'Perversity' in Calabasas: More $$$ for Countrywide bigs

News item from the L.A. Times: "The top two executives of beleaguered Countrywide Financial Corp. will pocket $19 million in stock next week, according to a regulatory filing. It's the start of a series of multimillion-dollar payments expected to go to the pair before and after the company's pending takeover by Bank of America Corp."

More: "The largesse for Countrywide Chief Executive Angelo Mozilo and President David Sambol drew immediate fire from Sen. Charles E. Schumer (D-N.Y.), a member of the Senate Finance Committee, whose members have been debating the merits of a government bailout of consumers and mortgage lenders caught in the sub-prime meltdown.

"It's perverse [emphasis added] for Bank of America to reward the principal architects of the bad business practices that caused this housing crisis," Schumer said in a statement. "Bank of America will hopefully correct the bad practices Countrywide put in place. But enriching people who specialized in deceiving borrowers for the sake of their bottom line will not help that cause."

Also: "Bank of America Corp. will pay $28 million to Countrywide Financial Corp. to chief operating officer David Sambol to retain him as head of the merging companies' consumer mortgage operations."

The headline is a cheap shot, I'll admit -- anytime you're quoting Chuck Schumer in a headline, it's a low blow. But in all seriousness: Do you mean to tell me David Sambol is uniquely qualified to lead Countrywide after Bank of America buys it? I mean, I'm sure he's good at his job. So was Karl Dorrell, but UCLA found another football coach. So was Grady Little, but the Dodgers found another manager.

This is the Countrywide management team that says no one predicted the mortgage crisis; these are the guys who said last summer that Countrywide would benefit from the mortgage meltdown. Then they went out and lost $1.2 billion in the third quarter, lost $442 million in the fourth and sold the company for a fraction of its previous value. And this is the very best management team Bank of America can find?

Your thoughts? Comments? E-mail story tips to peter.viles@latimes.com

Comments

[gary]

its simple, because they can, they do. and who is to blame them. they run a company in the toilet then get to make $20 million. who wouldn't be willing to do that.
JOB POSTING:
to all corporations and stockholders. I am willing to run your company into the ground and agree to do it for a flat $2,000,000.00. Please advise soon if interested, my ARM is ready to adjust and I can use the money. Only serious inquiries please.

[SantaMonicaSurvivor]

Roland Arnall , founder of Ameriquest died just recently so maybe this is the best they can find.

[sunsetbeachguy]

Get out the torches & pitchforks, the populist backlash is coming.

Better hunker down.

[NoBailout]

The Bush Bailout is now in play: http://tinyurl.com/33k62t. I think I'm going to get sick.

[Michael Snyder]

And we're wondering why there's a crisis of confidence in the financial markets? With "decision making" like this it's a wonder any financial stock is selling above two cents. Clearly the only purpose in these firms vesting themselves in the stock market is to insure the value of bad manager's golden parachutes. Perhaps that's what we should give them; a backpack full of gold and a one way ride to twelve thousand feet. That'll give them time to think about the value of gold before impact.

Come on already! Is there no one in either the government or the fourth estate who can recognize this for the rape of the remaining CW stockholders it is? Again, I really don't give a rip about the seven digit plus crowd when I'm talking about stockholders. I'm talking about the school teachers from Tennessee and the rank & file office staff who've worked for the last decades to build for their retirement and now they're looking for work at Wally World and cat food as a protein source.
It seems the greed of these new age robber barons is only exceeded by the arrogance with which they display it. I wonder how many of them have invested in property in Dubai where they can hide from American justice?

[la voce bella]

I worked in the television business for 36 years and after 20 years without a promotion despite exemplary performance it took me four more years to reach a senior executive position which was only achieved by threatening, coaxing, cajoling and all but camping out on the CEO's doorstep. It was always a marvel to me how rank mediocrity always rose to the top. The larger and more expensive the mistake, the higher the promotion. This is the first law of corporations. God forbid, someone does the right thing, speaks a contrarian thought, or keeps costs down. Because if you do these things, others become threatened and need to keep you in the background. Psychology and fear always win over performance.

[Valley Observer]

A better headline might be perversity in Charlotte, or New York, or wherever BofA makes its decisions. But that said, one can understand BofA wouldn't want to disrupt Countrywide too much right away, considering the likely compatibility issues. Probably a good idea to have in charge someone how knows how the place works, as Countrywide's systems will persist -- at least initially, assuming BofA keeps the Countrywide correspondent and wholesale divisions for which BofA has no equivalent.

[robert laughing]

Clearly one of many, MANY reasons we no longer use BofA, nor go to Countrywide...too incestuous in rewarding those who prey upon consumers and provide OBSCENE bonuses to the undeserving. WHO do YOU bank with, fool?

