FLASH: Angelo Mozilo's crimes are now BofA's problem as brain-dead CEO Ken Lewis completes deal for Countrywide Toxic Mortgage

Hi, BofA shareholders, I'd like you to meet Angelo and his corrupt posse at Countrywide Toxic Mortgage - your problem now!

Every state in the US has either filed a lawsuit against your new friends or is preparing to do so. The civil and criminal lawsuits will take years and years to sort out. You'll end up losing billions and billions more on this deal, and the Countrywide brand you bought is probably more worthless than Enron at this point.

But what the hey, a deal's a deal, and you own 'em now.

And BofA CEO Ken Lewis, who might not last the summer, is now a strong nominee for "Stupidest CEO in the World". He may think he can pawn off Countrywide's mess on the taxpayers, and thanks to Angelo's bribery he may well do that, but he won't be able to stop the lawsuits. No, he won't be able to stop the lawsuits.

Bank of America completes buy of Countrywide

Bank of America Corp. has completed its acquisition of mortgage lender Countrywide Financial Corp., making BofA the country's largest mortgage lender.

Under the agreement, Countrywide shareholders received 0.1822 share of Bank of America stock in exchange for each share of Calabasas, Calif.-based Countrywide (NYSE: CFC).

When the deal was announced Jan. 11, it was valued at around $4 billion. However, Bank of America's stock price has since declined from $38.50 per share to Monday's closing price of $23.87 per share. Based on that drop, Bank of America paid about $2.5 billion for Countrywide.

Last week, Charlotte, N.C.-based Bank of America (NYSE: BAC) announced it would cut 7,500 jobs as part of its acquisition of Countrywide.

[UPDATE] FLASH: COUNTRYWIDE FRIED - ILLINOIS AND CALIFORNIA FILE LAWSUITS AGAINST MOZILO AND COUNTRYWIDE, WASHINGTON STATE TO PULL LICENSE

"Countrywide's conduct has contributed to the high number of foreclosures in Illinois and caused significant harm to the public, the market, and scores of Illinois borrowers and homeowners"

- The State of Illinois, from their civil lawsuit announced today against Countrywide Toxic Mortgage and Angelo Mozilo

(Meanwhile, screwed Countrywide shareholders vote on unloading this cancer to BofA later today...)

[UPDATE - CALIFORNIA JUST FILED THEIR LAWSUIT AGAINST COUNTRYWIDE JUST NOW. TWO STATES NOW IN, 48 TO GO. AND THE NOOSE TIGHTENS...]

[UPATE 2] - WASHINGTON STATE TO FINE COUNTRYWIDE AND ALSO PULL THEIR LICENSE

[UPDATE 3] - DESPERATE COUNTRYWIDE SHAREHOLDERS, HAVING LOST ALMOST EVERYTHING THANKS TO INSIDER-TRADING MOZILO, APPROVE FIRE SALE TO BANK OF AMERICA. BUT B0fA MOST LIKELY GOING TO WALK AWAY FROM THIS CANCER. NO, MAKE THAT RUN AWAY.

[UPDATE 4] - ANYONE SEEN ANGELO? LAST I HEARD THERE WAS AN ORANGE MAN IN A WHITE FORD BRONCO ON THE WAY TO MEXICO.

FLASH: FBI probing 14 un-named companies for mortgage fraud, insider trading and improper lending

First question - WHAT THE F*CK TOOK SO LONG?

Second question - WHAT THE F*CK TOOK SO LONG?

Man, I hope someone there reads HP. And ML-Implode too. It's all here. FROG MARCHES!! WE WANT FROG MARCHES!

Let's guess the 14 companies. Here's my list

1) Countrywide (of course)
2) IndyMac
3) First Federal
4) Wells Fargo
5) WaMu
6) CIT Group
7) Citigroup
8) Merrill Lynch
9) KB Home
10) Toll Brothers
11) Hovnanian
12) Fannie Mae
13) Freddie Mac
14) Bear Stearns

Man, it's tough to get it down to 14. Didn't even have room for MBIA and Ambac.

