Man with a Tan Needs a Plan

Wednesday, June 25, 2008 | 06:23 AM

This morning's news blip is this little ditty on Countrywide CEO Mozilo:

"The Illinois attorney general's office, which began an investigation into the business practices of Countrywide Financial Corp. last fall, says it has found enough evidence of wrongdoing that it plans to file a civil suit against the mortgage lender and its chief executive, Angelo Mozilo...

Illinois alleges that the company engaged in "unfair and deceptive practices" in the sale of mortgage loans. The 78-page document says the company loosened its underwriting standards, structured loans with "risky features" and engaged in "marketing and sales techniques" that incentivized employees and mortgage brokers to push loans whether or not homeowners had the ability to repay them.

The complaint says the company's actions were driven by its desire to boost market share and to satisfy Wall Street's appetite for mortgage securities. "Investor demand and secondary market valuation...became the primary concern when determining what kinds of loans to market and sell and at what price, rather than the consumers' ability to repay the loans," said the complaint.

The suit demands that any Countrywide loans "originated using 'unfair and deceptive' practices be rescinded or modified in some way, even if Countrywide has to repurchase the loans. The Attorney General of Illinois is also asking that her office be given 90 days to review any loans that are currently in foreclosure or that are moving toward foreclosure.

Note that this is a civil, not a criminal, suit.

Separately, Mozilo is facing an SEC probe into his $400 million in sales of Countrywide stock before the price imploded. He is also facing allegations that politically connected "Friends of Angelo" -- Senators, Fannie Mae Execs, and others -- got favorable "VIP" loan terms from Countrywide.

Man with a Tan needs a plan -- and a couple of good lawyers . . .


Sources:
Illinois Plans to Sue Countrywide, CEO
RUTH SIMON
WSJ, June 25, 2008; Page A12
http://online.wsj.com/article/SB121436097291702365.html

Illinois to Sue Countrywide 
GRETCHEN MORGENSON   
NYT, June 25, 2008 
http://www.nytimes.com/2008/06/25/business/25mortgage.html

Illinois to sue Countrywide and CEO Mozilo
Robert MacMillan
Reuters, Wed Jun 25, 2008 5:27am BST
http://uk.reuters.com/article/governmentFilingsNews/idUKN2439398320080625

Wednesday, June 25, 2008 | 06:23 AM | Permalink | Comments (20) | TrackBack (0)
de.li.cious add to de.li.cious | digg digg this! | technorati add to technorati | email email this post

bn-image

TrackBack

TrackBack URL for this entry:
https://www.typepad.com/services/trackback/6a00d8341c52a953ef00e5536fbedf8833

Listed below are links to weblogs that reference Man with a Tan Needs a Plan:

Comments

Having Peep like Mozilo about, is probably one of the best arguments for legalizing Industrial Hemp. Given the state of our Trade Deficit, it's whole lot less Rope to Import.

That cat would have done enough damage on a used-car lot, let alone at the head of a Mortgage Lender...talk about 'useful idiots'.

Posted by: Mark E Hoffer | Jun 25, 2008 6:58:11 AM

The comments to this entry are closed.



Recent Posts

December 2008
Sun Mon Tue Wed Thu Fri Sat
  1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31      

Archives

Complete Archives List

Blogroll

Blogroll

Category Cloud

On the Nightstand

On the Nightstand

 Subscribe in a reader

Get The Big Picture!
Enter your email address:


Read our privacy policy

Essays & Effluvia

The Apprenticed Investor

Apprenticed Investor

About Me

About Me
email me

Favorite Posts

Tools and Feeds

AddThis Social Bookmark Button

Add to Google Reader or Homepage

Subscribe to The Big Picture

Powered by FeedBurner

Add to Technorati Favorites

FeedBurner


My Wishlist

Worth Perusing

Worth Perusing

mp3s Spinning

MP3s Spinning

My Photo

Disclaimer

Disclaimer

Odds & Ends

Site by Moxie Design Studios™

FeedBurner