Banker charged in meltdown to appeal

by MPA05 Oct 2015
Rebecca Mairone was chief operating officer for a division of Countrywide Financial Corp., the California giant that came to symbolize the excesses of the subprime era. And while top executives walked away, Mairone was targeted and prosecuted in federal court, eventually found liable in 2013 and slapped with a $1 million fine for misrepresenting the quality of mortgages her company sold to Fannie Mae and Freddie Mac.

Two years later, Mairone is heading back to court in an attempt to overturn that ruling and restore her reputation. As she has all along, she maintains she did nothing wrong. Years after the housing bust, her case reminds Americans yet again that not a single senior executive has been held accountable for a mortgage meltdown that cost millions of people their homes, livelihoods and savings.

“She’s not uniquely responsible,” said Brad Miller, a Democratic congressman from North Carolina from 2003 to 2013 who served on the House Financial Services Committee. “But the question isn’t whether there should’ve been a claim brought against Rebecca Mairone. It’s why weren’t a lot more brought?”

While jurors pinned liability on Mairone and her employer, Countrywide acquirer Bank of America Corp., they, too, questioned why she was the only individual named in U.S. Attorney Preet Bharara’s complaint. Angelo Mozilo, Countrywide’s chief executive officer, settled out of court despite billions in mortgage-related losses. And Mairone’s supervisor, subprime- mortgage unit CEO Greg Lumsden, wasn’t sued.

“Rebecca was part of a group of mid-level and senior managers that made every decision together,” Lumsden said in an interview. “There’d be no value created for anyone there to do anything that wasn’t ethical or right.”

The government had “every incentive” to pursue cases related to the financial crisis it believed it could win, David Siegel, an attorney for Mozilo and a partner with Irell & Manella in Los Angeles, said in an e-mail. “One reason additional cases were not brought undoubtedly was that the government apparently determined there was not sufficient evidence of wrongdoing.”

From September 2008 through January 2015, 5.5 million U.S. homes were lost to foreclosure, according to data provider CoreLogic Inc.

Mairone lives outside Philadelphia now, a continent away from Countrywide’s old headquarters, and uses her maiden name, Steele. She does consulting work and devotes herself to charity when she’s not meeting with clients, according to people with direct knowledge of her circumstances.

In her spare time she reads her appeal, and re-reads it, again and again.

“Rebecca never intended to defraud anyone and she didn’t defraud anyone,” said Marc Mukasey, one of Mairone’s lawyers, who said the government misapplied the law. “The Court of Appeals will see that.” Bank of America, which acquired Countrywide in 2008, is also appealing.

Bloomberg News contributed to this story


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