Angelo Mozilo, the mortgage giant in the housing meltdown, has died at the age of 84

Angelo Mozilo, the founder of Countrywide Financial who presided over the lending giant’s rapid rise and then its collapse during the 2008 financial crisis, died Sunday. He was 84.

He was pronounced dead, in Santa Barbara, California, on a permit By the Mozilo Family Foundation, the family’s charitable organization. Did not specify a reason.

Countrywide was a major player in the run-up to the housing crisis, when lax financial regulations enabled lenders to sell risky mortgage products to potential homeowners, contributing to a housing price bubble. This explosion in 2008, when home values ​​collapsed, led to a prolonged recession in the American economy.

Mr. Mozilo, the son of a Bronx butcher and worked his way up at Fordham University, has become one of the most high-profile executives connected to the crisis. Motivated by humble beginnings, he built Countrywide into one of the largest mortgage lenders in the country by the early 2000s. But he was still not satisfied: He wanted the company to have 30 to 40 percent market share, far more than any one lender had achieved.

Countrywide began paying sales of complex mortgages to prospective homeowners with weaker financial profiles, a group often referred to as “mortgage” borrowers. The loans required little or no money, and placed many borrowers in homes they would otherwise not be able to afford. Many of these loans, known as “no-document” loans, required no income verification.

The fast sales culture propelled the company’s growth and profits, but ultimately led to its downfall. With the housing market crashing and borrower default rates soaring, Countrywide’s lending practices have come under the scrutiny of legislators, regulators, and consumer advocates.

Financial pressures began to mount, and Bank of America acquired the company, which is based in Calabasas, California, just west of Los Angeles, in 2008 at an incomplete sale price of $4 billion. But the purchase cost Bank of America billions more in legal and other costs, which it inherited.

At that time, nearly 150 mortgage lenders had failed, and many of them had been taken over by healthier institutions.

Mr. Mozilo, recognizable by his dapper suits and tan, continued to defend his company throughout the ordeal. “Countrywide is one of the greatest companies in the history of this country,” he told congressional examiners in September 2010, more than two years after Bank of America bought the company.

The organizers certainly had a different view. In October 2010, Mr. Mozilo agreed to pay $22.5 million to settle federal charges that he misled investors about Countrywide’s risky loan portfolio. At the time, the settlement was the largest penalty ever imposed by the SEC against a senior executive at a public company.

As part of the deal, Mr. Mozilo, who neither admitted nor denied wrongdoing, agreed to forfeit $45 million in “illicit gains” to settle insider trading and other charges.

Angelo Robert Mozilo, the eldest of five children, was born on December 16, 1938 in the Bronx, where he grew up. When he was 12, he began helping his father, Ralph Mozilo, in his butcher shop, sweeping floors and cutting up chickens, according to him. his profile In the Horatio Alger Society.

By the time he was 14 years old, he had his first job in the financial industry, working as a messenger boy for a Manhattan mortgage company.

He was married to Phyllis (Ardese) Mozilo for over 50 years. She passed away in 2017. He is alive with their five children, Kristi Muzilo-Larsen, David, Elizabeth, Eric, and Mark Muziello. and 11 grandchildren.

Mr Mozilo said he was unfairly portrayed as the villain in the housing crisis when dozens of other lenders were involved, a perspective echoed by his family.

“No matter how people outside the industry might view this guy, insiders know how incredibly powerful he is,” said Eric Mozilo on LinkedIn. mail Tuesday.

“He was an excellent father and a legend in the mortgage industry,” he added during a phone call.

Mr. Mozilo and partner David Loeb, who died in 2003, started Countrywide in 1969 with $500,000. Within a few decades, the company has grown from a conservative home lender, originally based in New York, to the largest mortgage lender in the United States. As of 2007, it had 900 offices, $200 billion in assets and made $500 billion in loans that year.

In the early 1990s, after government data revealed that lenders were disproportionately rejecting minority borrowers for home equity loans, Countrywide saw an untapped market and began offering more loans in low-income and minority communities.

“When I first brought the loans into the office, they said, ‘You’re crazy, you’re crazy, don’t do this.’ There’s a reason we turned these people down,” Mr. Mozilo later told a congressional committee investigating the crisis. Loan officials, he said, “had unwavering and unfailing guidance.” Very flexible.”

As he saw it, Countrywide was helping break down racial and economic barriers to homeownership.

So he put the employees through “sensitivity training” and hired more black and Hispanic employees. The country soon began approving one loan for every two applications reviewed, according to Mr Mozilo. Previously, it approved one loan for every four applications. He said the new loans “did very well”.

But this performance did not last. In 2006, Mr. Mozilo called some of the company’s riskier loans “poison,” according to internal nationwide emails issued by the SEC in 2009. “In all my years in the business, I’ve never seen a riskier product.” he wrote in one email.

More than a decade later, Mr. Mozilo recalled how difficult that period was for his family, but he continued to defend his legacy and that of his company at a financial conference in Las Vegas.

He said, “Of course it bothers me.” CNBC’s 2019 report. “It affected my reputation, it affected my family, and it had a profound impact on my whole life. So I cared. Then many years passed, my wife died, I turned 80, and now I don’t care. There are other things that are more important in life.”

Ben Proteas Contribute to the preparation of reports.