Thanks HP'ers for the link.

WASHINGTON (Reuters) - The FBI has opened investigations into 14 corporations as part of a crackdown on improper subprime lending, agency officials said on Tuesday.

FBI officials told reporters the probes involved potential violations including accounting fraud and insider trading.

They did not identify the companies, but said the probes reached across the industry to include developers, subprime lenders, companies that securitized loans and investment banks that held them.

The cases could lead to potential civil or criminal charges, the officials said.

The FBI said it was investigating the cases with the U.S. Securities and Exchange Commission, which has opened about three dozen investigations into the subprime market collapse.

So why hasn't Countrywide Toxic Mortgage gone bankrupt yet? Simple. They conned the monkeys at the FHLB into lending them $50 billion plus

Right before banks fail you usually see them go to the central bank or the government as their "lender of last resort". And then they fail anyway. Just look at the Northern Rock mess in the UK for the perfect example, a failed bank which will now be nationalized (and the taxpayers of course get screwed).

Countrywide Toxic Mortgage, a corrupt institution which will fail in the end, has been looting the Federal Home Loan Bank, using it as its "personal ATM", potentially robbing taxpayers of over $50,000,000,000 so far and counting.

Taxpayers!? How could that be? Well, because when the FHLB fails, who do you think will fund their bailout? You got it. Us.

So how is Angelo Mozilo and his gang of thieves doing this? Simple. They've conned the FHLB into giving them all those billions by putting up mortgages as collateral.

Yes, if it wasn't so funny it'd be sad. They're putting up their toxic mortgages as collateral, and the FHLB is taking them.

The FHLB is either too corrupt or too stupid to know that there's a housing crash underway in the US, and that the crap that Countrywide has on their books is nowhere near worth what Angelo says its worth.

It's one big house of cards HP'ers. And when it all caves in, and the media is all a-twitter, asking "how did this happen"? and "nobody saw this coming", well, once again, it was all just so obvious (for HP'ers).

What stops this madness? When someone in DC finally realizes that the FHLB is being had, tells them that taxpayers will NOT bail them out, and they finally cut Countrywide and Mozilo off.

And then things will get interesting.

Sen. Charles Schumer, a New York Democrat and member of the Senate Banking Committee, accused Countrywide on Monday of treating the FHLB system "like its personal ATM," having borrowed $51.1 billion as of Sept 30.

He said that, as Countrywide's mortgage portfolio deteriorates, the FHLB exposure "poses an unreasonable risk."

Yet Bigelow said "we are very familiar with FHLB collateral requirements, and we are in full compliance ... The FHLB has some experience in risk management, and they probably have some idea what they're doing in terms of their lending activities."

FLASH: Mortgage CDOs seen as being worth just pennies on the dollar

I seriously can't believe what I'm reading.

The collapse of banks, lenders, financial institutions and hedge funds worldwide is coming.

Everyone head to the shelter, and don't come out for a few months or years. What we're about to witness in 2008 your children's children's children will still be studying.

Markets can stay irrational much longer than you think they can, but at one point... "Mark to Market" anyone? Auditors anyone? This is surreal. Untold billions have already been lost (but not taken) and trillions more are to come.

Wow. If you're not scared now, you will be in a few seconds.

Top CDO Classes May Lose 80 Percent, Barclays Says

Dec. 6 (Bloomberg) -- U.S. mortgage assets in collateralized debt obligations have lost so much value that the top classes of the securities may be worth as little as 20 cents on the dollar in a liquidation, Barclays Plc analysts said in a report.

Initially assigned low investment-grade ratings, about 20 percent to 30 percent of principal would be covered for the ``super senior'' portions of mezzanine asset-backed bond CDOs, which mainly contain mortgage bonds and other CDOs, Barclays said in the report yesterday.

The senior-most classes of CDOs containing highly rated asset-backed bonds would recoup 30 percent to 65 percent, it said.

