Angelo Mozilo, a founder of Countrywide Financial who presided over the credit giant’s meteoric rise and then its collapse during the 2008 financial crisis, died on Sunday. He turned 84.
His family confirmed his death in a statement released from Santa Barbara, California, by the Mozilo Family Foundation, the family’s philanthropic organization. It did not specify a cause or say where he died.
Countrywide was a key player in the run-up to the housing crisis, when looser financial regulation allowed lenders to aggressively sell high-risk mortgage products to would-be homeowners, contributing to a house price bubble. That blowout, in 2008, when home prices collapsed, sent the US economy into a prolonged recession.
Mr. Mozilo, the son of a Bronx butcher who worked his way through Fordham University, became one of the most recognized executives to deal with the crisis. Motivated by his humble beginnings, he had built Countrywide into one of the nation’s largest mortgage lenders by the early 2000s. But he still wasn’t satisfied: He wanted the company to achieve a market share of 30 to 40 percent, far more than any lender had ever achieved.
Countrywide began promoting sales of complex mortgages to potential homeowners with weaker financial profiles, a group often referred to as “subprime” borrowers. The loans required little or no money and placed many borrowers in homes they otherwise couldn’t afford. Many of these loans, known as “no-doc” loans, did not require income verification.
That go-go sales culture fueled the company’s growth and profits, but ultimately led to its demise. As the housing market collapsed and borrower defaults soared, Countrywide’s lending practices came under scrutiny from legislators, regulators and consumer advocates.
Financial pressures began to mount and the company, located in Calabasas, California, west of Los Angeles, was acquired by Bank of America in 2008 for the sale price of $4 billion. But the purchase ended up costing Bank of America billions more in legal and other costs it inherited.
At the time, nearly 150 mortgage lenders had gone bankrupt, many of which were taken over by healthier institutions.
Mr. Mozilo, recognizable by his tight suits and deep tan, continued to defend his party throughout the ordeal. “Countrywide was 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 purchased the company.
Regulators had a decidedly different opinion. In October 2010, Mr. Mozilo agreed to pay $22.5 million to settle federal charges that he had misled investors about Countrywide’s risky loan portfolio. At the time, the settlement was the largest fine imposed by the Securities and Exchange Commission on a senior executive of a publicly traded company.
As part of the deal, Mr. Mozilo, who neither admitted nor denied wrongdoing, agreed to forfeit $45 million in “ill-gotten 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 about 12, he began helping his father, Ralph Mozilo, in his butcher shop, cleaning floors and cutting chickens, according to his membership profile with the Horatio Alger Association.
By the time he was 14, he had his first job in the financial industry, as an errand boy for a Manhattan mortgage company.
He was married to Phyllis (Ardese) Mozilo for over 50 years. She died in 2017. He is survived by their five children, Christy Mozilo Larsen and David, Elizabeth, Eric, and Mark Mozilo; and 11 grandchildren.
Mr Mozilo said he had been unfairly portrayed as the culprit of the housing crisis when dozens of other lenders were involved, a perspective echoed by his family.
“Regardless of how people outside the industry view this man, insiders know what an incredible force he was,” Eric Mozilo said in a LinkedIn post Tuesday.
“He was an excellent father and a legend in the mortgage industry,” he added during a phone call.
Mr. Mozilo and a partner, David Loeb, who died in 2003, started Countrywide in 1969 with $500,000. Within a few decades, the company had grown from a conservative mortgage lender, originally based in New York, to the largest mortgage lender in the United States. As of 2007, it had 900 offices and $200 billion in assets and made $500 billion in loans that year.
In the early 1990s, after government data showed that lenders disproportionately turned down minority borrowers for home loans, Countrywide saw an untapped market and began offering more loans to 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 reject these people,” Mr. Mozilo later told the congressional committee investigating the crisis. The loan officers, he said, “had very static, rigid guidelines.”
As he saw it, Countrywide helped break down the racial and economic barriers to homeownership.
So he put the staff through “sensitivity training” and hired more black and Hispanic employees. Countrywide quickly began approving one loan for every two applications reviewed, said Mr. Mozilo. Previously, it approved one loan for every four applications. The new loans “have delivered,” he said.
But that performance did not last. In 2006, Mr. Mozilo labeled some of the company’s riskier loans as “poison,” according to internal Countrywide emails released by the SEC in 2009. “In all my years in the business I have never seen a more toxic” product, wrote in one email.
More than a decade later, Mr. Mozilo remembered how difficult that period was for his family, but continued to defend his legacy and that of his company at a financial conference in Las Vegas.
“Of course it bothers me,” he said according to a 2019 CNBC report. “It tarnished my reputation, it affected my family, it had a big impact on my whole life. So I cared. After that, many years passed, and my wife died, and I turned 80 years old, and now I don’t care anymore. There are other things more important in life.”
Ben Protess reporting contributed.