Angelo Mozilo: Florida wishes you'd visit
Wake up and good morning. It's been a good 20 years since I first met Angelo Mozilo, the California founder of what became the Countrywide mortgage lending giant. And then, as now, he struck (I was in Washington DC back then) me as the mortgage industry's incarnation of actor George Hamilton: Tan-obsessed, big on sartorial splendor and sure everyone in power would see things his way.
Well, times have changed. And the legal power in Florida wants Mozilo to visit the state. Just not for the sunshine. A U.S. District Court judge remanded a lawsuit filed by the state of Florida against Mozilo back to Broward County Civil Court. The action came in a case filed by Florida Attorney General Bill McCollum alleging that Mozilo and Countrywide violated the state's deceptive trade practices act by placing consumers in loans they could not afford or with rates that were false or misleading.
Let's be perfectly clear. Mozilo, the son of a butcher, went overboard pushing risky mortgages. He should be held accountable. But where on earth was McCollum -- in fact, any legal and financial regulator -- all those years when mortgages were approved and handed out to anyone who could scrawl an X on a signature line and, presumably, did not drool too much. No viable proof of regular income? No problem! Taking on an adjustable rate mortgage that, should interest rates rise, will prove unaffordable? Not an issue!
It matters little that Bank of America bought Countrywide last yearand settled the Florida case without admitting or denying guilt. The litigation against Countrywide has been resolved. But litigation against Mozilo will continue in Broward County Circuit Court. Here's the court order remanding the lawsuit back to Broward.
You see, this is the part of the housing-mortgage debacle cycle when the country is looking to assign blame for the mess we're in. And Mozilo ranks high. As state attorney general McCollum said in a release:
"Angelo Mozilo should absolutely face a Florida court and Florida’s citizens for his business practices, especially those which victimized Florida homeowners. I am pleased the federal court sent the case back to our state court and my office will continue to aggressively pursue its case against Mr. Mozilo."
Do people want blood? Some do. Mozilo was unlucky enough to be named to Time magazine's notorious list "25 People To Blame for the Financial Crisis." Mozilo ranks third among the 25, behind No. 2 Christopher Cox, the comatose (and former) chair of the Securities and Exchange Commission, and No. 1 ex-Texas Sen. Phil Gramm whose deregulate-without-oversight mantra helped get us all so deeply in this mire.
Mozilo was a busy and hungry guy. According to Portfolio magazine (RIP, since the magazine's shutting down, another recession victim), Countrywide operated a program that provided loans on favorable terms to V.I.P. borrowers. In doing so, the nation’s largest mortgage lender curried favor with politicians, government officials, and business partners who were in a position to influence policy, profits, or public opinion.
Mozilo's still tan. And still rich. He'll put up a big legal defense before being dragged back to Florida. But his reputation is clearly shot. In fact, so is his "Countrywide" brand. Now that Bank of America owns it, it's feverishly taking down the Countrywide name and replacing it with its own. No sense in reminding future customers about that tainted name.
-- Robert Trigaux, Times Business Columnist