Washington politicians thought intervening in the Terri Schiavo affair would be good politics too. Housing Gambler Bailout is the new Terri Schiavo.

This will blow up in their face something hard, something fierce and something memorable. I can't wait to see the polling data, media coverage, lawsuits, investor rejection and unintended consequences.

The 99% of Americans not given a free lunch, the 99% of Americans who did not commit mortgage fraud, who did not "buy" a home they couldn't afford, and who did think signed contracts meant something in the United States, those 99% are going to be ABSOLUTELY F*CKING PISSED OFF today when Bush and Paulson waddle out to announce a Housing Gambler Bailout Plan.

What to do?

1) Submit to your local paper's letter to the editor section

2) Contact your Congressman and Senator

3) Send a friendly little note to the White House

4) If you're a homedebtor with an ARM, stop making payments today, then call your lender and let them know you want a break too. If they don't give it to you, threaten a discrimination lawsuit.

Here's the Washington Post article where we got HP'er Darren interviewed (nice job!), and also some more MSM coverage this morning:

Bush Wins Agreement To Freeze Mortgages

Darren McKinney, 48, a renter in the District, said he has been waiting for housing prices to fall so he can buy a condo without resorting to a dubious loan. He turned down an opportunity to buy his 600-square-foot apartment for $310,000 in late 2004 because he thought it was "absurdly overpriced."

Now the government is rewarding people who made irresponsible decisions and bought homes beyond their means, he said.

"There are those of us who purposely sat on the sidelines during the course of the last three years while the senseless frenzy was going on, and we presumed the free market would be allowed to correct itself," McKinney said. "The government is now meddling in the market and looking to prop up lenders and borrowers alike, and those of us who wisely bided our time get screwed."

Sub-prime bailout helps the greedy
THE chameleons of the free market never cease to amaze. When things are good they worship at the altar of deregulation. When the market turns bad, they squeal like stuck pigs and are first in line for a government leg-up.

Subprime Mortgage Bailout - Paulson Vs the Free Market

No bailout
With nearly $400 billion in adjustable-rate subprime mortgages scheduled to experience significant increases in their interest rates next year, Treasury Secretary Hank Paulson has outlined the possible terms of an ill-advised election-year taxpayer bailout for an indeterminate number of distressed homeowners and the investors who hold the homeowners' deteriorating subprime mortgages in their asset portfolios.

Mortgage relief plan draws fire

Some say proposal to aid subprime borrowers is a bailout; others say it doesn't do enough

It's time for the housing crash and mortgage meltdown ENRON moment. Who's it gonna be?

Countrywide? KB Home? Washington Mutual? Fannie Mae? Someone's about to go belly up. Someone big. And then after that, someone else will. And someone else will. And someone else will.

Accounting scandal, SEC investigation, bankruptcy filing, massive write-down, share price collapse, big news on CNBC, panicked investors. Who's gonna be first?

It's not a matter of if. It's a matter of when, and who. The table has been set. Who's coming to dinner? The answer(s) may shock you.

Countrywide Financial denies it's bankrupt

Countrywide Financial Corp., the nation's largest mortgage lender, sought to reassure investors Tuesday, declaring it has ample capital, access to cash and is well-positioned to benefit from the financial turmoil rocking the mortgage sector.

The company's statement came amid rumors the company, based in Calabasas, Calif., could be looking to seek bankruptcy protection and as its stock tumbled, at one point down more than 15 percent. Countrywide shares fell 29 cents, or 2.7 percent, to close at $10.28. At one point, the stock had dropped to a low of $8.21. Over the past 52 weeks, the stock price has been as high as $45.26.

Countrywide Toxic Mortgage - We lend money to people who have absolutely no chance of ever paying it back!

Knowing what we know now, this Countrywide TV commercial should explain everything.

Will Countrywide Toxic Mortgage's Angelo Mozilo resign tomorrow after announcing horrific results and more layoffs?

I think so.

Here's the internal memo from yesterday Angelo sent to soon-to-be-former Countrywide employees.

Message from the CEO

Message to all employees from Angelo Mozilo, Chairman and CEO.

