Man with a Tan Needs a Plan

This morning’s news blip is this little ditty on Countrywide CEO Mozilo:

"The Illinois attorney general’s office, which began an investigation into the business practices of Countrywide Financial Corp. last fall, says it has found enough evidence of wrongdoing that it plans to file a civil suit against the mortgage lender and its chief executive, Angelo Mozilo…

Illinois alleges that the company engaged in "unfair and deceptive practices" in the sale of mortgage loans. The 78-page document says the company loosened its underwriting standards, structured loans with "risky features" and engaged in "marketing and sales techniques" that incentivized employees and mortgage brokers to push loans whether or not homeowners had the ability to repay them.

The complaint says the company’s actions were driven by its desire to boost market share and to satisfy Wall Street’s appetite for mortgage securities. "Investor demand and secondary market valuation…became the primary concern when determining what kinds of loans to market and sell and at what price, rather than the consumers’ ability to repay the loans," said the complaint.

The suit demands that any Countrywide loans "originated using ‘unfair and deceptive’ practices
be rescinded or modified in some way, even if Countrywide has to
repurchase the loans. The Attorney General of Illinois is also asking that her office be given 90
days to review any loans that are currently in foreclosure or that are
moving toward foreclosure.

Note that this is a civil, not a criminal, suit.

Separately, Mozilo is facing an SEC probe into his $400 million in sales of Countrywide stock before the price imploded. He is also facing allegations that politically connected "Friends of Angelo" — Senators, Fannie Mae Execs, and others — got favorable "VIP" loan terms from Countrywide.

Man with a Tan needs a plan — and a couple of good lawyers . . .

Sources:
Illinois Plans to Sue Countrywide, CEO
RUTH SIMON
WSJ, June 25, 2008; Page A12
http://online.wsj.com/article/SB121436097291702365.html

Illinois to Sue Countrywide 
GRETCHEN MORGENSON   
NYT, June 25, 2008 
http://www.nytimes.com/2008/06/25/business/25mortgage.html

Illinois to sue Countrywide and CEO Mozilo
Robert MacMillan
Reuters, Wed Jun 25, 2008 5:27am BST
http://uk.reuters.com/article/governmentFilingsNews/idUKN2439398320080625

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What's been said:

Discussions found on the web:
  1. Mark E Hoffer commented on Jun 25

    Having Peep like Mozilo about, is probably one of the best arguments for legalizing Industrial Hemp. Given the state of our Trade Deficit, it’s whole lot less Rope to Import.

    That cat would have done enough damage on a used-car lot, let alone at the head of a Mortgage Lender…talk about ‘useful idiots’.

  2. KnotRP commented on Jun 25

    wrongdoing?

    The lawyers are going to waste a bunch of IL taxpayer
    money lining their pockets conducting a show trial which will only result in an delayed and meager settlement and no admission of…ahem…wrongdoing. I’ve seen this silly circus before….

    Wake me up when someone uses the word “illegal”.

  3. Boat 52 commented on Jun 25

    When he hires Robert Morvillo, the world will know that the man with a tan is worried. Until then, all the noise is a spray bottle of water in a hurricane to him.

  4. Vermont Trader commented on Jun 25

    Maybe he will go down, in ten years.

    AXP CEO this morning…

    “Mr. Chenault also said, “Business conditions continue to weaken in the U.S. and so far this month we have seen credit indicators deteriorate beyond our expectations. While it is too early to assess the impact of these indicators, the antitrust settlement we’ve reached with MasterCard provides us with a multi-year source of funds that should, among other things, help to lessen the impact of this weakening economic cycle and, when conditions improve, give us the ability to step up investments in the business.”

    I can help asses the impact for you.

  5. VennData commented on Jun 25

    Would you sign to refi your boat?
    Would you, could you, refi your moat?

    I do not like them, Tan-I-am
    I do not like your late night spam

  6. Joe commented on Jun 25

    Very clever VennData :)

  7. Mike in NOLA commented on Jun 25

    Some of the softball questions thrown at him by some Senators he owns were pretty disgusting. From his discussion of his dedication to helping homeowners, one would have thought the Senate was being visited by St. Francis of Assisi.

