|Mozilo - "Liar Loans" for unwitting borrowers|
#Occupy Wall Street - want to direct your anger?
NOT ONE executive involved in the mortgage meltdown has been appropriately called to account for their actions leading to the destruction of the American financial system and our way of life.
Conspiracy to Commit Fraud - Pioneer of the "Liar Loan"
Concealed the extent of "Problem Loans" at Countrywide
Bribery and extortion of GSE - Gave favorable loans to FNMA and government executives in exchange for preferential treatment,
Misappropriation of Government Funds - Used BofA's TARP funds to pay legal fees.
Mr. Mozilo should face the same penalty every street-level loan originator would face for the same crimes: 15 Years in prison for each offense.
Mozilo wanted Countrywide to be the number 1 lender in the country. After 20 years of trying he never could amass better than 4% national market share... until the NO DOC loan. Mozilo pioneered the granting of these so-called "Liar Loans" to people who could not afford them, ultimately pushing Countrywide to a 15% market share. These loans were sold to FNMA - executives and managers at FNMA overlooked the poor loan quality in exchange for favorable loan terms. And, the king had no clothes; everyone was making a TON of money, so better to play along. Of course, as soon as the real estate market collapsed, many of these loans started defaulting. Countrywide was rescued by Bank of America, except Bank of America executives didn't know they were rescuing Countrywide. The iceberg of legacy loans was concealed by the practice of "non-recourse" sales and guaranty fee payments.
There are loan officers in jail today for misrepresenting borrower's incomes on these "liar loans", and all they were doing was supporting their families in a competitive market. Literally EVERYONE was doing it. Countrywide told them to. I heard a story of one loan officer who was told by a Countrywide underwriter that she couldn't approve a loan as he had presented it. He should fill out a new application form using higher income numbers, and get the borrower to sign it. She approved the loan. The loan closed.
From Wiki - "A Slap on the Wrist"
On Friday October 15, 2010, Mozilo reached a settlement with Securities and Exchange Commission, over securities fraud and insider trading charges. Mozilo agreed to pay $67.5 million in fines and accepted a lifetime ban from serving as an officer or director of any public company; it is the largest settlement by an individual or executive connected to the 2008 housing collapse. Robert Khuzami, director of the SEC's Division of Enforcement, said in a statement that "Mozilo's record penalty is the fitting outcome for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite." By settling the SEC charges, Mozilo will avoid a trial that could have provided fodder for future criminal charges.
|Angelo Mozilo's House|
In February 2011, the U.S. dropped its criminal investigation into the facts behind that civil settlement.
Post a Comment