Angelo Mozilo, a founder of Countrywide Financial who presided over that lending giant’s rapid ascent and then its collapse during the financial crisis of 2008, died on Sunday. He was 84.
His death, in the Santa Barbara, Calif., area, was announced in a statement by the Mozilo Family Foundation, the family’s philanthropic organization. It did not specify a cause.
Countrywide was a major player in the run-up to the housing crisis, when looser financial regulations enabled lenders to aggressively sell risky mortgage products to prospective homeowners, contributing to a bubble in housing prices. That burst, in 2008, when home values came crashing down, led the U.S. economy into a prolonged recession.
Mr. Mozilo, the son of a Bronx butcher and who worked his way through Fordham University, became one of the most recognized executives associated with the crisis. Motivated by his modest beginnings, he had built Countrywide into one of the nation’s largest mortgage lenders by the early 2000s. But he still wasn’t satisfied: He wanted the company to attain 30 to 40 percent market share, far more than any single lender had achieved.
Countrywide began pushing sales of complex mortgages to prospective homeowners with weaker financial profiles, a group often referred to as “subprime” borrowers. The loans required little or no money down and put many borrowers in homes they would have otherwise been unable to afford. Many of these loans, known as “no-doc” loans, did not require any income verification.
That go-go sales culture propelled the company’s growth and profits but ultimately led to its downfall. As the housing market crashed and borrower defaults soared, Countrywide’s lending practices came under the scrutiny of legislators, regulators and consumer advocates.
Financial pressures began to mount, and the company, based in Calabasas, Calif., west of Los Angeles, was acquired by Bank of America in 2008 at the fire sale price of $4 billion. But the purchase ended up costing Bank of America billions more in legal and other costs it had inherited.
At the time, nearly 150 mortgage lenders had failed, many of which were taken over by healthier institutions.
Mr. Mozilo, recognizable by his crisp suits and deep tan, continued to defend his company throughout the ordeal. “Countrywide was one of the greatest companies in the history of this country,” he told congressional examiners in September 2010, more than two years after Bank of America bought the company.
Regulators had a decidedly different take. In October 2010, Mr. Mozilo agreed to pay $22.5 million to settle federal charges that he had misled investors about Countrywide’s risky loan portfolio. At the time, the settlement was the largest penalty levied by the Securities and Exchange Commission against a senior executive of a public company.
As part of the deal, Mr. Mozilo, who did not admit or deny wrongdoing, agreed to forfeit $45 million in “ill-gotten gains” to settle insider trading and other charges.
Angelo Robert Mozilo, the oldest of five children, was born on Dec. 16, 1938, in the Bronx, where he was raised. When he was about 12, he started helping his father, Ralph Mozilo, in his butcher shop, cleaning floors and cutting up chickens, according to his member profile in the Horatio Alger Association.
By the time he was 14 he had his first job in the financial industry, working as a messenger boy for a Manhattan mortgage company.
He was married to Phyllis (Ardese) Mozilo for more than 50 years. She died in 2017. He is survived by their five children, Christy Mozilo Larsen and David, Elizabeth, Eric and Mark Mozilo; and 11 grandchildren.
Mr. Mozilo said he had been unfairly portrayed as the villain of the housing crisis when scores of other lenders were involved, a perspective echoed by his family.
“Independent of how people outside of the industry may perceive this man, insiders know what an incredible force he was,” Eric Mozilo said in a LinkedIn post on Tuesday.
“He was an excellent father and a legend in the mortgage industry,” he added during a phone call.
Mr. Mozilo and a partner, David Loeb, who died in 2003, started Countrywide in 1969 with $500,000. Within a few decades, the company had grown from a conservative home lender, originally based in New York, to the largest mortgage lender in the United States. As of 2007, it had 900 offices and $200 billion in assets and made $500 billion in loans that year.
In the early 1990s, after government data revealed that lenders were disproportionately rejecting minority borrowers for home loans, Countrywide saw an untapped market and began offering more loans in low-income and minority communities.
“When I first brought the loans into the office, they said: ‘You’re nuts, you’re crazy, don’t do this. There’s a reason why we’re rejecting these people,’” Mr. Mozilo later told the congressional commission investigating the crisis. The loan officers, he said, “had very static, inflexible guidelines.”
As he saw it, Countrywide was helping to break down the racial and economic barriers to homeownership.
So he put the staff through “sensitivity training” and hired more Black and Hispanic employees. Countrywide soon started approving one loan for every two applications reviewed, according to Mr. Mozilo. Previously, it had been approving one loan for every four applications. The new loans “did perform,” he said.
But that performance did not last. In 2006, Mr. Mozilo described some of the company’s riskier loans as “poison,” according to internal Countrywide emails released by the S.E.C. in 2009. “In all my years in the business, I have never seen a more toxic” product, he wrote in one email.
More than a decade later, Mr. Mozilo recalled how difficult that period was for his family, but continued to defend his and his company’s legacy at a financial conference in Las Vegas.
“Of course it bothers me,” he said, according to a 2019 CNBC report. “It affected my reputation, it affected my family, it had a profound impact on my entire life. So I cared. Then a lot of years went by, and my wife passed away, and I turned 80 years old, and now I don’t care. There’s other things more important in life.”
Ben Protess contributed reporting.