Ex-Countrywide CEO warns of major housing clampdown
“I’d say that there’s still issues — serious issues in the country particularly as it relates to housing, said former Countrywide CEO Angelo Mozilo, to FOX Business’ Liz Claman during an interview at the SALT conference on Wednesday.
Mozilo, 80-years-old, ran the world’s largest mortgage provider, and is now defending his role in the subprime mortgage crisis.
“You’re here at this conference,” said Claman. “People haven’t seen you in 11 years, certainly on television. Why are you sitting here with me?”
“I was asked to come to this conference and I think turning 80 had a big effect on me. You know, I’m running out of runway. And I thought well now’s the time to speak out and I don’t have any inhibitions anymore,” Mozilo replied.
In time the U.S. economy crawled back, but the housing market, where Mozilo spent his entire career, is backpedaling.
“It’s a very important part of the economy, but it’s also a very important part of people’s lives and their children’s lives,” he said. “And since the crisis, things have clamped down again.”
Access to housing, especially for minorities, he said, is tight.
“African-Americans, Hispanics — still very difficult for them to get a home of their own even though they could afford it,” he said. “They can’t get over all the barriers that are in their way because the barriers don’t fit their lifestyle. But those barriers have to be taken down.”
For the Hispanic community, language is part of the problem, he said. And African-Americans also have different lifestyles, particularly at the lower end.
“Barriers to qualify for a mortgage, the underwriting requirements, just don’t fit the lives of minorities,” he said, and he pointed out the housing economy may be missing out.
“Fannie Mae had a survey some years ago that clearly pointed out the African-Americans and Hispanics have a higher desire for housing than do whites. Whites considered, you know, that’s their part of living in America you’re entitled to.”
But make no mistake about it, Mozilo wants people to know it was Countrywide’s duty to “lower the barriers of entry for everybody in America getting a home, as long as they could afford it.”
Mozilo also believes that he and the bank became an “easy target” during the crisis because of their size and also for making these loans, which he alleges only accounted for 3 percent of business.
“This is a huge economy — the whole world economy,” he said. “If you take all the assets of the world and you put a price on it and you value one and you take the amount of subprime mortgages in the United States — it’s a pebble in an ocean — it’s ridiculous.”
“People who want to discriminate said, ‘Look, we told you if you don’t make these loans you’re going to have a crisis.’ Nonsense, absolutely nonsense. They had nothing to do with it.”