[current cw employee]

If they would take that money and invest it in cleaning out some of the money to cleaning out the dead weight of middle management at Countrywide and clean out
the ineffective operations staff that is there now - they would be able to turn the company around and be successful - Right now the company is dying. Customer service is terrible, prices are too high - bait and switch is everywhere. I think they do not deserve
a penny. How on earth can shareholders stand by and watch this happen

[Winfield J. Abbe]

As an illustration of the cesspool many of our U.S. corporations have become, consider the genius level
scientist, statistician, mathematical physicist, and industrial engineer W. Edwards Deming. Professor Dr. Deming was born in Iowa in 1900. He graduated from the University of Wyoming in electrical engineering, B.S.E.E. He received an M. S. degree from the University of Colorado and Ph.D. degree from Yale University both in mathematical physics. He was a very humble man who sought the truth and sought to provide the truth to others. He was not interested in personal wealth. He worked well over 12 hours a day most of his life. He died in 1993. But before his death he sought to provide help to failing U.S. corporations like GM and Ford before the current downfall, among many other corporations. Their arrogant "leaders" gave him the silent treatment and negligently ignored his valuable advice to improve their products and reduce their costs of production using the scientific methods of statistical quality control and human quality control he had pioneered along with others.
But some of the Japanese leaders of industry paid attention to this remarkable genius and implemented his recommendations long before Japanese automobiles were the success they are today. American CEO's stiffed him, slighted him, while Japanese CEO's worshiped him. Today, 2008, GM and Ford and even Chrysler are on the ropes about to be dismembered as Packard was a half century ago. Honda and Toyota are world giants in the automobile business. Ford stock sells for about $5.00 per share. The main difference between the automobile companies and the corrupt mortage banking companies is that the latter have been corruptly bailed out by the corrupt federal reserve in order to illeglly maniuplate the New York stock market casino, while fixed interest investors receive the shaft. But in most cases, these greedy and corrupt and incompetent CEO's walked away with millions of underserved dollars following the rape of these corporations. In some respects, America deserves to take a fall when such expletive deleted incompetence and corruption is rewarded so improperly and unfairly against the old American Way. America today is virtually a 3rd world country in terms of production. Almost nothing of substance is produced her anymore. By the way, Professor Dr. Deming was awarded no less than about 16 honorary doctor's degrees in law, science and engineering before his death and 2 more posthumously.
He has been awarded the highest civilian honor for a non citizen by the country of Japan. Obviously our corporate CEO's have degenerated along with the public schools; all they are good at is fooling people, the public and the investors and the government; common, garden variety FRAUD.

[debrap]

I am sure that there are honest, legitimate, wall street financial types. Well, err, uhh, I think there are. Well, err, uhh, I read about one when I was in grade school in 1959.

[John]

Steal a little and they throw you in jail..steal a lot and they make you king..."Bob Dylan"

[dionysis]

BofA is a terrible bank- has been for years. I would never use them. Nothing they do surprises me.

[JJC]

Too bad David Sambol can't be put in charge of al-Qaida . In that position he could do the US some good.

[Steve]

This is no surprise, the game now for a CEO is run a company in to the grouhnd and then have board and chump stock holders pay you millions to leave. Look at HD, HP etc.. The CEO that runs a well managed company gets nothing in comparison to these idiots, this is why I willl never buy a US stock and Asia will dominate the global economy. Thanks GW because you are the head idiot.

[gary]

why our country is going down the drain and why it will if another republican is elected. read, if you dare, PROVERBS chapter 29 verse 1-9. it speaks volumes about bush and cheney and mccain. and for those who make excuses for them, then shame on you.

[P]

Winfield J Abbe,
Thanks for that post. Very interesting!

[Bush]

I will keep you safe!!!

I will be able to answer that call at 3AM!!!!

Good for B of A. Many years of tax credit!!!

[Smith]

I do not feel safe, when all the jobs are overseas.

I really do care about that person answering a call at 3am, I am more concern about my family at 3am.

[Dean Plassaras]

Fallen captains of industry often do offer a spectacle of disgrace.

[tew]

Schumer is a bigger ass than Mozilo. May they both rot.

[ekim]

Gary wrote: "why our country is going down the drain and why it will if another republican is elected. read, if you dare, PROVERBS chapter 29 verse 1-9. it speaks volumes about bush and cheney and mccain. and for those who make excuses for them, then shame on you."

Gary, I can see the anger you have with the mess we see in our financial and mortgage markets. In many ways I share the same feelings you and many have expressed here on this blog. This latest news of corporate abuse just adds fuel to the fire.

However, please be advised when using scripture to make your point. I read the passage you posted. One must inject an insightful amount of discernment and judgment in order to make a parallel between what’s happening today and what the above scripture had to say. Also, to link the mess we are in to Republicans only is intellectually dishonest; there is enough blame on both sides of the political spectrum.

IMO, the main problem we see in our markets is simply greed, greed from all sides. Greed from the markets to make more money, often at the expense of others. Greed of the lenders, greed of the borrowers wanting more house than they need or can afford, greed of the politicians wanting our votes. Those people who strive to act ethically and responsibly often times are left at an extreme disadvantage.

So, what shall we do? Shall the rest of us give up our principals, ethics, and our character to benefit in this way of greed? Your choice.

After the 1994 Northridge earthquake my wife and I struggled. I lost my job. Two years of financial struggle later resulted in a foreclosure and a bankruptcy. In order to move forward we had to look forward. In 1998 we were able to buy another house. In 2000, I was laid off again due to a recession. We had to sell that house in, gulp, 2002. As I watched the value of that house skyrocket over the next few years, anger and resentment started to eat away at my soul. Again, My wife and I had to count the blessings we did have, and to look and move forward.