There is no question that all of us at Countrywide and all those involved in the financial services industry have been impacted by this unprecedented world wide credit crisis. Over the past 40 years, since the founding of our Company, there have been many global and domestic events that challenged the will, the tenacity, the strength and the character of the Countrywide family. Each and every time we have risen to the occasion and, in fact, we have led not only our Company but also the industry through many periods of crisis.

During this time, I have received many kind messages from employees throughout the country. I want to take this opportunity to thank all of those who have expressed their support for me personally, and to convey my deepest appreciation for all members of the Countrywide family who continue to work very hard and who have made tremendous sacrifices on behalf of our Company. I would also like to recognize Dave Sambol and the entire team who have worked tirelessly for the past several months in managing the many and varied challenges that have arisen as the result of the disruption in the credit markets.

Again, thank you for your continuing dedication to Countrywide. I commit to each and every one of you that I will do everything in my power to make certain that our management team utilizes all of its resources as we migrate through to a new and different chapter in the history of our Company and in our industry.

My only questions - who the hell is sending Angelo kind messages? Two words - suck ups. And if management is utilizing all its resources, does that mean that they'll take their hundreds of millions of dollars in ill-gotten gains from insider trading and use them to repurchase shares or contribute to an employee assistance program? Yeah, didn't think so.

Angelo Mozilo is KenLay. Angelo Mozilo is Bernie Ebbers. And Angelo Mozilo will come to represent the greed and corruption of the Late Great Housing Ponzi Scheme.

FLASH: Angelo Mozilo, CEO of Countrywide Toxic Mortgage, under SEC investigation for insider stock trading

Finally.

One step closer to jail for The Orange One.

One step closer to Enron and Worldcom for Countrywide.

My only question is - what took so long? This guy pumped up his earnings and stock by putting homedebtors into higher-commission toxic loans when they could have qualified for standard mortgages, then he had Countrywide do stock buybacks when he was dumping shares as fast as he could based on inside knowledge of their impending collapse.

Angelo Mozilo is a liar, a conman, a thief and the physical representation of unregulated greed run amok during the housing bubble and crash.

(yup, still short CFC via Oct puts)

SEC Probes Countrywide CEO's Stock Sales

SEC Reportedly Examining the Stock Sales of Countrywide Financial CEO Angelo R. Mozilo

WASHINGTON (AP) -- The Securities and Exchange Commission is examining stock sales of the chief executive of Countrywide Financial Corp., the nation's largest mortgage lender, a person familiar with the matter said Wednesday.

The informal SEC inquiry of stock sales by CEO Angelo R. Mozilo has been under way for a while, the person said, speaking on condition of anonymity because the probe has not been made public.

State Treasurer Richard Moore, the trustee of a pension fund that holds about 500,000 shares of Countrywide stock worth about $8.6 million, said in a letter to SEC Chairman Christopher Cox that he was "shocked" to learn that Mozilo "apparently manipulated his trading plans to cash in" as the crisis involving high-risk mortgages was heating up.

"As one of many investors who have felt the painful losses in Countrywide stock, I am outraged at his manipulation of the system and this abuse of shareholders," wrote Moore, a Democrat who is running for governor. "The timing of these sales and the changes to the trading plans raise serious questions about whether this is mere coincidence."

Word of the SEC's inquiry "is good news for investors and sends a clear message that the questions raised are serious," Moore said in an e-mailed statement Wednesday.

Angelo Mozilo has sold $355,658,743 in Countrywide Mortgage stock, selling even as Countrywide was buying shares on the open market. Hmmmmm......

The worst part of Angelo's insider dumping is that while he was dumping, as CEO he directed the company to (get this) BUY CFC shares on the open market to keep the price propped up, under the guise that it was "in the best interest of shareholders" to buy back shares (using debt).

Uh, Angelo, bad news, but buying CFC shares on the open market was THE SINGLE WORST THING YOU COULD HAVE DONE FOR SHAREHOLDERS.

