Countrywide: Borrowed Time. Who Will Take the Blame for America’s Mortgage Crisis?

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UYGUR: We‘ve got new stomach turning details about exactly who is being made to pay for the biggest housing bubble in U.S. history and who isn‘t? First, here‘s who is laughing all the way to the bank. Angelo Mozilo, former chief executive of Countrywide Financial which made billions as the housing market inflated. From 2000 to 2008, Mozilo personally received $528.8 million in total compensation. As he say regulators, say he sold $140 million in country wide stock between ‘06 and ‘07, at the same time, regulators say that Mozilo‘s—he called Countrywide‘s loans, quote, “toxic” and, quote, “poison.” Even though countrywide was still selling the loans. Now, do you think he got punished? Do you think he went to jail? Of course not!

In 2010, Mozilo settled with the SEC and was assessed a $67.5 million fine. Now, that sounds bad, right? Except, of course, he didn‘t really pay it. Countrywide and Bank of America paid $45 million of it, meaning that he paid less than five percent of the money that he had made from Countrywide. Got away with it with nearly $500 million in the bank. And on February 18th of this year, the Los Angeles Times reported that the Feds shelved their criminal investigation into Mozilo, they‘re apparently determined his actions didn‘t amount to criminal wrongdoing. So there‘s no indictments for Mozilo or any other top Countrywide executives. Now, that‘s outrageous, right? Mozilo is walking away incredibly rich even though he knew the stuff was toxic and poison, right? So, that means they went and got nobody, right? No, not true.

Turns out they did get somebody. Now, look at who‘s behind bars. The “New York Times,” this weekend told the story of Charlie Engle, he is an ultra marathoner. And it turns an IRS agent Robert Norlander saw one of Engle‘s documentaries, Sahara where he goes to marathons through the whole Sahara that was produced by Matt Damon among others. And IRS and I just wonders, how could anybody have that much time to train? So, he gets obsessed by this, and he starts an investigation into that guy Engle for fraud, tax fraud. Guess what he found, nothing, nada. But he won‘t let it go. So, you keep haunting Engle and he even did dumpster diving, which means that he dumped, diving to dumpster and looked through Engle‘s garbage.

OK. Now, that all sounds crazy, right? But I guess crazy, he sent a female undercover agent to ask Engle about his investments. And she was pretending to seduce him. She‘s like, oh really, tell me more about your real states investments. Who knew the IRS does that? I mean, if you‘re going to do that, sent him after Mozilo, not after this random Engle guy, and Engle admits to the lady, oh, you know, I was trying to flip real estate at some point which, by the way, many people have done and many people have lost money as Engle did, that‘s not illegal. Engle also mentioned that he had a liar loan that his broker had written down, right? They‘re like aha, we got him, finally after all the dumpster diving.

So, there were two mortgages in particular, right? One claimed that he had made 15 grand a month. And he made $180,000 for the whole year. So, he did make 15 grand a month, he didn‘t even lie on that at all. The other said that he made over $32,000 a month, which he didn‘t. Now, Engle said he didn‘t know about that $32,000 claim. Now jurors kind of believed him, kind of didn‘t believe him and got confused. They found him not guilty of providing false information to the bank, which means he shouldn‘t be guilty of mortgage fraud, but they found him guilty of mortgage fraud anyway. Now, are you ready for this? He‘s serving 21 months in prison. So Mozilo, none of those guys get a prison sentence but this guy is in prison for 21 months. And by the way, you know who owns the loan? Countrywide which is now owned by Bank of America. When he gets out, he‘s got to pay them back. Oh, come on, man. That‘s our system, unfortunately.

About William Brighenti

William Brighenti is a Certified Public Accountant, Certified QuickBooks ProAdvisor, and Certified Business Valuation Analyst. Bill began his career in public accounting in 1979. Since then he has worked at various public accounting firms throughout Connecticut. Bill received a Master of Science in Professional Accounting degree from the University of Hartford, after attending the University of Connecticut and Central Connecticut State University for his Bachelor of Arts and Master of Arts degrees. He subsequently attended Purdue University for doctoral studies in Accounting and Quantitative Methods in Business. Bill has instructed graduate and undergraduate courses in Accounting, Auditing, and other subjects at the University of Hartford, Central Connecticut State University, Hartford State Technical College, and Purdue University. He also taught GMAT and CPA Exam Review Classes at the Stanley H. Kaplan Educational Center and at Person-Wolinsky, and is certified to teach trade-related subjects at Connecticut Vocational Technical Schools. His articles on tax and accounting have been published in several professional journals throughout the country as well as on several accounting websites. William was born and raised in New Britain, Connecticut, and served on the City's Board of Finance and Taxation as well as its City Plan Commission. In addition to the blog, Accounting and Taxes Simplified, Bill writes a blog, "The Barefoot Accountant", for the Accounting Web, a Sift Media publication.
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