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Countrywide Charges Show Price Of Ignoring Best Practices

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Countrywide Charges Show The Price Of Ignoring Best Practices
It is our duty as a Notary Public to always keep our work ethical and with the highest level of professionalism.

The recent civil fraud lawsuit filed against Countrywide Financial Inc. founder and former Chief Executive Officer Angelo Mozilo by the U.S. Securities and Exchange Commission (SEC) highlights the danger of not following best practices. Countrywide's and Mozilo's improprieties triggered one of the biggest financial messes in the last century, and damaged the ability of many Notaries and others to make a living.
The SEC is accusing Mozilo and two fellow executives - former Chief Operating Officer David Sambol and former Chief Financial Officer Eric Sieracki - of intentionally hiding the fact that the company's loan portfolio was filled with high risk, subprime mortgages in order to build and maintain its market share. Until its demise and takeover by Bank of America, Countrywide was the nation's largest mortgage lender. From 2005 to the end of 2007, the company originated more than $1.3 trillion in mortgages.
In order to generate the massive loan volume, Countrywide set aside sound underwriting practices and was making ever-riskier loans. The subprime mortgages filling Countrywide's pipeline were so destructive that even Mozilo - in internal eMails - referred to them as "toxic" and that the company was "flying blind."
One of Mozilo's most chilling eMails noted that he "personally observed a serious lack of compliance within our origination system as it relates to documentation."
As part of the effort to mislead the public, Mozilo and the other executives falsified annual reports and other required documents, the SEC claims. Mozilo also is accused of fraud and insider trading. He sold off at least $140 million in his personal stocks as a result of insider information he had about the company's questionable underwriting practices.

Article found on NNA National Notary Now Issue # 126 - July 2009

Bill Ladewig
LoanOfficerSchool.com - Escondido, CA
Experience Is Your Advantage

Like attracts like.  Before Countrywide fired all their loan officers around 1973 they had the sleaziest bunch of swede shoe boys on the block. 

After he fired them Mozilo opened small offices staffed with a processor and reduced the typicall FHA one pont loan origination fee to a half point (LO commission) and that was the beginning of Countrywide's success. 

Jul 26, 2009 11:24 AM