Angelo Mosillo, the founder of Countrywide Financial, who oversaw the financial giant’s rapid growth and collapse in the 2008 financial crisis, died Sunday. he was 84 years old.
His death was announced in the Santa Barbara, California area. statement By the Mojillo Family Foundation, a family charity. He did not disclose the cause.
Countrywide was a major player during the housing crisis, which contributed to a housing price bubble as relaxed financial regulations allowed financiers to aggressively sell riskier mortgage products to prospective homeowners. became a great player. In 2008, housing prices crashed and the explosion plunged the US economy into a prolonged recession.
Mosillo, the son of a Bronx butcher, worked at Fordham University and became one of the most prominent executives associated with the crisis. From humble beginnings, he had grown Countrywide into one of the nation’s largest mortgage lenders by the early 2000s. However, he was still not satisfied. He hoped the company would achieve his 30-40 percent market share. This far surpasses what any single financier has achieved.
Countrywide has begun pushing complex mortgage sales to prospective homeowners in financial distress, often referred to as “subprime” borrowers. Because the loans required little or no down payment, many borrowers ended up living in homes they otherwise could not afford. Many of these loans, known as “nodctor” loans, did not require proof of income.
that go go sales culture It drove the company’s growth and profits, but ultimately led to its downfall. As the housing market collapses and borrower defaults soar, Countrywide’s lending practices come under the scrutiny of legislators, regulators and consumer advocacy groups.
As financial pressures began to mount, the Calabasas, Calif.-based company, west of Los Angeles, Acquired by Bank of America In 2008, it was sold at a dump price of $4 billion. But the acquisition cost Bank of America billions of dollars more in inheriting litigation and other costs.
Nearly 150 mortgage lenders went bankrupt at the time, many of them being taken over by healthier financial institutions.
Recognizable by his crisp suit and deep tan, Mr. Mosillo held on to his company throughout the ordeal. “Countrywide was one of the greatest companies in the history of this country,” he told Congressional investigators in September 2010, more than two years after Bank of America bought the company. Told.
The views of regulators were clearly different. In October 2010, Mr. Mosillo agreed to pay $22.5 million to settle federal charges of misleading investors about Countrywide’s dodgy loan portfolio. The settlement was at the time the largest fine ever imposed by the Securities and Exchange Commission on a senior executive at a publicly traded company.
As part of the agreement, Mosillo neither admitted nor denied any wrongdoing, but agreed to forfeit $45 million in “illegal profits” to settle insider trading and other allegations.
Angelo Robert Mosillo, the eldest of five children, was born on December 16, 1938 in the Bronx and was raised there. According to him, he began helping his father, Ralph Modillo, in his butcher shop around the age of 12, sweeping floors and butchering chickens. his member profile At the Horatio Alger Society.
By the age of 14, he had his first job in the financial industry, working as a messenger boy for a Manhattan mortgage company.
He was married to Phyllis (Ardese) Mojiro for over 50 years. She passed away in 2017. He has five children, Christy Mosillo Larsen, David, Elizabeth, Eric and Mark Mosillo. and 11 grandchildren.
Mosillo said he had been unfairly portrayed as a villain in the housing crisis that involved many other financiers, and his family shared similar views.
“Regardless of how people outside the industry perceive this guy, insiders know how incredible power he was,” Eric Mosillo said on LinkedIn. director on tuesday.
“He was a great father and a legend in the mortgage industry,” he added by phone.
Mosillo and partner David Loeb (who died in 2003) founded Countrywide in 1969 with $500,000. Over the decades, the company has grown from an initially conservative New York-based mortgage lender to become the largest mortgage lender in the United States. As of 2007, the company had 900 offices, $200 billion in assets, and $500 billion in loans that year.
In the early 1990s, after government data revealed that financial institutions were unfairly denying mortgages to minority borrowers, Countrywide saw an untapped market, targeting low-income and It began offering more loans to minority communities.
“When I first brought the loan into the office, they said, ‘You’re crazy, you’re crazy, don’t do that. There’s a reason we’re rejecting these people.'” Mosillo later told a parliamentary committee investigating the crisis. Loan officers “had very static and inflexible guidelines,” he said.
In his eyes, Countrywide was helping break down racial and economic barriers to homeownership.
So he put his staff through “sensitivity training” and hired more black and Hispanic employees. Mojiro said Countrywide immediately began approving one loan for every two reviews. Previously, it approved one loan for every four applications. The new loan was “actually disbursed,” he said.
However, that performance did not last long. According to an internal Countrywide email released by the SEC in 2009, Mr. Mosillo described some of the company’s high-risk loans as “poison” in 2006. “In all my years of business, I have never seen a product as harmful as this,” he said. he wrote in an email.
More than a decade later, Mosillo continues to defend himself and his company’s legacy at a financial conference in Las Vegas, even as he recalls how difficult that time was for his family.
“Of course it bothers me,” he said. 2019 CNBC Report. “It affected my reputation, it affected my family, it seriously affected my whole life. I’m 80 and now I don’t care, there are more important things in life.”
Ben Protes contributed to the report.