From the July 28 CFC call after being questioned on dumping while CFC was buying:

Angelo Mozilo: Yes, well, if you think like that it's -- I don't think like that. The buybacks were done because we thought it was in the best interest of shareholders.

The decision to buy back stock is a collective decision, really emanates from the financial operations of the Company as to what is the best return for the investment of the shareholders, invested capital for the shareholders. So it is totally unrelated to any of my issues relative to the sale of stock.


Disclaimer: F*ck yes I'm short CFC. Just like Angelo, I have no confidence in CFC's ability to continue as a going concern.

A Special HousingPANIC Message to the Countrywide Mortgage employees who are suing Countrywide and Orangelo Mozilo

Don't just sue. If you're at the corporate headquarters, at 2:00 PM on Friday, everyone get out of your cubicles, and march your soon-to-be-laid off butts down to Orangelo Mozilo's corner office, and DEMAND that that son of a bitch put $100 Million of his ill-gotten insider-trading gains into your 401k plan to help cover your losses.

2:00 PM on Friday. Each and every one of you. Have the courage (finally) to do what's right. And remember, you're about to be laid off anyway, so you have nothing to lose.

Nothing.

Send pictures to HP, do a sit-in if you need to, and good luck out there.

Employees Sue Countrywide, Alleging Loss of Millions of Dollars in 401k Plan

Some Countrywide Financial Corp. employees sued the mortgage lender Wednesday, claiming they suffered heavy losses in their 401k retirement accounts after the company failed to warn them about the depth of its financial troubles.

The lawsuit, filed in U.S. District Court in Santa Ana, seeks class-action status and names as defendants Countrywide Chairman and Chief Executive Angelo Mozilo and benefits committee members in charge of the retirement plan, according to attorney Steve Berman, who is representing the plaintiffs.

He said employees decided how much of their salary to set aside in their retirement plan based in large part on their understanding of the company's financial health.

But those overseeing the plan failed to warn workers or intentionally concealed key information, the lawsuit claims.

"Most of these employees weren't risk-takers, rather claims processors and line staff who go to work every morning, putting a little away every month for retirement, or to finance a child's education," Berman said in a statement.

FLASH: As predicted here 48 hours ago, down-and-out toxic mortgage lender Countrywide Mortgage laying off 10,000 to 12,000 (for starters)

Tomorrow's news today here at HP... And hey, it's Friday night, time the mortgage lenders, banks and builders put out the REALLY bad stuff... (note - yes, of course, I'm short CFC)

This one was easy HP'ers. Next comes the multi-million (if not billion) dollar financial restatement as their auditors demand Orangelo "marks to market" the crap on his books. But only 12,000 Angelo? Sorry to say, but 61,000 are actually at risk, as this toxic business struggles to stay afloat (now that Angelo has cashed out). Maybe he can chip in for their severances with his ill-gotten gains.

Question though Angelo: With 12,000 less employees, who'll manage the lines of people streaming into your Countrywide offices looking to get their deposits back?

Countrywide Plans to Cut As Many as 12,000 Jobs

Countrywide Financial Corp. is expected to announce plans to reduce its work force over the next three months by 10,000 to 12,000 jobs, representing as much as 20% of the current total.

The largest U.S. home-mortgage lender also expects that its loan originations in 2008 will be about 25% lower than this year.

As housing prices suffer "sudden, severe and deep" depreciation, "ENRON 2.0" Countrywide Mortgage predictably melts down

Great expose on Countrywide (I'm short CFC) - one of the leading causes of the Late Great Housing Bubble, and soon to be one of the biggest victims (goodbye 61,000...).

Also, isn't it funny that Countrywide is crashing because, as they say, home prices are "depreciating like never before", with "sudden, severe and deep" depreciation, yet the reported median price is supposedly down just slightly?

In other words, Countrywide is now telling you what's really happening out there (now that Orangelo has sold his shares). The NAR and the US Government are not.

Countrywide's message of confidence turned to crisis - CEO forecast the lender would 'shine' as the industry changed. Later, he said the firm knew the bubble would burst.

