Tuesday, September 02, 2014 2:08:33 PM
Kevin McCoy, USA TODAY21 minutes ago
Susan Walsh - AP
File photo shows Angelo Mozilo, founder and former CEO of Countrywide Financial, being sworn in to testify at a 2008 congressional hearing.
Countrywide Financial founder Angelo Mozilo says he's puzzled amid reports that federal prosecutors may file a civil lawsuit against him for suspected financial failings during the years leading up to the nation's financial crisis.
The former head of what was the nation's largest mortgage lender told Bloomberg News in a Labor Day interview he has "no idea," why the government may pursue new charges against him.
"It's unfortunate, but I try to make the best of it," he said.
Mozilo also used the interview to defend Countrywide, which has been a target of investigations and charges over alleged evidence of lax underwriting practices and other mortgage market transgressions.
"No, no, no, we didn't do anything wrong," Mozilo said, contending that the real estate market collapse led to the financial crisis. "Countrywide or Mozilo didn't cause any of that."
The interview was among Mozilo's first public comments since Bank of America, which acquired Countrywide in 2008, reached a record $16.65 billion settlement to resolve allegations it sold toxic mortgage-backed securities and other financial products during the lead-up to the financial crisis.
Some of the wrongdoing covered by that Aug. 21 settlement occurred at Countrywide and Merrill Lynch, the brokerage similarly acquired by Bank of America amid the financial crisis fallout.
At the time of the settlement, Bloomberg, The New York Times and other news organizations reported that the U.S. Attorney's office in Los Angeles was working on a potential civil lawsuit against Mozilo. Federal prosecutors declined to comment on the reports.
The Securities and Exchange Commission filed civil fraud charges against Mozilo and two other former Countrywide had avoided subprime-lending mistakes, executives in 2009. The action accused them of falsely leading investors to believe they had avoided subprime-lending mistakes, even as Countrywide issued "riskier and riskier" loans.
Mozilo agreed to settle the SEC allegations in 2010 by paying a record $22.5 million penalty.
Separately, a July federal court ruling in New York ordered Bank of America to pay a nearly $1.3 billion fine for a Countrywide Financial program that sold risky mortgages through a program informally dubbed "The Hustle" or "The High Speed Swim Lane."
Launched in 2007, the program was purportedly aimed at handling higher volumes of prime mortgage loans, those usually made to borrowers who have high credit ratings and can afford larger down payments. But federal prosecutors argued the program was actually intended to have loans "move forward, never backward," and to remove "toll gates" that could slow the mortgage approval process.
The program caused major losses to federally-backed mortgage finance giants Fannie Mae and Freddie Mac, prosecutors charged.
Bank of America has said it will pursue an appeal of the fine, which was imposed under an order by U.S. District Judge Jed Rakoff in New York.
http://www.usatoday.com/story/money/business/2014/09/02/angelo-mozilo-puzzled-by-investigation/14964753/
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