Angelo Mozilo Live

hmmm.... " I moved into this home in May of 1992"...

Ok, that was 16 years ago, real estate has tripled since then... Sounds to me like this person refinanced and took some cash out. What did he do with the cash?

I am more than willing to look at someone who thru some unusual event is in a hole, but I have a tough time feeling sorry for someone who took out additional cash to buy a car, pay off credit cards or go on vacation.

I agree Mozilo was a major force to the proble, but borrowers that refinance themselves into the poor house need to take some responsibility.

How is it that a homebuyer from 1992 is today having a problem paying his mortgage? Were not homes much less expensive then, epecially in (I am making an assumption here) California? So we can guess there was refinancing here. Potentially cash-out refinancing. How was that money used? Was it for a critical medical operation? Was it for a new SUV and a nice television?

I have no affection towards Mozilo. He is a creep. But before we shower this homeowner with grief, let us better understand his scenario. His *full* scenario.

1) I think you meant NINJA loans: no income, no job, no assets.

2) Mozilo may not be wrong. Are people looking to renegotiate their mortgages using boilerplate sob stories? That wouldn't surprise me in the least - if they lied to get the original loan(s), why wouldn't they lie now? I agree with the other posters: not being able to pay a mortgage on a home bought so long ago is very fishy.

Might be interesting to see what the other letters look like. If they all got clean and sober the year they bought their 900 SQFT bungalow, then Yes, it is disgusting.

We do need our scapegoats, don't we...
Roy Kroc is why I am fat,
The Marlborough Man is why I smoke,
Mom didn't hug me enough so I need porn,
Immigrants are taking all the good jobs,

Blah, blah, blah!

The artificially-tanned "Tangelo" needs better PR right now. It could help with the jury and, eventually, his fellow inmates.

The borrower obviously thinks because he had equity at one point that he is deserving of more sympathy than people who purchased their homes recently. Instead of paying off his loan he used his house as an ATM. I can't say I feel for the guy.

I can't fault some one for trying to get help, but he can't be expected to be singled out from everyone else if he are going to appeal using the same wording as everyone else. Too bad there is not a different, more heart wrenching, way to say " I used all the money you lent me and now I can't pay it back" .

This borrow bought his house in 1992 (what? $40,000?) and his letter to CEO Mozilo he said he was told that after the first year of payments, he would be able to refinance to a better fixed rate- then the bottom fell out of the industry. Amusingly, I've heard this slogan so many times by the mortgage brokers. Anyway, obviously, he took a cash-out refinance with a 1 year ARM. Then the ARM adjusted he can not make payments.

Where is the money that he refinanced with cashed out?

I think you're missing the point. And no, not all people are losing their homes because they lied to get them. Since you haven't noticed, epecially living in MA, the job market is poor. Many people have lost their jobs, some borrowers didn't understand the terms of the loans, etc. The point is, you don't know this guys situation and neither did Mozilo. He cast a judgement and didn't care to ask. Talk about placing blame on someone else. He is the epidamy for corporate greed and yet still making millions for his unethical behavior.

I think it is more than a little tacky to throw Roland Arnall's name in the mix there, seeing as he passed away in March...

Binyamin, though this is from the LA Times, I am surprised that you would post this type of tabloid style journalistic information. Where is the content? The Blog sounds like a contest to see who can bash one side or the other the hardest.

There is simply too much missing from the story. No question that the corporate email is a very unsympathetic comment. However, as a medical professional, I see people every day who use their life savings, in whatever form is available to them, to care for ill family members and to finance other life needs for loved ones. I agree with Middle and would not pass judgement on this borrower based upon what you have presented.

Several of you have taken up the question of whether or not Mr. Bailey deserves to be saved. I agree with those who have noted that we simply don't know enough about his case to make such a judgment.

I'm much more interested in Mr. Mozilo's behavior.

Countrywide's critics say the company has long demonstrated a reckless disregard for the welfare of its customers, during the boom and now, and it strikes me that Mozilo's email lends credence to those charges.

Aside - Mr. Mozilo was correct in that this was drafted from a form letter

Taken from LA times:
"After receiving the "disgusting" e-mail comment from Mozilo, Bailey wrote a second e-mail to Countrywide, acknowledging he had consulted an online forum for advice in drafting a hardship letter to Countrywide: "In attempting to come to some way to save my home, I took the advice on forming my hardship letter from a forum."

Binyamin,

This blog topic is a sad departure from your typical, thought provoking and insightful observations. Perhaps you fell asleep watching a "It's a Wonderful Life" marathon and hope to expose a real world Mr. Potter. Are you really shocked to learn that Mr. Mozilo finds obviously mass-produced, “personal” appeals disgusting?

Perhaps Mr. Mozilo went too far in breaking down the barriers to borrowing and began loan sharking to widows and orphans. Let’s leave the law to sort out that evidence. My read is that Mr. Mozilo stands to lose far more than Mr. Bailey. At least Mr. Bailey still has friends.

