Ace of Clubs
Countrywide Financial Corporation, cofounded by Angelo Mozilo in 1969, became the largest mortgage lender in the US in the period leading up to the financial crisis of 2008. Countrywide not only originated the most loans but also aggressively steered customers to the most costly loans so that Countrywide employees and the company could receive bigger fees. Even borrowers with good credit were given subprime loans because Countrywide benefited. The corporation became a $500 billion loan machine, pursuing more and more home loans--thus helping to inflate the housing bubble. Bank of America took over Countrywide in 2008, but the mess created up until then is still in the process of being unravelled. Some highlights: In June 2010, Countrywide Home Loans paid $108 million to settle Federal charges that the company overcharged customers trying to keep their homes. In December 2011, the Bank of America agreed to pay $335 million because of Countrywide’s discrimination against Black and Hispanic borrowers. In October 2009, Angelo Mozilo paid back $45 million in profits and $22.5 million in civil penalties-- without admitting, or being forced to admit, any wrongdoing. • • • Countrywide also did extensive lobbying of and contributing to members ofCongress and employees of Fannie Mae and Freddie Mac, the quasi-governmental housing agencies. Many of these people were designated, within the company, as “Friends of Angelo.” To summarize: Countrywide was an extremely aggressive bad lender, and continued with its onerous practices for as long as it possibly could, greatly exacerbating the mortgage crisis. Right now across the country, families are suffering and many are facing foreclosure because of Countrywide’s actions. References: ‘Inside the Countrywide Lending Spree’ by Gretchen Morgenson, NY Times, August 26, 2007. Time Magazine’s ’25 People To Blame For The Financial Crisis’. ‘SEC Charges Former Countrywide Executives With Fraud’ , SEC Press Release, June 4, 2009.
Art by: PJ McQuade