Countrywide: California Piles On

by: Felix Salmon posted on: June 26, 2008 | about stocks: BAC / CFC    
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Well, that didn't take long. California attorney general Jerry Brown (yes, that Jerry Brown) has now joined Illinois in deciding to sue Countrywide. Brown's rhetorical powers have not deserted him:

Countrywide exploited the American dream of homeownership and then sold its mortgages for huge profits on the secondary market," Attorney General Brown said. "The company sold ever-increasing numbers of complex and risky home loans, as quickly as possible. Countrywide was, in essence, a mass-production loan factory, producing ever-increasing streams of debt without regard for borrowers. Today's lawsuit seeks relief for Californians who were ripped off by Countrywide's deceptive scheme.

I'm sure Tanta and others will notice that there's precious little substance to these allegations. But in a cage match between Angelo Mozilo and Jerry Brown, I'd wouldn't place any money on the man with a tan. He's going to need those legal fees that Ken Lewis is so generously paying.

This article has 6 comments! Add yours below...
Felix Salmon

Felix Salmon

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This article has 6 comments:

  •  
    jackooo
    Jun 26 01:54 PM
    My Website
    I wrote and phoned Ca. previous attorney general about the scam but he was not interested. Now the ag is in for the kill. What a waste of office.
  •  
    Richard Weed
    Jun 26 11:30 PM
    Jerry Brown is an idiot. So are the AGs of the states of Washington and Illinois. Unfortunately, some whacko judge who needs public sympathy for re-election will help them unjustly punish a company who followed loose guidelines within a poorly regulated industry. Heaven knows that none of those people were intelligent enough to understand an escrow officer telling them their rate would adjust as they signed hundreds of documents during the hour long process of closing their loan(s). It's all Countrywide's fault...
  •  
    jjason
    Jun 27 11:45 AM
    Loose guidelines in a poorly regulated industry???

    Whatever happened to common sense???

    The bankers screwed up because no one was watching them???

    WTF hasn't anyone understood the gross mismanagement in all of this???

    As Congress and the State AG's attempt to deal with all the ineptitude, dishonesty, deception and outright fraud we are all seeing the results...Stocks crashing, higher unemployment, more homeless, etc., etc.

    It reminds me of what happened in 1989-1990...only it will be worse this time.

    ETHICS ANYONE !

  •  
    Richard Weed
    Jun 27 06:21 PM
    Yeah, jjason, because all the consumers of those loans were ethical when they overstated their incomes and assets to help qualify for more money to keep up with their neighbor's houses, boats and fancy cars. My point is that it's not just Countrywide's fault, it's a lot of people's fault. Countrywide is being used as a scapegoat since they're on their way out of business and into B of A's care.
  •  
    reasonable
    Jun 27 09:42 PM
    It never ceases to amze me, the one sided arguments that pro countrywide people offer. Lending institutions have always been one of the more cautious of all american business as a whole. The consumer has been taught that lenders and their agents are trained individuals that are suppose to know more than the consumer. The investors, those who will buy the notes on the secondary market, also have trusted in a long historical perspective of good, prudent and reasonable risk management by lenders. There is no way any reasonable person can set back and say that we made a small error that needs correcting. No, a mistake of historical proportions has occurred because lenders like countrywide did proceed with practices and policies that were neither ethical or reasonable---all for market share. If it was a little mistake, o.k. we had some rogues, but this is of a proportion that has negatively effected the entire world. Mozillio is the spear head as his speech in 2004 gave us the first hint of what was about to happen. Being an appraiser, Countrywide began almost immediately after with unethical, preditory lending influence that caused me to remove my name from their list. It was so bad that any reasonable person would not operate under those practices. Yes there were many that would and that is why we are here today. But one thing is for certain, Mozillo had the power to lead the industry what ever direction he wanted. Unfortunately he went the most damaging, greedy way he could have. There was plenty of business out there but he wanted it all and he got it----and we the world got it too.
  •  
    hi there
    Jun 28 01:35 AM
    Yes cause a 2yr arm is really hard to understand!hahah

    Both sides were stupid.

    If youre buying a home thats $500k and you make $45k a year do you really think you can afford that home? Or what about the people that more then 1 home...because it was a "good investment" then just walked away when it wasn't worth as much anymore?

    People have to face facts and look at themselves in the mirror. Most of what happened was because of the borrower being greedy...not the loan officer writing the loan....hell if one LO didnt write the loan another LO (or broker) would.

    It has nothing to do with the company!
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