Countrywide co-founder off the hook as feds abandon case

by Ryan Smith20 Jun 2016
Prosecutors have dumped their case against the co-founder of Countrywide Financial after two years of trying to bring a civil suit against him.

The Justice Department sent a letter informing Angelo Mozilo, a pioneer of the subprime mortgages that fueled the financial collapse, that it isn’t moving ahead with the case against him, according to a Bloomberg report. The letter signals an end to nearly a decade of legal scrutiny.

Mozilo, 77, currently lives in a 12,692-square-foot house in Santa Barbara, Calif., according to Bloomberg. He’s always denied any wrongdoing and said that the national real-estate collapse, not Countrywide’s lending practices, was the root cause of the crisis.

“Contrywide or Mozilo didn’t cause any of that,” he said.

Countrywide originated more than $408 billion in loans in 2007, according to Bloomberg. The Justice Department claimed that many of those loans went to poorly vetted borrowers. After the crash in 2008, the Justice Department started investigating industry practices. Federal prosecutors began scrutinizing Countrywide’s actions, including Mozilo’s stock sales in the months leading up to the collapse of the mortgage market, Bloomberg reported.

Mozilo earned at least $500 million in the decade leading up to the crisis, according to Bloomberg. In 2010, he paid a $67.5 million penalty to the Securities and Exchange Commission without admitting or denying wrongdoing.

Bank of America, which purchased Countrywide, paid a portion of Mozilo’s penalties.


  • by Ken | 6/20/2016 12:56:51 PM

    So let me get this straight. The people at the Justice Department, who would like nothing more than to have another scalp to show how badass they are when it comes to sticking it to the man, can't muster a case against Mozilo. This means he's "off the hook"? Really? Has the author of this ridiculous article considered the possibility that maybe he didn't do anything wrong? Or does that not fit his preconceived ideas of how all this went down?

  • by objectiv1 | 6/20/2016 1:21:17 PM

    Met the man years ago in L.A. Was always amazed at this person's immunity from prosecution.

  • by MC | 6/20/2016 1:53:19 PM

    Agree with you Ken, maybe he didn't do anything wrong.


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