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Angelo Mozilo Continues To Haunt Bank Of America

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Angelo Mozilo, June 26, 2008: "Bank of America will reap the benefits of what we have sowed.”

Chris Kotowski, January 24, 2011:

Bank of America may book an $8.5 billion charge on costs to resolve disputes over faulty mortgages, a figure at the upper end of the range the company gave last week, according to Oppenheimer & Co. The cost to settle demands from private investors on home loans could be as low as zero and the upper end is $7 billion to $10 billion, the firm said last week in a slide show. The bank may take a charge in this year’s fourth quarter, and costs may expand with lawyers “smelling blood in the water,” Christopher Kotowski, an Oppenheimer analyst, said yesterday in a note. “Were it not for Countrywide and the private-label put- back issue, we would be recommending the stock,” Kotowski said.

BofA Putbacks May Cost $8.5 Billion [Bloomberg]

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In June 2008, Countrywide founder and CEO Angelo Mozilo stood before a group of CFC shareholders and, through salty tears, told them that Bank of America would "reap the benefits of what we have sowed." He wasn't kidding, and in the 4+ years since Ken Lewis paid $4 billion for the place, BofA has had the pleasure of ponying up an additional $40 billion (and counting) in write-downs and legal fees associated with cleaning up Countrywide's messes, while CEO Brian Moynihan has publicly described the acquisition as an albatross around his neck. Additionally, Ang Moz forked over $67.5 million in 2010 to "resolve SEC claims that he misled investors," and separately, there has been talk by some that Countrywide contributed in no small way to the worst financial crisis since the Great Depression. In light of all that, does Ang Moz, have any regrets about the way his company was run? Not a fucking one and if he had to do it all over? He wouldn't change a thing.

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Countrywide is both an albatross and a boon for Brian Moynihan. Sure, it's the reason for all of Bank of America's troubles, but it's also really convenient to have such a reason.

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Bank Of America Still "Reaping The Benefits Of What Countrywide Hath Sowed"