'Dumbest moments' of 2008
Taking a look back at 2008, Fortune offers a list of this year's 21 dumbest moments in business. More than a few relate to housing and mortgages. Among them, Angelo Mozilo's famous e-mail:
If you thought the former Countrywide CEO couldn't sink any lower, think again. Already under attack as the overpaid, over-tanned and over-zealous pioneer of subprime mortgages, Angelo Mozilo doesn't do himself any favors in May after reading a customer's e-mailed plea for help with his home loan.
Intending to forward the missive to a colleague, Mozilo instead hits "reply all" and sends a response calling the beleaguered homeowner's request "unbelievable" and "disgusting." "Most of letters now have the same wording," grouses Mozilo. "Obviously they are being counseled by some other person or by the internet."
Mozilo's heartfelt reply makes its way onto the Internet -- and the onetime real estate king finds himself out of a job after Bank of America acquires Countrywide in July.
Fannie Mae's "delusions of grandeur" and Chief Executive Daniel Mudd's forecasting:
Fannie Mae CEO Dan Mudd proves once again that his crystal ball is malfunctioning. In May, Mudd predicts that the government-sponsored mortgage lender will "feast" on weakened competition in the mortgage market -- even as its own prospects dim amid mounting credit losses and asset writedowns.
By September, on the brink of collapse, Fannie gets a new owner -- Uncle Sam -- and Mudd loses a job.
The housing rescue:
Remember Hope for Homeowners? We didn't think so. In July, Congress passes the only housing rescue to date: a plan to guarantee up to $300 billion worth of mortgages and prevent more than 300,000 foreclosures.
But to participate, banks must take steep losses -- and doing so is voluntary. The anti-climactic upshot: A piddling 321 applications have been filed since the program's Oct. 1 launch -- and not one loan workout has been completed, according to the U.S. Department of Housing and Urban Development.
Read the Fortune list or make up your own. There were certainly enough gaffes to go around.
-- Lauren Beale
Thoughts? Comments?
Photo: Angelo Mozilo. Credit: Jay Mallin / Bloomberg News
Happy New Year LALANDers! I know 2008 has been an awful year for some. As I sit here reading this blog (sick and not going out tonight), I must emphasize that for some, 2008 provided a ray of hope for prospective home buyers like myself. Every couple of days I encounter people asking me if I'm going to 'jump in.' I reply smugly that the information that I have obtained, 90% of which from this blog, indicates: 'Heck no! The party and carnage have just begun.' Thank you Peter H, Lauren, and especially Pete V for a very interesting blog. I look forward to reading it throughout 09.' Happy New Year to All!
Posted by: fezco | December 31, 2008 at 08:15 PM
Is it legal for Countrywide to also be in the Insurance business? They keep letting my State Farm Homeowners Insurance lapse, and then placing "forced placed homeowners" by Balboa which is an "in-house" insurance. I go through this every year when my insurance is due. They refuse to pay the bill, and there's a big fight all over again.
Posted by: Miriam Gaddis | December 31, 2008 at 08:49 PM
#22 -- The U.S. Government's disastrous decision to let Lehman Brothers fail.
Posted by: Christopher Hain | January 01, 2009 at 07:53 PM
"I reply smugly..."
If I may say so, that is part of the problem with much of the discourse on this blog.
Posted by: Drew | January 02, 2009 at 11:46 AM
Why do I keep thinking that "capatalism is a legal (or illegal if you can get away w/ it) conspiracy to make money". To hell w/ morals, ethics, and whatever else! But publicly, show great concern. Like fake it and be a Boy Scout!. Do nice guys come in last? Roger Ramjet
Posted by: roger ramjet | January 03, 2009 at 12:30 PM