It's a perfectly legitimate post topic. The RE industry reaps enormous benefit by spinning its often dubious business practices as "helping people find the homes of their dreams." Let the public--and Congress--see what these people are really like. They're not very helpful at all, it turns out.

Oh, and complaining about the use of a form letter is laughable, coming from a company that has denuded entire forests not only for form letters, but form Affidavits of Lost Notes. There's not even an allegation that Mr. Bailey plagiarized the facts of his hardship letter--that he took the description of his injury or his '93 truck from an Internet site. He simply copied a common format.

I don't have much sympathy for Mr. Bailey., who I bet had not trouble spending his cash out money

I have less sympathy for Mozillo, who basically aided and abetted a legal ponzi scheme in my opinion - he seems to have been one of the chief pourers of gas on the bubble fire.

A pox on all their houses, as it were.

Did I miss something while reading? I don't remember reading the home owner re-fi'd at all, where did that assumption come from? Do we have enough information to be making any assumptions of the home owner at all aside from the fact he fell behind on his mortgage and was hoping by contacting the most senior person at the bank they might have mercy on them?

It's really not all that uncommon a practice in business to go straight to the top of the food chain to get results. Good for him for trying; didn't work this time. You have to hear a lot of "no's" to get a "yes".

And while I don't like the unfortunate fall out of what Mozilo did, what did he say that was really all that bad? I've read, heard and had much worse opinions than what Mozilo expressed. Good grief we're all becoming self righteous.

"I don't remember reading the home owner re-fi'd at all, where did that assumption come from? "

Well, the home was bought in 1994. So we can assume, as a bungalow (which are very common in California), it cost 175,000 at that time? Maybe even closer to 150,000 or less... 1994 was a bad time for RE. Today it could be worth closer to 400k, maybe even 450k if its a great location. Maybe more. In other words, the mortgage cost should be less than the average cost to rent an even small place. His mortgage would be dirt cheap. He should have a ton of equity in this home. He should have no problem paying such a small mortgage. Also, there was NO subprime predatory lending in 94, at least not on the scope of 2003.

So it is virtually guaranteed that there was refinancing, probably with cash out, involved in this situation. Guaranteed. So, what was that money used for? Investing? To put towards an education? A medical issue? A new motorcycle?

Listen, I dont intend to blame the homeowner any more than Mozilo. Mozy looks like a french fry in a suit. He has virtually stole millions from his own company through stock grants which were unwarranted, offering loans whose terms were difficult to understand. But, before we label this homeowner as a completely innocent victim, its only fair to understand their full situation.

"We can assume...could be..should be..should have no problem...virtually guaranteed...a new motorcycle..."

It is entirely possible the homeowner has his original mortgage. We don't know. He has stated that he has lost work income. That we do know.

Other than that, let's be careful when we assume. You rightfully say we should understand his full situation before labeling him an innocent victim. Same goes for labeling him a reckless borrower.

At the end of the day, the real story here is not Mr. Bailey. It's Tangelo. We now have an inside look at the true depth of one lenders' "commitment to working with homeowners."

Do you know who owns your NOTE? No Note no CASE!

Mozo should have to give him his house and a few BUCKS for this kind of thing. I hope this guy SUE's MoZo!

The owner bought in 1992. My assumption is that some time before 2005 he refinanced with possibly 1 year ARM and cashed out. The mortgage broker said to him that after 1 year he could refinance again. Whatever the ARM term was, got adjusted. Here is the full story/letter:

Subject bailey acct# xxxxxxxxxxx

To Whom It May Concern:
I am writing this letter to explain my unfortunate set of circumstances that have caused me to become delinquent on my mortgage. I have done everything in my power to make ends meet but unfortunately I have fallen short and would like you to consider working with me to modify my loan. My number one goal is to keep my home that I have lived in for sixteen years, remodeled with my own sweat equity and I would really appreciate the opportunity to do that. My home is not large or in an upscale neighborhood, it is a “shotgun” bungalow style of only 900 sq. ft. built in 1921. I moved into this home in May of 1992…this was the same year I got clean and sober from drugs and alcohol, and have been ever since, this home means the world to me.

The main reason that caused me to have a hardship and to be late is my misunderstanding of the original loan. I was told that after the first year of payments, I would be able to refinance to a better fixed rate- then the bottom fell out of the industry. My payments for that first year were on time. I also lost my second income due to physical conditions in a very physically demanding industry.

As my ARM payments increased, I have had less money to put towards making my business (income) work. I had been unable to generate business because all of my funds were going towards attempting to make my loan payments. This, coupled with major repairs to my vehicle (93 jeep) and paying out of pocket for medical and dental issues (I have no ins.) caused me to fall further and further behind, destroying my credit rating.

Now, it’s to the point where I cannot afford to pay what is owed to Countrywide. It is my full intention to pay what I owe. But at this time I have exhausted all of my income and resources so I am turning to you for help.

