Angelo Mozilo, Former CEO of Pasadena Savings Firm Some Say Triggered 2008 Financial Crisis Across U.S., Dies at 84

Angelo Mozilo, the former CEO of Countrywide Savings in Pasadena, the man who the New Yorker called “the face of the financial crisis of 2008”, died at the age of 84 in Santa Barbara this week. 

A statement by his family’s foundation said he died of natural causes. 

Mozilo was one of several former executives charged by the Securities and Exchange Commission with defrauding investors by hiding the risks of the company’s mortgages. 

He agreed to pay $67.5 million to the SEC in 2010 to settle fraud charges. It was reportedly the largest settlement by an individual or executive related to the 2008 housing collapse. Reports said he paid less than the agreed amount because of an indemnification agreement that was part of Mozilo’s employment contract.

Mozilo also accepted a lifetime ban from serving as an officer or director of any public company.

In February 2011, federal prosecutors in Los Angeles dropped their criminal investigation into the facts behind the civil settlement.

Mozilo was born in New York City in 1938, the son of a Bronx butcher. He received a Bachelor of Science degree from Fordham University in 1960. In 1969, he and his former mentor David S. Loeb founded Countrywide Credit Industries in New York. 

The company moved its headquarters to Pasadena in 1974, the move primarily motivated by a desire to capitalize on the booming California real estate market at the time. 

Southern California, in particular, was experiencing significant growth and demand for housing, making it an attractive location for a mortgage lender like Countrywide. By relocating to Pasadena, Countrywide aimed to position itself closer to its target market, expanding its business opportunities and establishing a stronger presence in the growing California housing market. 

For years the Countrywide signage appeared across its headquarters building on North Lake Avenue.

The move also allowed Countrywide to benefit from California’s favorable business environment, with various tax incentives and regulatory advantages. The company saw it could tap into a larger pool of potential customers and establish closer relationships with key industry stakeholders, such as real estate agents and homebuilders.

The firm saw significant success, originating $461 billion worth of loans in 2006, including $41 billion in subprime loans, which later contributed to the global financial crisis.

In 2008, amid the crisis, Bank of America acquired Countrywide Financial for $2.5 billion, significantly less than its value in early 2007.

Despite facing accusations of being a key architect of the 2007-2009 financial crisis, Mozilo had consistently defended himself against such claims, stating that he was wrongly blamed for the crisis.

Countrywide Financial’s success and aggressive growth had come to a halt as the company faced challenges and layoffs amid rising interest rates, leading to a decline in mortgage loan demand and refinancing activities.

Mozilo was once regarded as one of the best chief executives in the U.S. but was later ranked as the second worst U.S. chief executive of all time by Conde Nast’s Portfolio magazine due to the subprime mortgage crisis.