July 1, 2008. He stepped down shortly after the firm completed a $4.1 billion equity transaction with Bank of America. Countrywide's extensive involvement in subprime mortgage lending positioned it at the heart of the subprime mortgage crisis, which precipitated the housing market's downfall and significantly influenced the onset of the Great Recession. Subsequently, Mozilo agreed to pay over $67 million in penalties to resolve federal allegations concerning his actions at the company.

Early life and education

Born in the Bronx on December 16, 1938, Mozilo was raised by Italian immigrant grandparents. His father worked as a butcher. He attended Catholic educational institutions and began assisting his father at age 12. By 14, Mozilo had started working as a messenger for a mortgage brokerage. He later earned his degree from Fordham University.

Career

In 1969, Mozilo partnered with his mentor David S. Loeb to establish Countrywide Credit Industries in New York. The company subsequently moved its headquarters first to Pasadena and later to Calabasas, California. Alongside Loeb, Mozilo also co-founded IndyMac Bank, originally named Countrywide Mortgage Investment, which was spun off as an independent entity in 1997. IndyMac failed and was taken over by federal regulators in July 2008; Mozilo had no executive position there prior to its collapse.

Following Countrywide’s initial public offering on the NYSE in 1984, Mozilo divested $406 million in stock, predominantly from option exercises, including $129 million during the fiscal year ending August 2007.

Countrywide was a pioneer in establishing a nationwide non-bank mortgage lending operation and grew into one of the largest lenders in the United States. Initially emphasizing loan quality, Mozilo avoided subprime loans during their rise in the late 1980s and 1990s, openly criticizing subprime lenders as "crooks." Nevertheless, to defend its market share against an expanding subprime sector, Countrywide introduced subprime lending by the early 2000s.

Mozilo emerged as a key figure held accountable for the subprime mortgage crisis. In 2008, Henry G. Cisneros—a former HUD secretary and Countrywide board member—remarked that Mozilo appeared "sick with stress" due to his negative public reputation. CNN identified him among the 'Ten Most Wanted: Culprits' responsible for the U.S. financial meltdown, a perspective also presented in the Academy Award-winning documentary Inside Job. Despite this, Mozilo consistently rejected claims that subprime lending caused the crisis, instead blaming it on a credit contraction.

Compensation

Mozilo’s remuneration during the United States housing bubble spanning 2001–06 attracted considerable attention. His aggregate earnings—including base salary, bonuses, stock options, and restricted shares—neared $470 million. His compensation package also covered memberships and annual fees at prestigious golf clubs such as Sherwood Country Club in Thousand Oaks, CA, The Quarry at La Quinta golf club in La Quinta, California, and Robert Trent Jones Golf Club located in Gainesville, Virginia. On March 7, 2008, he appeared before the United States House Committee on Oversight and Government Reform, describing some reports about his income as "grossly exaggerated" and highlighting that he had also experienced financial losses. He defended his pay as being connected to Countrywide’s performance prior to the mortgage downturn.

SEC allegations concerning insider stock sales

Throughout multiple years, Mozilo divested hundreds of millions of dollars worth of shares while publicly endorsing Countrywide's stock and utilizing shareholder capital to repurchase shares in order to bolster the stock price. On June 4, 2009, the U.S. Securities and Exchange Commission formally accused him of insider trading and securities fraud.

Agreement with SEC

On October 15, 2010, Mozilo reached a settlement with the Securities and Exchange Commission regarding charges of securities fraud and insider trading. He consented to pay $67.5 million in penalties and accepted a permanent prohibition from holding any officer or director positions at publicly traded companies. This settlement represented the largest financial penalty imposed on an individual connected to the 2008 housing market collapse. SEC Enforcement Director Robert Khuzami remarked that the unprecedented fine was justified for an executive who withheld vital information from investors. By agreeing to the settlement, Mozilo avoided a trial that might have resulted in criminal prosecution.

The agreement permitted Mozilo to avoid admitting any guilt. Countrywide was liable for $20 million of the total penalty due to an indemnification provision in Mozilo's employment contract. In February 2011, the federal government terminated its criminal inquiry linked to the civil settlement.

Friends of Angelo (FOA) exclusive mortgage program

In June 2008, several prominent lawmakers and political figures, including Senate Banking Committee Chairman Christopher Dodd, Senate Budget Committee Chairman Kent Conrad, and former Fannie Mae CEO Jim Johnson, received preferential mortgage terms from Countrywide through its "Friends of Angelo" initiative.

Senator Dodd benefited from a $75,000 reduction in mortgage payments at rates below market value on multiple properties, despite his public stance advocating for tougher regulations on mortgage lenders and stricter penalties against predatory lending practices. Clinton Jones III, senior counsel to the House Financial Services Subcommittee and advisor to influential Republican members, also received special mortgage treatment; he subsequently became a state director for Freddie Mac. Alphonso Jackson, then acting HUD Secretary and longtime associate of President Bush, secured discounted mortgages for himself and sought similar terms for his daughter. Franklin Raines, former CEO of Fannie Mae, refinanced his upscale residence twice using VIP loans totaling nearly $1 million each time.

Mozilo made substantial political contributions to both parties during the Clinton years but was reportedly registered as a Republican. Other notable recipients of Countrywide’s preferential loans included Speaker Nancy Pelosi’s son Paul Pelosi Jr., Barbara Boxer, Adam H. Putnam, Richard Holbrooke, James E. Clyburn, and Donna Shalala. Records obtained by CBS News revealed that numerous Fannie Mae employees also benefited from VIP loan arrangements with Countrywide.

Personal background and passing

Mozilo wed Phyllis Ardese in 1961. The couple had five children and remained married until her passing in 2017.

He resided in Montecito, California, where he passed away on July 16, 2023, at age 84 due to natural causes.

Media portrayals

The documentary film Inside Job identifies Mozilo as a central figure responsible for triggering the 2008 financial crisis and lists him among Time magazine’s "25 People to Blame for the Financial Crisis". Condé Nast Portfolio ranked him as the second-worst CEO in American history.

The 2011 investigative series Meltdown, produced by Al Jazeera, named Mozilo among those who aggressively promoted subprime lending to borrowers with poor credit records.

Awards and Honors

Recipient of the Horatio Alger Association Distinguished Americans Award
Awarded the Ellis Island Medal of Honor
Honored with the Albert Schweitzer Award
Special Achievement Award for Humanitarian Service from the National Italian American Foundation
Inducted into the National Association of Home Builders Hall of Fame
Lifetime Achievement Award presented by American Banker

External links