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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Boomers retirement may be the true reason behind the labor shortage
(ECONOMY) Millennials and Gen Z were quick to be blamed for the labor shortage, citing lazy work ethic- the cause could actually be Boomers retirement.
In July, we reported on the Great Resignation. With record numbers of resignations, there’s a huge labor shortage in the United States. Although there were many speculations about the reasons why, from “lazy” millennials to the number of deaths from Covid. Just recently, CNN reported that in November another 3.6 million Americans left the labor force. It’s been suggested that the younger generations don’t want to work but retiring Boomers might be the bigger culprit.
Why Boomers are leaving the labor force
CNN Business reports that 90% of the Americans who left the workplace were over 55 years old. It’s now being suggested that many of the people who have left the labor force since the beginning of the pandemic were older Americans, not Millennials or Gen Z, as we originally thought. Here are the reasons why:
- Boomers are more concerned about catching COVID-19 than their younger counterparts, so they aren’t returning to work. Boomers are less willing to risk their health.
- The robust real estate market has benefitted Boomers, who have more equity in their homes. Boomers have more options on the table than just returning to work.
- Employers aren’t creating or posting jobs that lure people out of retirement or those near retirement age.
As Boomers retire, how does this impact the overall labor economy?
According to CNN Business, there are signs that the labor shortage is abating. Employers are starting to see record number of applicants to most posted jobs. FedEx, for example, just got 111,000 applications in one week, the highest it has ever recorded. The U.S. Bureau of Labor Statistics projects that the pandemic-induced increase in retirement is only temporary. People who retired due to the risk of the pandemic will return to work as new strategies emerge to reduce the risk to their health. With new varients popping up, we will have to keep an eye on how the trend ultimately plays out.
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…
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.
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.
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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