Countrywide's Mozilo exits stage

Source: Exec Digital USA

Date :7/1/2008 2:16:09 AM

Countrywide Financial Corp, a victim of the mortgage meltdown, today flies a new flag and loses a legend.

Fallen hero Angelo Mozilo will today, July 1, step down as the head of Countrywide Financial Corp, the company he founded 39 years ago and built into the largest mortgage lender in the US.

“A great American story,” Countrywide has been crippled by misadventures in high-risk mortgages and will be taken over by Bank of America Corp today.

Bank of America, which initially invested US$2billion in Countrywide last August, agreed in January to buy the lender outright for an additional US$4billion in stock. The deal's value has since tumbled to US$2.5billion as Bank of America's share price has declined, partly out of concern about the wisdom of the acquisition. Early last year, Countrywide was worth more than US$25billion on paper.

Ken Lewis, Bank of America's Chief Executive, made it clear from the start that Mozilo would depart after the deal closed, with Bank of America's more conservative management and lending styles to prevail.

It is not clear what Mozilo, the 69 year old son of a Bronx butcher, plans to do in the future; it is assumed he’ll spend more time with his family and defending himself against lawsuits.

Fallen hero

Mozilo’s lust to have Countrywide become the biggest provider of every kind of mortgage is seen as his downfall.

He was sued last week by the attorneys general of California and Illinois, who allege borrowers were buried in unaffordable loans as a result of unfair and misleading business practices. Florida filed a similar suit yesterday, June 30.