I feel that a loan modification would benefit us both. With that, and knowing my home will not be foreclosed, I would be able to obtain a roommate in order to generate more income, have the funds to generate more business and have a good working relationship with Countrywide. I would appreciate if you can work with me to lower my delinquent amount owed and payment so I can keep my home and also afford to make amends with your firm.

I truly hope that you will consider working with me and I am anxious to get this settled so we all can move on.
Sincerely and Respectfully,

Daniel A Bailey Jr.
Loan # xxxxxxxxxxx
Dan Bailey

"My assumption is that some time before 2005 he refinanced with possibly 1 year ARM and cashed out. The mortgage broker said to him that after 1 year he could refinance again. "

I knew these loands were a bad idea idea. So did you, Im sure. This homeowner made a BAD choice. No doubt, the mortgage company took advantage of somebody who didnt/wouldnt read the details. It really wasnt nearly as hard to understand these loans as people suggest.

The letter says - "The main reason that caused me to have a hardship and to be late is my misunderstanding of the original loan".

We know that is wrong. What caused him to have hardship was to borrow so much money against him home. Again, for undisclosed expenses. If he never borrowed more money against his home, we wouldnt have a problem. But he did. Who knows how he spent it. But you dont care, because whenever J6P runs into a problem, he is automatically a "victim", and you are just out to punnish some rich guy.

I think the problem with this country is too many people crying "victim", not enough people accepting accountability. If you want to live in a no-fault, socialist country, there are dozens to chose from. Please feel free to move to one of them. I dont want to live in that type of country, and thus have very few choices of where to go. Please dont try to convert my nation any further into one of them.

Oh come on...sure the guy's a victim in not knowing what this type of loan would actually create for his future, and did not understand this - and yes of course he ref'd...yet it runs both ways, he DID CHOOSE To go for the cash, and Countrywide obviously didn't care for anything but the cash at that crucial time either. Both were in for getting the money, regardless of how it was spent and regardless of how it would be repaid. It would be nice if he owned up to his part in this play. He further thinks he'll get assistance by playing victim -- Yet, in fact if he took some responsibility ...I'm certain that if he'd be willing to make payments and modify the loan, that Countrywide's would try on their side to see if the investor would allow for a rewrite on the loan. I'm sure that Countrywide doesn't want to have the wall street investors having to know the "reality" of how the debt ratio's on the original underwriting were actually calculated...failing to assume that the payments would increase and so wouldn't the debt ratio's. It seems this was never accounted for on any of these neg am -or adjustable loans. Although, now that I think about it...shouldn't the investors have ever looked at what they were buying, and checked on the underwriting and wondered about this?? They are now stating how unaware they were and yet this is hard to imagine they'd spend millions and never look at any of the paper they were buying/and reselling themselves -- aren't they also accountable.

I'm curious...the loan runs for 30 years average, yet the qualifying only required the first year on income debt ratio's -- so that would mean that all the investors who also must have reviewed some of the packages must have known this fact, that the borrower's would NOT qualify in the following years, unless their incomes rose substantially,OR if the value's continued to appreciate...and obviously this falls back on everyone to be at fault. Wall street made tons of money when times were good, and so didn't all the investors...I think it only fair that all the actual investors should assist in making this affordable for the borrowers since these same borrower's allowed for everyone's success to occur. Its a domino affect and each party is responsible.

This man needs to stand up and get some control back over himself, and take some responsibility. Countrywide has just released some "new" reasonable loan terms for both borrowers and the Investors in order to assist the situation for all sides. I wish him good luck in his modification and hopefully he'll stop whining. I'm just hoping Angelo (before departing C) will assist with his creativity on the rewrites, as this same creativity that allowed the original loans...this is what will assist in saving the mortgage mess. Angelo needs to stay around a bit longer as this is his time to make it right.

It is a shame that there were no regulators to keep all from going overboard in the last real estate cycle that perhaps lasted longer than was ever expected.( I think everyone wanted to believe it wouldn't end- I know I wanted to believe this thought) . It seems all we needed was the loans to have been made with consideration to the future. Angelo and everyone else lost sight of the future that was being created. He is no more at fault than anyone else, except we still want someone with wisdom to keep us from harming ourselves...and I think for myself, I feel that Angelo needs to assist in cleaning up these messes and leave with dignity and integrity and this would allow such an ending.

As a head of such a large company, and so many years experience - one would Hope that he would have pulled back in 04' when it was quite apparent that the market trend would be hitting it's peak within two years -- Yet, Merrill, and all the other financial institutes offered the same loans, and yet since Countrywide was the leader...it seems to take the blame for all of this. Here we are in mid 2008' and I think it's been a big lesson to not go overboard and for me, it's a lesson that each one of us must be responsible for ourselves, and have to stop playing victim, and stand up and get a new plan together. The financial world will always kick back it just may take us 10-12 years, and so we need to have loans which can sustain. Thanks for allowing me this blog...