Countrywide’s Mozilo may face lawsuit over subprime mortgages
This time prosecutors have a new weapon
Although Countrywide Financial no longer exists, co-founder Angelo Mozilo is not in the clear as prosecutors attempt to still hold him responsible for the company’s role in the U.S. housing bubble, an article in Bloomberg stated.
And he is not alone. According to the article, more than 12 months after the deadline passed to file criminal charges, U.S. attorneys in Los Angeles are preparing a civil lawsuit against Mozilo and as many as 10 other former Countrywide employees.
But this time, the article said the government is going with a different tactic, using a 25-year-old law that has helped the Justice Department win billions of dollars from Wall Street banks.
Until now, the harshest penalty imposed on Mozilo, 75, has been a $67.5 million accord with the U.S. Securities and Exchange Commission from 2010 to resolve allegations that he misled Countrywide investors.
Mozilo said he has “no regrets” about how he ran Countrywide, according to a June 2011 deposition he gave in a lawsuit between the mortgage lender and bond insurer MBIA Inc.
Meanwhile, Bank of America (BAC), which acquired Countrywide, reportedly reached a $17 billion agreement with the DOJ to resolve claims over the toxic residential mortgage-backed securities the lender issued prior to the financial crisis. And the toxic loans in question actually date back to Countrywide.
BofA does not have a comment as of press time.