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Economic News

Mozilo claims mortgage crisis is fault of homeowners

Many consider Mozilo to be the greatest mortgage villain of all time, but he’s avoided criminal charges, and now has the audacity to blame homeowners and values for Countrywide’s woes, still claiming his leadership was good.





Mozilo claims Countrywide wasn’t the problem

According to a 2011 deposition of former Countrywide CEO, Angelo Mozilo released this month, Mozilo firmly denies that his company was the problem, after the purchase of the mortgage company did massive damage to Bank of America. Alluding to the company as his sixth child, he said under oath that Countrywide, a “world-class company” was sold to Bank of America just as the housing bubble burst, and that the economy was to blame for the mortgage crisis, allotting no blame to Countrywide.

Many consider Mozilo a disgraced industry insider, best known for paying $67 million to settle with the Securities and Exchange Commission (SEC) two years ago. When asked in court if he had regrets regarding how he operated Countrywide, after all of the foreclosures, “ruined lives,” and lawsuits, to which he placed blame completely on home values that fell, and homeowners that gave up and walked out.

Mozilo said, “These people didn’t lose their jobs. They didn’t lose their health. They didn’t lose their marriage. Those are the three factors that cause foreclosure. They left their home because the values went below the mortgage. That’s what caused the problem.”

In addition to Mozilo insulting homeowners, he asserted in court that he was a great leader because Countrywide didn’t make loans in Greece, Ireland, or Portugal, insinuating that the Eurozone crisis is also to blame, but again, he is not to blame.

Mozilo’s rocky past

A few years ago, the SEC alleged that Mozilo knowingly and falsely reassured investors about the quality of Countrywide loans, and right before the crash, Mozilo gained $140 million of “improper gains” from insider stock sales. For these two things alone, many believed he should be held criminally responsible for, but the case was, and still is “shelved.” Interestingly, the “Friends of Mozilo” scandal still pops up new names of celebrities and politicians that got sweetheart mortgage deals through Mozilo himself.

Mozilo maintains his criminal innocence despite the SEC settlement and the State of California ruling that he and another exec pony up $6.5 million for predatory lending.

In 2008, Bank of America purchased Countrywide for $4 billion, absolving Mozilo of his involvement, leading to over $40 billion in litigation and settlement costs, with more lawsuits rolling in every month against Countrywide.

Although Countrywide remains the named defendant, Bank of America as the new owner is responsible for any costs associated with the final result of the endless lawsuits, because Countrywide can be Mozilo’s “sixth child” all he wants it to be, but Bank of America CEO Brian Moynihan is the new daddy, and he’s responsible for all of the damage still being uncovered so many years later.

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Tara Steele is the News Director at The American Genius, covering entrepreneur, real estate, technology news and everything in between. If you'd like to reach Tara with a question, comment, press release or hot news tip, simply click the link below.

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  1. George L. Duarte

    December 20, 2012 at 3:49 pm

    Countrywide and World Savings approved any clown with a pulse to broker loans for them- hustlers, thieves, shysters of all types were sweeping floors one day, then mortgage brokers the next thanks to Angelo and World! Quick buck artists got in the business to screw as many people out of as much money as possible accordingly. Their evil practices were enabled by dense and confusing disclosures, Notes, Deeds in legalistic language no one could understand.

  2. fredglick1

    December 20, 2012 at 3:50 pm


  3. George Berdos Jr.

    December 20, 2012 at 4:03 pm

    Funny thing, they don’t loan money to people that do not apply. So the headline is partially correct. As for the mortgage bankers fudging the documentation and doing other illegal stuff regarding the mortgage loan file, they bear responsibility for that.

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Economic News

Is the real estate industry endorsing Carson’s nomination to HUD?

(BUSINESS NEWS) Ben Carson’s initial appointment to HUD was controversial given his lack of experience in housing, but what is the pulse now?



NAR strongly backs Dr. Carson’s nomination

When President-Elect Donald Trump put forth Dr. Ben Carson’s name as the nominee for Secretary of Housing and Urban Development, NAR President William E. Brown said, “While we’ve made great strides in recent years, far more can be done to put the dream of homeownership in reach for more Americans.”

At the time of nomination, the National Association of Realtors (the largest trade organization in the nation) offered a positive tone regarding Dr. Carson and said the industry looks forward to working with him. But does that hold true today?

The confirmation hearings yesterday were far less controversial than one would expect, especially in light of how many initially reacted to his nomination. Given his lack of experience in housing, questions seemed to often center around protecting the LGBT community and veterans, both of which he pledged to support.

