Mozilo Speaks, Part Two: Buyers "Put a Lot of Presssure On Us"

Countrywide CEO Angelo Mozilo is officially LA Land's Favorite Real Estate personality. Why? Because while the official party line of the industry is that "it's now a normal market," and "home prices are holding up," Angelo sees and says something very different: there are no buyers, and price depreciation is causing problems.

More of Angelo's greatest hits, as reported here by Reuters:

"The cause of the problem that we have today is decreasing values. That's the cause of the problem, because we didn't have delinquencies and foreclosures when values were going up," he said at a Mortgage Bankers Association conference in Manhattan.

"First-time home buyers were begging us to make them loans because they thought home values were going up significantly, and so they put a lot of pressure on us to make them loans," he said.

The second quote pretty much summarizes the modern lending business. A major lender is talking about pressure from borrowers. Huh? Isn't that kind of backwards? Of course borrowers want money, but how exactly do they exert pressure? By storming into a mortgage broker's office and demanding 100% financing and a low teaser rate?

Help me out with this one. Comments?

Comments

[Cal]

Mozilo has tried to put the blame on everyone else but his company. Brokers.. Regulators... Competitors... Borrowers. He has absolutely refused to accept any responsibility. He literally has claimed that he had to loosen underwriting because all his competitors were doing it first. Not because of safety or soundness of loans but to keep up market share when things were going crazy. Yet he says his company is the good guys... he is a unique kind of scum.

As for the decreasing values quote... what kind of business model is it that cant survive a downturn? Ponzi scheme pure and simple.

[Michael Bolger]

Is he roaming the streets freely or assited by a licensed clinician?

Michael

[buz algood]

Nice oompa loompa tan, dude.

[$225K Couple]

"The cause of the problem that we have today is decreasing values. "

Gee, thanks, Mozilo. I never would have deduced that this bubble bursting would bring the Ponzi scheme to it's knees. I guess he's really earning his $50M keep with this high-level analysis.

Incidentally, I think for $50M he should be able to afford a better shade of Mystic Tan. Seriously, he frightens me.

[Natalie Kravetz]

While not all the blame for the loan we ended up in can fall to Mr. Mozilo, he should understand that in his company's name, brokers lied, misled and misrepresented people's eligibility. Information we NEVER submitted ended up on our application, which Countrywide happily accepted without checking out. Now we are faced with incresing payments, negative amortization and a hefty "pre-payment" penalty (which was never revealed to us until we tried to refinance). While Mr. Mozilo and his cronies are basking at the beach, I hope they understand the destruction that was wrought. As a non-profit small business owner, I am sick to death of hearing the media celebrate my "pioneering spirit" while neglecting to mention the price I pay in huge interest rates and poor choices for financing. Not to mention the avarice of companies that target people like me, knowing how limited my choices are.

[Numbers Guy]

Natalie,
Apparently you did not read your loan documents when you signed them at closing. All of the details you mentioned like your rate, payment, negative amortization and prepayment penalty are listed out clearly in the TIL (Truth in Lending) form. If you couldn't afford it, you shouldn't have signed it.

Also, the reason your broker exaggerated your income is probably because you don't make enough money to afford a conventional 30-year fixed mortgage. I am not saying that he was in any way doing the right thing. I am just saying that he probably got you into the loan/house the only way he could, by exaggerating your income (Fraud).

Take some responsibility and READ the documents that are placed in front of you before signing up for soooo much debt. Also, it wouldn't hurt to comparison shop with other brokers, retail banks, and online. They can't all be bad like the broker you found.

[Chris]

He knew exactly what was going to happen as did all of the CEO'st their respective banks. I'm not nearly as sophisticated asthese bankers about money, but, Greenspan for YEARS was bringing up" the bubble effect" and how the market will crash. Mozilo is as bad as Berneard Ebbers in my opinion.