Angelo Mozilo cannot believe it.
Six years after he lost control of the largest mortgage lender in the U.S., the Countrywide Financial founder is baffled by a new effort to punish him. The U.S. attorney’s office in Los Angeles is said to be preparing a civil lawsuit against Mozilo and as many as 10 other former Countrywide employees.
Mozilo remains proud of past triumphs and incensed by criticism.
“You’ll have to ask those people, ‘What do you have against Mozilo, what did he do?’ ” he said in a 30-minute call with Bloomberg News, one of his few interviews since the company’s downfall. “Countrywide didn’t change. I didn’t change. The world changed.”
Interviews with Mozilo, 75, and three friends show what retirement looks like for a chief executive officer linked to the worst financial crisis since the Great Depression. Remaining out of public view like Lehman Brothers Holdings’ Richard Fuld or Jimmy Cayne of Bear Stearns Cos., Mozilo has submitted plans for Old West-style offices in California, taught students in Italy about finance, invested in a building in the Arizona desert that houses a Taco Bell and written about his life so that his grandchildren will “know the truth.”
He remains a defender of Countrywide, even after Charlotte-based Bank of America, which bought it in 2008, agreed last month to pay more than $16 billion to end probes into mortgage-bond sales on top of about $55 billion in fines that came before. Mozilo doesn’t understand why he and his firm, blamed by lawmakers and authorities for lax underwriting and predatory lending, have been seen as villains.
“No, no, no, we didn’t do anything wrong,” he said, adding that a real estate collapse was the root of the crisis. “Countrywide or Mozilo didn’t cause any of that.”
Mozilo won’t be the CEO of a public company again under terms of a $67.5 million settlement in 2010 with the Securities and Exchange Commission. According to regulators, Countrywide didn’t tell investors it was creating increasingly risky mortgages, while Mozilo expressed doubts to colleagues. “We are flying blind on how these loans will perform in a stressed environment,” he wrote in an email about one product.
Still, with no major executives imprisoned for roles in the crisis, the U.S. Justice Department created a team to probe mortgage security fraud. The U.S. attorney’s office in Los Angeles is preparing to bring a civil case against Mozilo over the excesses of the subprime mortgage boom, two people familiar with the plans told Bloomberg News last month.
He focused on his career’s highlights in the interview, recounting one business magazine calling Countrywide “The 23,000% Stock.”
“Go back and you’ll see that Countrywide was one of the most admired companies in the country,” he said, adding that he has “no idea” why the government is going after him again. “It’s unfortunate, but I try to make the best of it.”
Mozilo, who earned more than $500 million from 1999 to 2008, according to compensation-research firm Equilar Inc., has been paying attention to markets.
“I don’t have a job, so I have to earn some money, and I do it through investments,” he said. Real estate is still the best option, he said. “Tides go in and out. This is just another tide.”
Public records provide evidence of his faith. One investment is a stake in a building that houses a Taco Bell outside Phoenix. Mozilo said he hasn’t eaten there because he stays away from chicken and beef.
Another is a project in Templeton, a small Southern California town where he’s requested permits to build a two- story retail and office building on a vacant lot. Architectural sketches show a style suited for a quaint Western main street.
“It’s a throwback to a century ago,” Mozilo said. “I love America. I love everything about America.”
He talks investments with his friend Ken Langone, a founder of Home Depot. “Equities, asset-backed deals, railroad cars, oil and gas,” said Langone, 78. “Private equity, structured finance, you name it.”