Defending Mozilo

Lori Mozilo says her brother Angelo is a swell egg who has been vilified by publicity seeking politicians and uninformed reporters. She had her chance on Huffington Post to set the record straight (HT to LA Land), though her outrage takes up much of the piece (she really has it in for Rep. Henry Waxman, who held hearings on the role of Countywide and other lenders in the mortgage crisis). No question that Mozilo, recently departed as CEO of Countrywide, became an easy mark, and no doubt there have been inaccurate reports, innuendos, assumptions, etc. Much of the outrage stems from an oversized compensation package that allowed him to liquidate big portions of his Countrywide holdings just as the stock was starting to slide - and just as the mortgage mess was taking hold. Mozilo's explanations only infuriated his critics - he told CNBC earlier this year that he needed part of the money to send his grandkids to college. But Lori claims, without much explanation, that "he was on a payment schedule determined by the SEC itself, and he always sold within predetermined pay periods; to do otherwise would have been against the law." (This doesn't make much sense, considering that his trading activity is currently under investigation by the feds.) We also learn in the piece that he's a champion of equal rights and a big believer in the American Dream of home ownership. Here's more:

When I was a kid, my brother explained to me why he was in the mortgage banking business. He believed that home ownership was a pillar to building neighborhoods, communities, and ultimately, a strong country. He explained that people care about their sidewalks, their schools, their neighborhoods, and their neighbors when their personal finances are tied to them. He believes in home ownership as a literal shareholding in our mutual destinies (my words, not his). He was ambitious and smart, but he was also idealistic. He believed every American could one day own a home and be a part of the shared experiment called America. I admire my brother. He's tough, a big thinker, and the staunchest believer in the American dream I have ever met.

[CUT]

Americans have a funny relationship with their wealthiest citizens, a love-hate dynamic that Mr. Waxman knew he could exploit to great effect in the midst of our current economic downturn. The subtext of these hearings was: "Look, it's okay to be successful, but not too successful." Politicians have no problem with the super-rich when they are soliciting them for campaign funds, or honoring them for their contributions to charitable organizations, or consulting them for advice on matters of public policy, but they will sell them down the river in a heartbeat for a few hours of quality time with a TV camera.

There is some truth to the above. The super-rich are indeed scorned, and Mozilo encapsulated all the stereotypes with an imperious swagger that was easy to hate. But here's the real problem with any Mozilo defense: The guy oversaw a company that became an unrelenting - and unregulated - mortgage-making machine. And it would appear, at least based on the litigation being filed, that more than a few Countrywide folks stepped over the ethical and perhaps legal boundaries. Angelo ran the place, he made the rules. And then he let things get way out of hand. Now, he's walking away with hundreds of millions of dollars, while many of his customers - misguided or perhaps even swindled - are walking away without a house and without much of a credit standing. That's why people are pissed, Lori. And there's just not much you can say to that.