Countrywide to the world: Borrowers made them do it

So Countrywide is saying that the borrowers forced them to lower mortgage standards and advocates pressured them to make bad loans to homeowners (see underlined portion below).  I guess it has nothing to do with Countrywide’s own greed and the fact that they made billions off of these bad loans.  You know, this is a new low to blame this mess on advocacy groups.  We want stronger regulations, not laxer ones.  There is not ONE advocacy group out there that would want a homeowner to be given a loan just to have it foreclosed upon 2 years later.  

http://www.nytimes.com/2007/11/11/business/11angelo.html?_r=1&dlbk&oref=slogin

New York TimesNovember 11, 2007

Countrywide’s Chief Salesman and Defender

By GRETCHEN MORGENSON and GERALDINE FABRIKANTAS the credit crisis sent financial markets into a tailspin in August, Countrywide Financial, the nation’s biggest mortgage lender, was in dire need of cash. In a move that fueled anxiety among investors, it decided to tap an $11.5 billion credit line it held with a number of other banks. It’s not unusual, of course, for big corporations to borrow money to meet immediate needs or to clear short-term hurdles. But suddenly draining a huge portion of a credit pipeline could signal serious problems. And Countrywide wanted more than just a portion of that funding — it wanted all of it.But before it could do so, said two people briefed on the matter, Countrywide received an urgent call. One of its subsidiaries had lent $40 billion in securities to generate cash, and the Bank of New York, which cleared trades for the unit, was phoning Countrywide, demanding more collateral. The bank was afraid of being stuck with losses. On Aug. 15, when the Bank of New York asked for more cash, Countrywide officials initially balked. They had apparently not foreseen that with investors shunning high-risk mortgages and the credit markets frozen, drawing down its entire $11.5 billion credit line would signal that Countrywide was at the brink. After a series of phone calls, Countrywide met the bank’s demand. For Angelo R. Mozilo, the Bronx-born butcher’s son who was Countrywide’s chief executive and had made a fortune shaking up the staid home mortgage business, it was a humbling moment. A man long accustomed to running his own show his own way was now being forced to come up with more money because confidence in his sprawling enterprise was collapsing. For decades, as Mr. Mozilo built Countrywide into the nation’s biggest mortgage lender, his bravado had served him well. But the same traits that helped him create the dominant lender left him off balance as the growing mortgage crisis threatened to engulf Countrywide. To this day, he says his beleaguered company did nothing wrong during the loose-lending craze that is now unraveling nationwide with record foreclosures and mountainous losses. Instead, Mr. Mozilo considers himself and his company to be victims of financial forces beyond their control.At a conference sponsored by the Milken Institute about two weeks ago, for example, he explained that borrowers forced lenders like Countrywide to lower their mortgage standards. The industry faced special pressure from minority advocates to help people buy homes, he said…. “Countrywide is proud of its role in making homeownership affordable to lower-income households and, as the largest lender to African-Americans, Hispanics and Asians, closing the gap in homeownership between whites and minorities.”  [click on above link to read full article]