Angelo Mozilo's Straight Talk Kills His Stock, but Gives Reality

Angelo Mozilo is a straight shooter and he isn't trying to put a pretty picture on the nation's housing problems.

Angelo Mozilo, the CEO of Countrywide, held a 3 hour conference call today following the mortgage lender's earnings release.  I listened to some excepts.  Mozilo didn't hold back.  He said that the housing market is worse than at any time in history, with the possible except of the Great Depression.  Particularly concerning according to Mozilo is a measurable rise in delinquencies on home equity loans, lines of credit and second mortgages to homeowners with good, or prime, credit.  Mozilo furthered that there has yet to be any defaults caused by the resetting of adjustable rate mortgages to higher interest rates.  “So far what we have seen in delinquency are not resets at all,” Mr. Mozilo said.  A friend who is a senior executive at Countrywide told me confidentially that Mozilo wants us to stop talking about the housing collapse in past tense and to understand that we are just at just at the tip of the iceberg.

Ari Socolow
Ari Socolow: Ari Socolow is the Chief Economist and Editor-in-Chief at BestCashCow. He is particularly interested in issues relating to financial literacy and bank transparency. Since co-founding this website in 2005, Ari has been frequently cited in the media as an expert on local and national savings accounts, CD products, mortgage and loan products and credit card rewards products.

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Comments

  • Anonymous

    July 25, 2007

    I think the worst is over. The economy is strengthening and the jobs picture is good. Unless people are thrown out of work they are going to retain their homes. The market won't be as good as it was, but it's a lot of hype to think it's going to crash.

  • Anonymous

    July 25, 2007

    I am not sure that the guy is such a straight shooter. This is the same guy who just a few months ago said that Countrywide would be able to benefit the flushing out of the week players. Now, he is all red-faced.

  • Anonymous

    July 25, 2007

    Real estate values prices everywhere are twice what they were six years ago. The Depression analogy is unwarranted.

  • Anonymous

    July 27, 2007

    Subprime is just a term for predatory lending that is forced on the truly very poor. There are plenty of other people who cannot support the payments for the homes that they buy and Mozilo and his friends have put these people in houses that they could never afford. They sit there are say that it is the American dream. When the dream turns sour, they then shrug their shoulders and lose money for shareholders. Very nice.

  • Dont believe the hype

    August 17, 2007

    the

  • DONT BELIVE THE HYPE

    August 17, 2007

    DONT BELIVE THE HYPE

  • iKnOwThEtRuTh

    August 23, 2007

    The American economy is going to crash. There will be total turmoil and mayhem. The Great Depression of 2008 will arrive. Be prepared. Homes will be worth dollars, gas will be $15 a gallon, Fortune 500 companies will all go bankrupt! Move to another country! Save yourself!

  • francisco pizar

    February 06, 2008

    real estate business vill not crash.Homes purchased for a sound reason and by people who invested for a long term will continue on maintaining/increasing value. The speculators, those investors who borrowed money to purchase real estate thinking that they could flip the units within a few months and make money,well, those investors and the banks will hit the wall and will crash. Fortunately we have more people who invested in real estate for a good reason and who are able to enjoy their home while waiting for a good market to see and enjoy the appreciation of their investment.Stop on generalizing the market as a terrible market just because you see a few rotten apples.

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