Directors and officers of Countrywide Financial, the beleaguered mortgage lender, must answer shareholder accusations of insider trading and an overall failure to monitor lending practices that led to the company’s collapse, a federal judge in California has ruled. Read the rest of this entry »

Some would call him the black sheep. I like to call him the tan sheep.

Wall Street Journal:

Countrywide’s reaction to the crisis was to push for more market share in the first half of 2007, aiming to benefit from the collapse of rivals. That backfired when Countrywide could no longer find buyers for many of the loans it had originated, leaving the company stuck with billions of dollars of high-risk mortgages. Former executives say Countrywide, which still accounts for about one in every seven home loans made in the U.S., was so focused on increasing volume that it neglected quality control.

Mr. Mozilo made things worse for himself by postponing his retirement and by making frequent, heavy sales of Countrywide stock. He offered discounts on loans to friends so frequently that FOA — for Friends of Angelo — became a familiar loan type among employees. He was quick to dismiss criticism from analysts and shareholders.

Mafia boss, I mean Countrywide CEO, Angelo Mozilo knew exactly what he was doing the whole time folks. This was all part of the master plan to rule the lending land. I liken Mozoilo to a gang leader that led his “lending gang” across the country and disregarded regulation and laws as he continued his quest to rule the streets.

His desire to be #1 at ALL costs may be the straw that broke Mozilo’s back.

WSJ:

When asked last year about proposals to give shareholders a nonbinding vote on compensation, he said: “The shareholders have no clue” how much Countrywide needed to pay to attract talent.

When an analyst fretted in 2004 about Mr. Mozilo’s sales of Countrywide stock, he snapped that those who had construed his share sales as bearish were “losers.” Mr. Mozilo stepped up those sales in late 2006 and unloaded more than $130 million of stock in the first half of 2007. That undermined confidence in the company, demoralized some of his own employees and drew a continuing investigation by the Securities and Exchange Commission. He also faces a rash of lawsuits from investors, borrowers and state regulators.

Mr. Mozilo has said his stock sales were lawful and defended his right to dispose of what he regards as well-earned compensation. The problem in America, he said in an interview last year, is that “people are reviled if they make what people think is too much.” In Mr. Mozilo’s view, “if anybody makes a billion dollars, that’s America. That’s terrific!”

Can anyone say, “Unfair and Deceptive?”

That is exactly how Angelo Mozilo ran Countrywide Financial and Countrywide Home Loans. He was unfair and deceptive to EVERYONE involved in his business. From Countrywide clients, investors, shareholders, his employees, the media and the American people.

countrwyide home loans - complaint forum for homeowners

As part of its ongoing investigation into executive pay, the Oversight Committee asked Countrywide Financial, Citigroup, and Merrill Lynch to provide documents relevant to the compensation of Angelo R. Mozilo, Charles Prince and E. Stanley O’Neal.

In addition, the Committee invited the chairs of the compensation committees at these companies to testify on March 7 about how the compensation and severance packages for these executives were determined and on what basis they were approved.

The Committee on Oversight and Government Reform is holding a hearing titled, “Executive Compensation II: CEO Pay and the Mortgage Crisis” on Friday, March 7, at 10:00 a.m., in 2154 Rayburn House Office Building.

The hearing will examine the compensation and retirement packages granted to the CEOs of three corporations deeply involved in the current mortgage crisis. This will be the Committee’s second hearing on executive compensation practices. On December 5, 2007, the Committee examined the role of compensation consultants in determining CEO pay.

The following witnesses are expected to testify:

Panel I

• Dr. Susan M. Wachter, Richard B. Worley Professor of Financial Management, The Wharton School, University of Pennsylvania
• The Honorable William F. Galvin, Secretary of State, the Commonwealth of Massachusetts
• The Honorable Brenda L. Lawrence, Mayor, City of Southfield, MI
• Dr. Anthony Yezer, Professor of Economics, The George Washington University
• Ms. Nell Minow, Editor and Co-Founder, The Corporate Library
• Panel II
• Mr. Charles Prince, Former Chairman and CEO, Citigroup
• Mr. Richard D. Parsons, Chair, Personnel and Compensation Committee, Citigroup
• Mr. E. Stanley O’Neal, Former Chairman and CEO, Merrill Lynch
• Mr. John D. Finnegan, Chair, Management Development & Compensation Committee, Merrill Lynch
• Mr. Angelo R. Mozilo, Founder and CEO, Countrywide Financial Corporation
• Mr. Harley W. Snyder, Chair, Compensation Committee, Countrywide Financial Corporation

Click here to view todays video

From the Committee on Oversight and Government Reform

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