Today, while searching news about the mortgage market, I kept running across references to Countrywide financial Corp and the concern over CEO Anthony Mozilo.  I have written about Countrywide a lot in the past few months, and though it may seem that I single out the company, the fact remains that the fallout from everything mortgage related lately seems to come back to Countrywide and its actions.  I have to think that when I search on Countrywide and find 10 pages related to the problems within the company, that there is probably something to it.

The Pension Plan View

One of the largest union-affiliated pension plans, the Washington D.C.-based American Federation of State, County and Municipal Employees, have asked for the removal of Mozilo because of the fall in price of shares, which amounts to more than 50 percent since January. The union has over 1.4 million members. Shares of Countrywide fell $1.28, or nearly 8 percent, to $15.23 on Friday.  The pension plan has asked that Mozilo be replaced with two independent directors to the board.  Gerald W. McEntee, president of the union and chairman of its pension plan, said “Adding new independent directors is a way for stockholders to change an atmosphere that allows a dominant dual-role chairman and CEO to operate without appropriate checks and balances.”

Other News On Countrywide

The SEC is still a bit interested in what Mozilo is doing with his sudden increase in stock sales.  North Carolina’s state treasurer asked the Securities and Exchange Commission to investigate Mozilo’s stock sales, raising questions about changes made to Mozilo’s plan in the months before the company’s stock plunged.  Supposedly, his sales are within the law, but he has made a number of changes to his selling profile that is deemed questionable.

Billionaire Warren Buffett said his Berkshire Hathaway Inc. “never came close” to acquiring shares of mortgage lender Countrywide Financial Corp.  The Berkshire chairman said he was in contact with Calabasas, California-based Countrywide as the company’s stock fell in August. Buffett said “the company lacked a comprehensive plan that might have interested Berkshire.”

In Conclusion

For many years I thought as my father did - that a company such as Countrywide, being a leader in the mortgage community, should be a role model to all others in the industry.  I gave that up a very long time ago.  I think it would be good if they were leaders.  It would give a little confidence in the market.  But when we see CEO’s such as Mozilo dumping shares as fast as we can, and yet still leading the company, it gives us pause.  This issue will never go away as long as we have people like this in their industry.  It’s time for a change.