In fact, Dr. Carson said the Fair Housing Act is “one of the best pieces of legislation we’ve ever had in this country,” promising to issue a “world-class plan” for housing upon his confirmation…

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Economic News

Job openings hit 14-year high, signaling economic improvement

The volume of job openings is improving, but not across all industries. The overall economy is improving, but not evenly across all career paths.



young executives

job openings

Job openings hit a high point

To understand the overall business climate, the U.S. Labor Department studies employment, today releasing data specific to job vacancies. According to the department’s Job Openings and Labor Turnover Survey (JOLT) for April, job openings rose to 5.38 million, the highest seen since December 2000, and a significant jump from March’s 5.11 million vacancies. Although a lagging indicator, it shows strength in the labor market.

The Labor Department reports that the number of hires in April fell to 5 million, which indicates a weak point in the strong report, and although the volume remains near recent highs, this indicates a talent gap and highlights the number of people who have left the labor market and given up on looking for a job.

Good news, bad news, depending on your profession

That said, another recent Department report notes that employers added 221,000 jobs in April and 280,000 in May, but the additions are not evenly spread across industries. Construction jobs rose in April, but dipped in professional and business services, hospitality, trade, and transportation utilities. In other words, white collar jobs are down, blue collar jobs are up, which is good or bad news depending on your profession.

Additionally, the volume of people quitting their jobs was 2.7 million in April compared to the seven-year high of 2.8 million in March. Economists follow this number as a metric for gauging employee confidence in finding their next job.

What’s next

If you’re in the market for a job, there are an increasing number of openings, so your chance of getting hired is improving, but there is a caveat – not all industries are enjoying improvement.

If you’re hiring talent, you’ll still get endless resumes, but there appears to be a growing talent gap for non-labor jobs, so you’re not alone in struggling to find the right candidate.

Economists suspect the jobs market will continue to improve as a whole, but this data does not pertain to every industry.


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Economic News

Gas prices are down, so are gas taxes about to go up?

Do low gas prices mean higher gas taxes are on the way? Budgeting for 2015 just got a bit more complicated, if some politicians have their way.



gas tax


Gas taxes and your bottom line

Many industries rely heavily on time in their vehicle, not just truck drivers and delivery trucks. Sales professionals hop in their vehicles throughout the day, as do many other types of professionals (service providers like plumbers, and so forth). For that reason, gas prices and taxes are a relevant line item that must be budgeted for 2015, but with politicians making the rounds to push for higher gas taxes, budgeting becomes more complicated.

Gas prices are down roughly 50 cents per gallon compared to a year ago, which some analysts say have contributed to more money in consumers’ pockets. Some believe that this will improve holiday sales, but others believe the timing is just right to increase federal taxes on gas. The current tax on gas is 18.40 cents per gallon, and on diesel are 24.40 cents per gallon.


Supporters and opponents are polar opposites

Supporters argue as follows: gas prices are low, so it won’t hurt to increase federal gas taxes, in fact, those funds must go toward improving our infrastructure, which in the long run, saves Americans money because smoother roads mean better gas mileage and less congestion.

Gas taxes have long been a polarizing concept, and despite lowered gas prices, the controversial nature of the taxes have not diminished.

While some are pushing for complete abolition of federal gas taxes, others, like former Pennsylvania Governor, Ed Rendell (D) tell CNBC, “Say that cost the average driver $130 a year. They would get a return on that investment” in safer roads and increased quality of life, he added.

The Washington Post‘s Chris Mooney points out that federal gas taxes have been “stuck” at 18 cents for over 20 years, last raised when gas was barely a dollar a gallon and that the tax must increase not only to improve the infrastructure, but to “green” our behavior, and help our nation find tax reform compromise.

Is a gas tax politically plausible?

Mooney writes, “So, this is not an argument that a gas tax raise is politically plausible — any more than a economically efficient tax on carbon would be. It’s merely a suggestion that — ignoring politics — it might be a pretty good idea.”

Rendell noted, “The World Economic Forum, 10 years ago, rated us the best infrastructure in the world,” adding that we “need to do something for our infrastructure, not in a one or two year period, but over a decade.”

Others would note that this rating has not crumbled in just a few years, that despite many bridges and roads in need of repair, our infrastructure is still superior to even the most civilized nations.

Regardless of the reasons, most believe that Congress won’t touch this issue with a ten-foot pole, especially leading up to another Presidential campaign season starting next year.

“I think it’s too toxic and continues to be too toxic,” Steve LaTourette (the former Republican congressman best known for his close friendship with his fellow Ohioan, Speaker John Boehner) tells The Atlantic. “I see no political will to get this done.”

Whether the time is fortuitous or not, and regardless of the positive side effects, many point to a fear of voters’ retaliation against any politician siding with a gas hike, so this matter going any further than the proposal stage is unlikely.

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