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» VISIT US ONLINE @ DSNEWS.COM 49 His past research on the GSEs turned up a 2003 press release in which Fannie Mae applauded major lenders, including Countrywide for helping Fannie execute its own $2 trillion affordable housing commitment. "Together, America's top lenders and Fannie Mae have made terrific progress in bringing the nation's housing boom to overlooked Americans and addressing the gaps in housing," then Fannie CEO Franklin Raines is quoted as saying. Just a few years later, Franklin Raines would step down from his role after the Securities and Exchange Commission issued a harsh report on Fannie's accounting standards in the years stretching from 2001 to 2004. If Raines faced trouble in 2004, it was a mere blip on the radar screen compared to the challenges Mozilo and Countrywide faced in 2008. "NO, NO, NO, WE DIDN'T DO ANYTHING WRONG." But despite persistent rumors and market reports suggesting the government is still investigating Mozilo's past deals and contemplating going after the millions of dollars he made while running Countrywide aground, he is not hanging his head in shame. When asked about his inquiries into the compensation level of Mozilo and other executives, Kucinich was not shy. "It's outrageous! I complained at the time about the level of compensation that Mozilo and others were receiving, despite the fact that there were millions of people losing their homes. "If you look at the transactions at that time as being fraudulent, when people have gains that are ill-gotten and can be traced to fraud, they are supposed to lose those gains. We know that didn't happen. Across the board there were people running big companies who were able to have their companies pay fines. ey were able to capitalize for themselves on the conditions and the shareholders were the ones who took the hit." Legacy mortgage issues may still plague Bank of America from its acquisition of Countrywide during the subprime lender's tragic fall, but Mozilo is playing innocent and defending what Countrywide became under his reign. e former subprime lender went as far as making the rounds on cable television recently to defend his reputation. In a September interview with Bloomberg, the former CEO defended his firm and his own reputation. "No, no, no, we didn't do anything wrong," Mozilo said. "Countrywide or Mozilo didn't cause any of that." Instead, Mozilo pointed to a shifting real estate market, portraying himself as an innovative lender who merely became a tragic figure in a sad tale of unexpected home price declines and changing consumer trends. Mozilo's name is still in the papers today, with it evident that federal prosecutors would like to take down "Mr. Subprime" himself. Some of the eagerness to investigate Mozilo may stem from a desire to silence criticism that the government let individual CEOs off too easily during the housing meltdown. "I think there is still a view that the perpetrators haven't been punished," Pinto pointed out when asked about Mozilo potentially facing renewed government scrutiny. THE FALL OF MOZILO By the mid-nineties, the government- sponsored enterprises had loosened their credit box, and the goal of extending credit to underserved areas and creating national lending initiatives seeped into every nook and cranny of the White House and Congressional policymaking. e shift was coming, and Mozilo was about to benefit profitably from the government's new interest in everything housing. In the years to come, aggressive policies aimed at expanding credit formed, including one of Mozilo's favorites: e Best Practices Initiative from HUD. Countrywide was viewed as the star player in the Best Practices Initiative, which encour- aged banks to not only ensure compliance with the Community Reinvestment Act, but to push the envelope further by ensuring even more ac- cess to credit in underrepresented markets. With these best practices came loose underwriting guidelines. Lower down payment loans and slower amortizing mortgages began to take root. When Mozilo wasn't busy serving as HUD's affordable lending star, he was rubbing elbows with lawmakers. In July 2012, Rep. Darrell Issa (R-Calif.), released a report from the House Oversight and Government Reform Committee. e report detailed how Countrywide used its VIP Program, otherwise known as "Friends of Angelo", to offer sweet loan deals to 12 members of Congress. "Other than Countrywide, no other entity's employees received more VIP loans than Fannie Mae," Issa stated at the time. "Even as Countrywide's CEO Mozilo mocked Fannie Mae and top executives for its crony capitalism business model, he would nonetheless personally intercede to ensure executives had access to discounted Countrywide loans. ese relationships helped Mozilo increase his own company's profits while dumping the risk of bad loans on taxpayers," Issa concluded. e VIPs linked to Mozilo's sweet- deals program included former Senate Banking Committee Chairman Chris Dodd (D-Conn.), also known as a drafter of the Dodd-Frank financial reform bill; former Senator and Budget Committee Chairman Kent Conrad (D-N.D.); and key Senate staff members. Issa's report also associated a few congressmen as Friends of Angelo: Howard "Buck " McKeon (R-Calif.); Pete Sessions (R-Texas); Edolphus Towns (D-N.Y); and former Rep. Elton Gallegly (R-Calif.). "You had a government that was essentially incapable of enforcing the law because of its closeness to Wall Street with the rise of hedge funds and the enormous amounts of money that they put into the political process," Kucinich opined. "It created a seamless transition from the policies George Bush to Barack Obama." Eventually, the sweet deals Mozilo offered to lawmakers soured when the company faced severe headwinds during the financial crisis. And while Countrywide is no longer in existence, its legacy still haunts Bank of America, which acquired the lender several years ago. In August of 2014, Bank of America agreed to pay $16 billion in cash and consumer relief to settle mortgage-related issues raised by the Department of Justice, other federal agencies, and six states. e settlement included $9.65 billion in cash and $7 billion in consumer relief. Bank of America executives were quick to point out that the deal resolved legacy mortgage issues stemming from the bank's acquisitions of Countrywide and Merrill Lynch. Yet, as the mortgage industry continues to fight back, hoping for a new generation of customers to emerge, it is clear Angelo Mozilo has moved on. e former executive told Bloomberg he is staying busy these days–even investing money in an Arizona building that houses a Taco Bell. It may not seem as profitable as mortgages, but neither were loans catering to underserved populations in the 1980s. Mozilo, with a bit of help, changed all that. After he found success, he hit the escape button, leaving others to shoulder the blame, his critics contend. But even if Angelo Mozilo is perceived as the mortgage industry's face of greed, corruption, and failure, he himself is not buying that story. COVER STORY M ARKET PUL SE INDUSTRY INSIGHT INDUSTRY INSIGHT

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