  8. John commented on Jun 25

    I’d say BoA need to be reassesing their options. At one time I thought this looked like a good deal but as the situ has worsened it don’t look so good anymore. If ever there was a poisoned chalice it’s countrywide. These lawsuits are going to go on for years and potentially the sums involved are in the hundreds of millions, housing is going to be in the tank for years so why are they pressing ahead. Any ideas.

  9. zackattack commented on Jun 25

    Does anyone have a link to a template mail for Congresscritters in opposition to the Dodd/Shelby FHA WTF-ever Stabilization Act of 2008?

  10. BG commented on Jun 25

    John, If B of A still goes thru with this acquisition, they have got to be out of their minds.

    If it does goes thru, there has to be more to this marriage than meets the eye; because, it no longer makes any financial sense on the surface, whatsoever.

    Maybe the Feds made them a sweet heart deal a few months back they just couldn’t pass up.

  11. VennData commented on Jun 25

    Would you sign to buy a box?
    Even when they change the locks?

    I do not like this Tan-I-am
    I do not like your refi scam

  12. Donkei commented on Jun 25

    Of course, this (CFC/BofA) is a back-room deal, endorsed and massaged by the feds. Look at where Countrywide now gets its money to lend (FHLB) and to whom it sells the loans it originates (Fannie and Freddie, almost exclusively).

    This deal represents another leg in the complete nationalization of the residential real estate mortgage industry.

    Unfortunately for the feds, Illinois is trying to destroy what it is trying to save. Maybe President Obama will reign them (Ill) in when he realizes what a f-ing mess this all is.

  13. TDL commented on Jun 25

    This seems to me that Ms. Madigan is using the Spitzer model to capture the governor’s mansion. What ever she gets from CFC she can spread around to key voting blocks. No one else would have the potential that she does to be the next governor of Illinois (her father is one of the most powerful politicians in the state, ergo her becoming A.G. @ the ripe old age of 35.)

    Regards,
    TDL

  14. VennData commented on Jun 25

    Land of Lincoln’s suit shall fall
    Since I’m the tannest of them all

    I’ve been evicted Tan-I-am
    Can you refi a mini van?

  15. Kurt commented on Jun 25

    “The Tan Man
    must do a span
    in the can!”

  16. rj commented on Jun 25

    “wrongdoing?

    The lawyers are going to waste a bunch of IL taxpayer
    money lining their pockets conducting a show trial which will only result in an delayed and meager settlement and no admission of…ahem…wrongdoing. I’ve seen this silly circus before….

    Wake me up when someone uses the word “illegal”.”

    I unfortunately have to agree with this guy. The Supreme Court this morning overturned a $2.5 billion verdict against Exxon from 1989. NINETEEN YEARS AGO! These guys will never pay.

    So we have to do justice a different guy. It’s quite simple. Just take a CIA agent and have him shoot Mozillo in the back one night. Make it look like a mafia hit. Make sure the Wall Street big shots knew why Mozillo got killed, that would do by far more to make sure they’re honest in the future than any Illinois attorney general ever could.

  17. TomD commented on Jun 25

    rj, displaying faith in government, thinks there are CIA agents who can shoot straight.

  18. Bud commented on Jun 25

    Is there a record of a tanning bed ever frying its occupant?

  19. rj commented on Jun 25

    “rj, displaying faith in government, thinks there are CIA agents who can shoot straight.”

    You can go hire a member of the Gambino family then. :)

  20. winslow commented on Jun 25

    Didn’t learn anything after Enron, Worldcom, etc, etc.
    Our current government is in bed with all of these hooligans.
    The only way to get corporations to change is to have very severe penalties. That means confiscation of all of the CEO’s (and upper management echelon, including the board of directors) assets. In addition, a mandatory prison sentence. Our present government would never let this happen. Crooks are running the country.

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