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Countrywide Fraud Case Settled for $67.5 Million

October 23, 2010

Angelo Mozilo, the former CEO of Countrywide Financial, has agreed to pay a sum of $67.5 million dollars as a fine for shortchanging investors of Countrywide’s loans while making record profits himself.  However, he never admitted to any wrong-doing.  Countrywide is one of the companies that is most responsible for the downfall of our economy.  These were the guys that were giving out loans to ANYONE…and what did they care, they really weren’t lending their own money.  Countrywide would take the loans they made, package them into securities known as MBS (mortgage backed securities), and sell them off to investors.  This is where the you-know-what hit the fan…when these bad loans started to default en masse, the investors that purchased these packaged loans had nowhere to turn.  These loans should never have been given out in the first place, but they were, and everyone else was left holding the bag…all the while Mozilo was getting PAID.  Well, Countrywide is no longer a company, it was absorbed by Bank of America who added a whole lot of headaches when they took on Countrywide.  Here is the sad thing about this settlement: very little if any of the money is coming out of Mozilo’s pocket…mostly it is paid out of a “slush fund” that Countrywide set up for just such an occasion.  Come on now!

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