Written by Craig D. Robins, Esq.
Countrywide fueled this country’s sub-prime mortgage housing collapse. Now its former CEO is being sued by the SEC for fraud
Angelo Mozilo, who is one of the biggest names responsible for the irresponsible lending practices that led to the sub-prime mortgage meltdown, is now the target of an SEC lawsuit for fraud and insider trading.
The SEC held a news conference in Washington today to discuss claims that Mozilo failed to inform Countrywide shareholders just how lax lending standards became at the mortgage giant as the housing boom neared its collapse. The SEC also is scrutinizing Mozilo’s sale of hundreds of millions of dollars in stock as defaults mounted on the high-risk loans in which Countrywide had specialized.
I have written extensively that Countrywide also had the reputation of being the poster child of bad boy frivolous litigation practices in bankruptcy courts across the country. See Major Mortgagee in Trouble Again with Bankruptcy Court .