Say it Ain't So, Angelo Mozilo

Written By Brian Hicks

Posted April 26, 2007

Angelo R. Mozilo is one busy guy. When he’s not schmoozing Maria Bartiroma or palling around with Jim Cramer on CNBC, he’s running Countrywide Financial, one of the biggest mortgage lenders in the country.

But on top of all of that, Angelo has taken on something of a part-time job. He’s been working the phones overtime with his broker, dumping shares of the company that he continues to promote.

He made his latest share dump only a few days before today’s earnings announcement. Countrywide missed, by the way, reporting that its profits fell by 37% in the first quarter.

But such brazen behavior could do little to stop Mozilo–he’s a man on mission. On Monday, according to the SEC filings, Mozilo exercised options for 70,000 shares priced at $9.60 apiece. He then sold all of them the same day for $37.33, bringing home nearly $1.95 million in the process.

That haul, though, was just his latest in a long list of moves. In 52 sales since November, Mozilo has dumped 2,981,000 million shares of the company that he created.

The full list can be found here. I would add up his take on these sales, but to tell you the truth, my calculator probably couldn’t handle it. Let’s just say the guy deserves the gold medal for insider selling this year.

Of course, to hear Countrywide tell the story, there’s nothing to see here. The company maintains that the sales were preplanned and not out of the ordinary. I just wish they could say that with a straight face.

Either way, Anthony Mozilo is long, long, way from his roots.

Because before he reached the top of the mortgage mountain, Mozilo’s story was pure American Dream.

Born in 1938, Mozilo grew up in New York City, the son of first generation Italian-Americans. Angelo slept on the sofa so that his sister could have the bedroom.

To help his parents get by, he worked as a butcher with his father. He swept floors, made sausage and cut up meat beginning at the age of twelve.

It was only later that he closed his first loan and found his calling. He would never look back.

His humble beginnings behind him, he and a partner founded Countrywide Credit Industries in 1969. It mission was simple: lower the cost of and barriers to home ownership and educate people about the rights and responsibilities that come with it. Along the way, the company grew from a two-person shop to a major player with over 35,000 employees.

It certainly beat making sausage, and it earned him untold millions. And now, with over 50 years in the business, he has forgotten more about mortgages than most people could ever begin to know.

That’s what makes the frantic pace of his sales so telling. Countrywide is in for some tough times, and he knows it. Just ask him. After all, he’s seen everything, the good times and the bad.

Nonetheless, he continues to pump his company up in one venue after another, telling people that it will emerge stronger in the long run. Of course, if he really did believe that, he’d be buying shares and not selling them.

To make matters even worse, Mozilo has also managed to practically forget where he came from. Those "exotic," "risky" and "non-traditional" mortgage products that his company has sold to so many borrowers over the years are coming back to haunt them.

Many of them are to people who are struggling to get by, just like he once did. They face foreclosure only because companies like his tossed away years of underwriting wisdom in the rush to pad their bottom lines.

But even with all of that experience, he did nothing to stand in its way. He had to know that those programs were bad, but he did nothing to stop them.

In the process, his company hurt many of the families that he originally sought to help.

Like every other lender, Mozilo turned a blind eye to risk and continued to close loans.

You know mantra: Whatever it takes. That’s how you ring the register.

In fact, even now Mozilo cries bloody murder…

… as the various branches of the government ponder how to fix the problems that he and his mortgage buddies created.

The fault he says lies with the little people. In a recent Bloomberg story, Mozilo said, “People are adults and made choices in their lives because they wanted to own a home of their own.”

"The complaints about the loans," he continued, "only came when the opportunity for enrichment was gone.”

Of course, he did manage to get his and then some before it was all over. But then again, it’s been a long time since those days of cutting meat and sleeping on the sofa.

It’s all pretty sad really, because with all of that knowledge and visibility, Mozilo could be working to honestly change the industry for the better.

Instead he’s selling dumping his shares and resisting every effort to bring sanity back to the business.

Say it ain’t so, Angelo.

The banking debacle continues.

Wishing you happiness, health, and wealth,

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Steve Christ, Editor

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