I sometimes wonder what Angelo Mozillo thinks about the mess he made. Of all the shotgun weddings to come out of the 2008 financial crisis, the B of A - Countrywide union has to be the worst. Last week the bank agreed to a $500 million settlement with the Iowa Public Retirement System and various other members of the class action lawsuit. The suit was over toxic RMBS sold by Countrywide.
“After five years of hard-fought litigation, this record- breaking recovery is a tremendous result for MBS investors misled by Countrywide,” Spencer Burkholz, a partner at Robbins Geller Rudman & Dowd LLP who represents the Maine State Retirement System, said in an e-mail.
As if that weren't bad enough, it doesn't even settle everything. There are several other pending suits, and it seems like just as B of A gets one suit settled another one hits the docket. It has to be pretty frustrating.
I guess when you think about it, it's only been five years since everything blew up and these types of suits naturally take time. I just wonder how long it will drag out before we don't hear any other tales of woe from companies that ceased existing in 2008. I mean, nobody bitches about Lehman anymore.
What do you guys think? Did B of A strike a good deal in the acquisition of Countrywide, or did they get sold a bill of goods? At least with the inflated value they paid for Merrill they got an asset. Countrywide just seems like nothing but a liability.
Angelo Mozilo might have to take a front seat in the greatest trades of all time with this one.
Before this settlement, countrywide was estimated to have cost B of A $40 billion:
http://dealbook.nytimes.com/2012/10/25/tallying-the-costs-of-bank-of-am…
Eddie,
So what you're saying is that Countrywide is like Herpes. Once your infected with it, it never goes away! As to your questions - it was an awful acquisition; they were sold a horrible bag of crap and there is very little that BoA got out of the deal to make it worthwhile. At the time, it may have seen great, but the baggage was too great. I'm not going to be surprised if BoA ends up paying close to 10Bln (which should be far more BTW) once all the settlements associated with Countrywide are done. Oh, it's great when your acquisition will cost you 5 times the purchase price just to settle debts from it!
I have more of a problem with his ridiculous clothes and spray tan.
Yeah, Tangelo's a real piece of work.
Surprised his white collar isn't orange at this point.
Then again if I was worth $100+MM and everyone hated me... I probably wouldn't give a shit what other people thought of my style either...
Aside from Mozillo, I'm not sure anyone benefitted from Countrywide. If the feds are looking for a villian or public enemy in the housing crisis, they really could pick on him instead of pretty much everyone else. Fuld, Paulson, even Magnetar could be rationalized to different levels of ignorance, circumstance, or just plain old unethical ruthless exploitation of the law.
But I'm thinking that Mozillo would be easy to jail and probably very satisfying from a PR perspective for law enforcement and public calm. The five year statuate of limitations is upon us and I'm not quite sure why they're chasing traders and bankers who were mostly just swept up in the same housing bubble everyone else was. This guy is exactly the villian CEO that the public wants to hate, and rightfully so.
If they can get half a billion dollars (more actually) out of Steven Cohen, I truly fail to see how this guy's face is not being paraded around like a trophy. Heads on a pole. This one's easy...why has nothing been done?
He settled with the SEC for $67.5M. I don't want to start the debate we started in Eddie's Liz Warren thread, but this one probably could have used a criminal trial.
I believe the reason he's not being strung up is because technically he was the government's poster boy of promoting "the american dream" for so long... can't very well go crushing a man that listened when you were telling everyone to do the same for 2000-06. Then again, that's what they did with the big banks....
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