His star tarnished, Mozilo exits stage

Bank of America, which initially invested $2 billion in Countrywide last August, agreed in January to buy the lender outright for an additional $4 billion in stock. The deal's value has since tumbled to $2.5 billion as Bank of America's share price has declined, partly out of concern about the wisdom of the acquisition. Early last year, Countrywide was worth more than $25 billion on paper.

Ken Lewis, Bank of America's chief executive, made clear from the start that Mozilo would depart after the deal closed, with Bank of America's more conservative management and lending styles to prevail. Countrywide President David Sambol initially was tapped to run the combined mortgage operations but BofA later said one of its longtime executives would be sent to Calabasas to fill that post.

Mozilo began his career at 14 as a part-time messenger for a Manhattan mortgage lender. He worked his way up, eventually attended college at night and moved to Virginia and then Florida after the Manhattan firm merged with a Southern lender. When a conglomerate bought the business in 1968, Mozilo resigned and the next year opened what was initially Countrywide Credit Industries with his former boss, David Loeb.

The sharp-dressing Mozilo was 30, with a wife and three children, when he headed for Southern California, Muolo and co-author Mathew Padilla write in their book. California's population and home sales were booming, and Mozilo, a tireless salesman, began opening four-person retail offices in the 1970s for Countrywide, which moved its headquarters from New York to Pasadena and then Calabasas.

Countrywide started out making so-called government loans -- mortgages that could be insured by the Federal Housing Administration or guaranteed by the Veterans Administration. The company expanded into traditional mortgages that could be sold to Fannie Mae and Freddie Mac, the government-sponsored mortgage buyers, and became Fannie Mae's largest supplier after the savings and loan meltdown of the late 1980s left many of its rivals in ruin.

That relationship was how Mozilo became close with former Fannie Mae Chairman James A. Johnson, one of many prominent people, including two U.S. senators and two former Cabinet members, whom Mozilo reportedly helped get loans on better terms than generally available to the public.