Federal authorities have announced their securities fraud lawsuit against former Countrywide Financial Corp. CEO Angelo Mozilo, the Los Angeles Times reported June 5. The move was expected; Mozilo is also being investigated on criminal charges for insider trading by the FBI and a grand jury in Los Angeles. He is accused of misrepresenting Countrywide's financial health to the public, even as he privately sold off his company stock and told associates within the company that its loans were "toxic" and "poison." Lawyers for Mozilo and two associates, David Sambol and Eric Sieracki, said the allegations were baseless and politically motivated.
Countrywide's stock was valued at $45.03 a share in February of 2007, near the height of the housing bubble. By the end of that year, it was worth just $9 a share; when Bank of America purchased the company in 2008, it was trading at $4.25. Mozilo is accused of making and changing stock-selling plans throughout 2006 and once in early 2007, allegedly to dump shares he knew would soon plummet in value. During this time, the SEC says, Countrywide misled investors into believing that it was writing substantially less risky loans than it did. The "smoking gun" cited in the SEC's complaint was a statement Mozilo made in an email sent in April of 2006, saying "In all my years in the business I have never seen a more toxic product." The specific product he meant was a loan to borrowers with bad credit, requiring no money down. He went on to say "Frankly, I consider that product line to be the poison of ours."
The lawsuit does not allege that Mozilo committed mortgage fraud or predatory lending. However, both practices are widely believed to be responsible for Countrywide's downfall. Countrywide was one of the first mortgage lending companies to fall when the housing market went south; its emphasis on subprime and option ARM mortgages has already become the basis of a predatory lending lawsuit by state attorneys general, including California's own Jerry Brown. As Anaheim loan modification attorneys, we have learned to look very closely at mortgages issued by Countrywide (and now owned by Bank of America). While some of them must be aboveboard and legitimate, we have found that many more originated with misleading statements, manipulation or outright lies by loan issuers and other players in the mortgage lending chain.
Howard Law LLP can use evidence of these tactics to help Southern California homeowners who face default and foreclosure negotiate loan modifications. Even if your mortgage is held by a lender other than Bank of America/Countrywide, will scrutinize your loan and its history carefully, looking for indications of impropriety as well as other ways to convince a bank to grant you a sustainable loan modification. Banks listen to our San Marcos mortgage loan modification lawyers because we are attorneys -- meaning that we can and will sue banks for violating our clients' rights. We have successfully argued for changes to loan structures, lowered interest rates and other changes to loans that help keep families in their homes. Our goal is always to leave you with a lowered, more realistic monthly payment.
If you're facing default or foreclosure and you can't get through to your bank, Howard Law can help. To set up a free, confidential consultation with our Santa Clarita mortgage loan modification lawyers, please call us toll-free at 1-800-872-5925 today or contact us online.