Posted on 10/29/2007 8:59:36 PM PDT by bruinbirdman
Angelo Mozilo, chief executive of Countrywide Financial, on Monday strongly criticised the US government’s response to the collapse of the subprime lending market, saying there had been “zero” effort to tackle the crisis.
“In terms of tangible effort from the federal government...there has been no programme, no federal effort, no legislative assistance – zero,” he said.
He criticised the US government’s refusal to lift caps on the size of loans that can be bought by Fannie Mae and Freddie Mac, the government-sponsored entities created to promote affordable housing.
Fannie Mae and Freddie Mac are prohibited from buying loans worth more than $417,000. Failure to increase this limit would continue to depress the property market and keep first-time buyers out of the housing market, particularly in California, where property is expensive, said Mr Mozilo.
“First-time buyers cannot buy a home now. Only the wealthy and privileged can afford to buy homes,” he said.
Mr Mozilo’s stock sales are being probed by the Securities and Exchange Commission as part of an examination of trading by executives at subprime lenders. He has sold more than $130m worth of Countrywide shares since beginning a stock-sale plan at the end of last year.
Quan Zhu, a former Countrywide vice-president, agreed to pay $108,840 to settle insider trading charges filed against him by the SEC, without admitting or denying the allegation, the commission said yesterday in a statement.
The SEC alleged that Mr Zhu traded in Countrywide stock “while aware of confidential negative earnings information”.
Speaking at the Milken Institute’s State of the State conference in Beverly Hills, Mr Mozilo blamed the subprime crisis on “easy, low-cost money” that drove up house prices and “exotic loans and diminished underwriting standards”.
“People stretched themselves,” he said, though he implied that the blame for the crisis should be shared.
“It takes a village to do this. As long as [house] values keep falling, the subprime situation will get worse.”
Jeff Mezger, chief executive of KB Home, said house prices would remain depressed. “We’re anticipating that it’s going to stay tough for quite some time.”
Countrywide, the largest US mortgage lender, last week announced a $1.2bn third-quarter loss, reflecting $2.9bn of mortgage-related writedowns, credit losses and restructuring charges.
But shares in the California-based lender rose sharply after it said it would return to profitability this quarter.
You, sir, are sounding like an idiot extraordinaire.
Why in the h*ll do you think the government ought to bail your butt?
It’s fun watching liberals whine.
What does he think he is - a farmer?
Don’t tell me the government is actually letting the market deal with the situation.
zero effort=bail out
What is it about California that makes their property values so much higher than the rest of America?
And why should the rest of us care about bailing out people who are stupid enough to pay those inflated prices to live in a congested desert fault zone, subject to brush fires and landslides?
Now THAT is a truly scary thought.
For those idiots.
“In terms of tangible effort from the federal government...there has been no programme, no federal effort, no legislative assistance – zero,” he said.”
Good.
Would someone explain that to me? I don't get it.
This scumbag Mozilo - - the same scumbag who happily cashed his substantial paychecks while his company was raking in the dough making risky loans to bums - - now wants the taxpayers to save his fat rear end? Drop dead, Mozilo.
LOL
Nothing at all. It all sucks. Stay home. We're full.
This mortage scandal is without doubt the boldest and most expensive SWINDLE in the history of the world. The government should be putting tens of thousands in JAIL not billions in BAILOUT.
I agree that the Government needs to do much more about the subprime mess.
Step #1: arrest and convict Mozillo.
You’ve got to love him speaking to the ‘Milken Institute’.
Subprime loans are usually low (or no) downpayment loans to bums. Once a loan balance exceeds the value of a home, the bum figures, "Why bother?" And then the bum waves goodbye to the house and basically says to the bank, "Enjoy your new house." Because he's a bum.
As values fall, more and more bums take their cue.
“Stay home. We’re full.”
No problemo.
Tough to refinance a $ 500 000 house with a $ 450 000 mortgage when the price of the home drops to $ 400 000 in value. Value of the home is smaller than the loan amount. The $ 450 000 mortgage note held by the lender could not be bundled and sold to a re mortgage company because they cannot come up with a discount price for the mortgage. If the lender cannot sell off his mortgage notes, he cannot go to the bank to borrow more money to lend to new home buyers. The cash flow starts to freeze up, making the money available to new homebuyers, carbuyers and business to borrow. Economy starts to gum up.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.