Angelo Mozilo, the former CEO of Countrywide who was widely blamed for the housing crisis, says banks should get back into mortgage lending

REUTERS/Lucas Jackson

Angelo Mozilo, the former CEO of Countrywide Financial who was one of several financial executives blamed for the financial crisis, believes the banks should be underwriting more mortgages.
Mozilo, speaking at the SALT Conference in Las Vegas, told the audience that the mortgage bankers that have filled the gap since the crisis once the major banks pulled back from the space are "unregulated."
Mozilo also said that subprime mortgages was "not the cause at all" of the 2008 financial crisis, claiming it was just an "easy target for the politicians and the media."

The man CNN recently called the "face of America’s mortgage nightmare" thinks banks should get back in the business of writing home loans to individuals.

Angelo Mozilo, in a rare public appearance in front of a crowd at the SALT Conference in Las Vegas, said banks have left the mortgage space to potential bad actors in the mortgage banking space that are "unregulated."

"[The banks] are not involved in the mortgage business, and that’s where they should be. Serving the people of this country, and giving people the opportunity to own homes, to own cars," said Mozilo, the former CEO and chairman of troubled mortgage lender Countrywide Financial, which was later sold to Bank of America.

"The banks are not lending the way I think they should."

While he doesn’t think the current system is "a recipe for disaster," he thinks the banks "may even be overcapitalized" now.

"Banks are certainly not overleveraged," he said.

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Mozilo also told attendees that Fannie Mae and Freddie Mac should not be under government conservatorship, a stance shared by several well-known hedge fund managers like John Paulson. The head of the Federal Housing Financing Agency recently said that the mortgage companies can be taken out from governmental control without legislation, as many previously thought was required.

Mozil0 cofounded Countrywide in 1969. He helped create and popularize subprime mortgage, with Countrywide then packaging these mortgages up via a process called securitization and selling them to investors. When the bottom fell out of the housing market in 2007, Countrywide reported a $1.2 billion loss, and it later sold to Bank of America for $4 billion.

As the housing crisis helped bring down the global economy, many pointed the finger at Mozilo. He was named one of the 25 people to blame for the financial crisis by Time magazine, which said at the time that its "all-out embrace" of offering "exotic mortgages to borrowers with a questionable ability to repay them … did legitimize the notion that practically any adult could handle a big fat mortgage."

In 2010, he agreed to pay a record $67.5 million to the SEC to settle fraud charges. Robert Khuzami, then the director of the SEC’s Division of Enforcement, said at the time that "Mozilo’s record penalty is the fitting outcome for a corporate executive who deliberately disregarded his duties to investors by concealing what he saw from inside the executive suite."

At SALT, Mozilo bristled at the notion that the collapse of the subprime mortgage market was the root cause of the financial crisis. He said the assets in the subprime space compared to the overall assets in the world were "a pebble in an ocean."

"Everybody blames subprime, which to me is really just nonsense. It was not the cause at all," he said.

"It was an easy target for the politicians and the media."

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