My encouragement here is to not get bound up by this situation. Keep an eye on how this all affects yourselves and how to use this situation for your advantage. Keep on looking and moving forward. If you can help someone on your journey, please do so and you will be blessed.

[Joseph... the Real Estate Guy]

They get away with it because most Americans are lazy and greedy!

[National_Insecurity]

David Sambol, COO at Countrywide, is having his SILENCE BOUGHT.

C'mon, you don't need an MBA to realize the business model of Countrywide was built on fraud. When numerous offices of Countrywide in California are closing 20-50 loans a month with 1% teaser rates on $500,000 loans to gardeners and maids claiming (on the liar loan application filled out by the loan broker) to make $120,000 a year?

The incentive is that the loan broker makes a 1+% commission on each loan. The COO structured the compensation packages for the entire food chain to avoid oversight.

I can show you entire ZIPCODES with hundreds, if not thousands, where Countrywide and/or copycat lenders pushing the same loan scams made millions in loan fees...but are today ghost towns of foreclosed properties.

I went through a REO house yesterday that was refinanced by a guy from $175K to $600K nearly every year. Today, a buyer might - just might- offer $350K.

Walk through that house, and similar houses, and you'll find Porsche 911 manuals, new motorcycle manuals, flat panel tvs, season tickets to pro sports, etc.

The Countrywide loan brokers were carrying more bling than the crack dealers, driving flashier Range Rovers, and living the gansta life without fear of going to jail.

Yeah, I think David Sambol has got them by the short hairs.

[Enlightenment]

More proof that Bank Of America is run by idiots.

BoA should immediately fire everyone at the top of Countrywide, and then bring in a middle manager to run it.

It would be more useful to hire an office full of people that have an equivalent total salary!

[Enlightenment]

http://www.nationalbubble.com/stopthebailout/

[dave]

Why do banks continue to be rewarded for their bad behavior practices? How about some accountability? Was it really that difficult for a bank to simply verify the income statements of those they loaned hundreds of thousands of dollars to? Deadbeat borrowers and wreckless banks are the reason we have a housing mess.

It's time we get back to - who ever makes the loan, holds the risk. Then, banks might actually scrutinize an applicant and think twice before giving a deadbeat money. If a bank chooses not to do that, it should be their own fault if they fail.

[Uncle Billy]

Ah wouldn't you just love to be a fly on the wall at meetings between Sambol and BofA.

I was wondering what Kathleen Brown was up to -- she was on the CW board and jumped ship with Henry Cisneros just before the storm hit. Scan of the news shows she was just elected secretary of "California Climate Action Registry." The Press Release on the home page of their site talks about her brother Jerry's appeal to lawmakers to regulate the carbon offset industry. Could be coincidence, but maybe this family tends to work together? I've heard that the "greening of america" is going to be the next bubble. I'm not up on enivornmental issues, but it sure looks like big money is beginning to change hands with all the "greening," and carbon offsets.

[Sara]

I can't believe what I am reading. What happened to the bank (B of A and Countrywide) being financially responsible? I am angered, disgusted and full of ire that such decisions are being made.
Is it too late for me to get a job where I can run a business into the ground, appeal to a competitor for a financial lifeline and still get my golden parachute? Where do I apply for such a position?

[lefty]

guys you know sometimes our 'leaders' can be a little dopey; one time conrad hilton was a senator and he wanted to prohibit crime scenes in movies! lol well anyway, your home is waiting for you: right here in incomparable metro L.A.!! do not settle for anything less! except maybe san diego :) have fun shopping!

[tealeaf]

Oh I love lefty. It's the sheer "aw shucks - they ain't making any more land in metro LA" that will keep the Eternal Sunshine of his Spotless Mind forever glowing.

[Andrew]

To first poster 'gary' (March 29th): Your asking fee to run any corporation into the ground for a flat $2,000,000.00 is patently absurd. I could do it for half that...!!!

[consumeradvocate101]

Fool me once shame on you. Fool me twice shame on me. When will we learn.

[P J Evans]

Gee, and the government's proposed new rules for the Treasury would result in ... more bailouts and more protection of businesses. The rest of us will, as usual, get to foot the bills and absorb the losses. (In fact, it's another scam, intended to help those who have lots, have lots more.)
And it won't do diddly for people with mortgages about to foreclose or their 401Ks and IRAs about to disappear.

[greg]

Does anyone else think this engineered ponzi scheme is much worse than Enron! Wheres the subpoenas!!! come on people wake up.

[Adealia Artist]

They should be in prison and their families stripped of all assets. Instead these people who hurt America are being rewarded. Would you like to know why?

Wealth is no longer dependent on any given country. The Wealthy could care less about the United States as long as the money flows in and they can afford a place in Dubai.

Who are the international wealthy? They are investors, rock stars, movie starts, producers, artists with one thing in common, their wealth and no loyalty to anyone but their kind.

[GodSend]

Is the Fed playing a game of Monopoly with the Banks?