A Sacramento mortgage lender's vision

Yesterday, the Securities and Exchange commission (SEC) finally levied formal charges against former CEO Angelo Mozillo, former Chief Operating Officer David Sambol and former Chief Financial Officer Eric Sieracki of Countrywide Financial Corp. The charges stem from actions during 2005-2007 and allege that these officers mislead investors about the credit risks the company took to increase its market share. Gee, really? The real meat of the allegations is a charge of falsely assurance to investors that Countrywide was primarily a prime-quality mortgage lender that had avoided underwriting risky loans.

In reality, during 2004-2007 Countrywide, (or rather it's subprime division's alias, Full Spectrum Lending) was one of the largest players in the market for risky loans. Flush with available credit and eyeing strong demand for any type of mortgage securities, Countrywide made billions of dollars in loans with reduced or no income/asset documentation to people with low credit scores. In fact, they were considered to be one of the most aggressive lenders for these products at the time, really pushing guidelines and rates in an attempt to corner the market.

Well it worked, but the ugly truth was that these loans were made on an expectation that home prices would continue skyrocketing. Laced with huge prepayment penalties and steep rate increases, these loans would have been enormously profitable- considering that at the time, the average American homeowner refinanced every 1.5 years. But as we all know, the market ran out of gas in 2006 and all the subprime loans on Countrywide's books shortly ran the company into the ground, forcing a desperation merger with Bank of America Corporation.

In closing, why should the payment for bad subprime loans stop just with three former executives? If you are a victim of one of these bad loans, you should contact us to see about your options.