A year ago, Countrywide Financial Corp. Chairman and Chief Executive Angelo R. Mozilo was boasting that the looming shakeout in home prices and hike in mortgage interest rates would usher in a period of remarkable prosperity for his company.

"I have 53 years of experience. . . and this is nothing compared to 25% prime and 17.5% mortgage rates and 10% unemployment," he told a conference of bond investors last September, pooh-poohing the effect of rising rates.

"This is when we shine," he said, calling Calabasas-based Countrywide "an industry leader" and "a role model to others in terms of responsible lending."

Today, the picture looks much different. Countrywide's financial reports and recent comments by Mozilo and other executives show that the company, the nation's largest mortgage lender, has been less a role model in the home-loan market than a prisoner of competitive trends.

The tone of executives' comments has gone from complacent to almost apocalyptic.

"We are experiencing home price depreciation almost like never before, with the exception of the Great Depression," Mozilo said in a July 24 conference call with securities analysts.The company's traditional frames of reference for the performance of its loan portfolio, he added, may no longer be "a fair comparison in light of what is happening to real estate values."

But the "sudden and severe and deep deterioration" in home values has thrown many borrowers into delinquency because homeowners with little or no equity have been unable to refinance their mortgages to reduce their rates.

Per bankrate.com, guess which two (soon to be bankrupt) companies have the highest paying 1-year CD's? Yup, Mozilo's Countrywide and IndyMac banks

Hey, who cares if the taxpayer (FDIC) will be left holding the bag? Get those high rates up there, attract some last few suckers with 5.6%, meanwhile dump shares like crazy, and then hit the road!

Countrywide and IndyMac. Posterboys of the Great Housing Crash and Ponzi Scheme. Anyone want to bet which company announces Chapter 11 first? The one Angelo currently runs (into the ground) Countrywide, or the one he founded and is now racing CFC into the ground - IndyMac.

Yup, I'm short 'em both, and the above is 100% personal opinion and free speech. Damn folks, get your money out of these two banks! Hurry!

Countrywide: 5.49% 1-Year CD

IndyMac: 5.41% 1-Year CD

P.T. Barnum Bank: 100% 1-Year CD

(BONUS: Oh, what do you think of the picture? Good point of reference. Anyone catch Mozilo and Michael Jackson together send me the snap. Man, that guy cracks me up. And guess what HP'ers - the guy on the right is Eric Mozilo, less-orange brother of Angelo. So guess where he used to work? You got it - INDYMAC. He was VP of Biz Dev there.. Small world eh?)

We knew what was going to happen. And now it's here. This liquidity crush is simply "revulsion" and "discredit". Housing panic is here.

It's panic folks, and it is here. Panic. In all your lives, you'll never see such a thing again. After the biggest financial bubble in the history of humanity, the biggest crash follows. It hath been foretold.

It's time to head to the cellar. Right on schedule, housing panic is now here.

Again, from the textbook:

Ultimately, the markets stop rising and people who have borrowed heavily find themselves overstretched. This is 'distress', which generates unexpected failures, followed by 'revulsion' or 'discredit'.

The final phase is a self-feeding panic, where the bubble bursts. People of wealth and credit scramble to unload whatever they have bought at greater and greater losses, and cash becomes king.

And just one of the headlines from reality today:

ECB injects €98bn but markets are gripped by panic

The European Central Bank released nearly €100bn (£68bn) in emergency funds into the banking system yesterday in an effort to kick-start the crippled credit markets, but its move only sparked panic selling on stock markets across the world.

The sudden cash injection was the largest since 12 September 2001, when the central bank released billions to stabilise the market after the terrorist attacks in New York.

The trigger for the €98bn package was a major overnight spike in inter-bank lending rates that if unremedied threatened to disrupt the normal functioning and stability of Europe's financial system.

As with the other market upheavals in the last month, the root cause was traced to America where the fallout from the meltdown of the market for risky, or sub-prime, loans continues to widen.