James Johnson, chairman of the Federal National Mortgage Association, gazed out at the vast and ornate ballroom of a Chicago hotel.
"This reminds me a great deal of the dining room in Angelo's home," he said, eliciting roars of laughter from an audience of mortgage bankers.
Angelo Mozilo insists he has a modest dining room, but there is no denying that he's been operating on a truly grand scale.
Countrywide Credit Industries, the Pasadena, Calif., mortgage bank over which he presides, emerged as the nation's largest originator of home loans for the first half of this year, up from No. 4 in 1991.
Profits Boost Paycheck into Top Echelon
Riding the refinancing wave with a vengeance, Mr. Mozilo hopes to produce $30 billion of loans this year, almost double the industry record.
Countrywide's profits, and its top executive's paycheck, have been soaring as well.
Mr. Mozilo, who co-founded Countrywide in 1968, saw his cash compensation hit $1.9 million last year, topping the pay of all thrift executives and all but three of the leaders of the nation's publicly traded commercial banks. (He earned slightly more than Charles Sanford of Bankers Trust New York Corp., slightly less than Hugh McColl of NationsBank.)
A deeply tanned man of 53 with perfectly coiffed silver hair, Mr. Mozilo is accustomed to high-echelon company. Lately, he has been cavorting with the country's political elite.
In his post as this year's president of the Mortgage Bankers Association of America, he lingered near the podium at the Democratic convention in New York to ensure that his industry got a plank into the platform. It did. And, to hedge his bets, he'll travel to Houston next week for the Republican convention.
Mr. Mozilo, however, is no diplomat. In politics, as in mortgage banking, the supremely self-confident executive is blunt and combative.
Faceoff with Jack Kemp
Jack Kemp knows this all too well.
For months, the secretary of housing and urban development has been under sharp attack from Mr. Mozilo for scaling back the Federal Housing Administration's mortgage insurance program, long a mainstay of mortgage banking.
By now, the Mozilo assault on Mr. Kemp has extended far beyond the arcane details of the program into a decidedly personal attack.
In May, Mr. Mozilo blasted Mr. Kemp as "a lousy secretary. He's the worst person who could have possibly been put in that position."
In a recent interview, Mr. Mozilo couldn't resist quoting a young grandson of Mr. Kemp, who reportedly introduced the politician to a Sunday-school class as "a famous public serpent."
Insight or Snake Oil?
"That was very insightful of the grandson," Mr. Mozilo exults. Alfred DelliBovi, HUD's No. 2 official, dismisses Mr. Mozilo's barbs as "cheap kind of stuff that grown-ups would be better to refrain from." Mr. Kemp could not be reached for comment.
Such antics have made Mr. Mozilo a legend in the mortgage world. In the past few years, he has launched verbal assaults on such industry giants as Citicorp, the Federal Home Loan Mortgage Corp., and General Electric Capital Corp. His most frequent complaint: Unfair competition.
It was Mr. Mozilo who popularized the phrase "kickback program" to describe Citicorp's MortgagePower plan that was aggressively promoted in the 1980s. Citicorp struck up close relationships with realty brokers to get customer referrals and, in the process, became the most active mortgage lender of the late 1980s.
Tables Are Turning
Mr. Mozilo claimed that MortgagePower's fee structure amounted to kickbacks to the brokers. The banking giant, which ultimately scaled back the program after delinquencies mounted, vociferously denied the charges.
Now that Countrywide itself is in front of the pack, the tables are starting to turn. Many rivals, for example, are quietly grumbling that Countrywide heavily underprices to build market share.
Even Mr. Mozilo's tan is coming under scrutiny. "I think it's manufactured," snipes one mortgage banker.
Certainly, no serious mortgage lender can afford to ignore Countrywide. H.F. Ahmanson & Co., the nation's largest thrift company, recently produced a 36-page internal strategic report on Countrywide.
It scrutinizes the company and highlights what most rivals and analysts agree are Countrywide's chief strengths: Advanced technology and low operating costs.
Advertising Lures Brokers
In retail originations, for example, Countrywide avoids the expense of commissioned loan officers altogether. Instead it relies on heavy advertising to real estate brokers.
Perhaps the most intriguing part of the Ahmanson report is its dossier on Mr. Mozilo, who is vice chairman of Countrywide Credit and chief executive of its main operating subsidiary, Countrywide Funding Corp.
The dossier starts off in admiring tones. "Hands-on manager, totally consumed by the business, a perfectionist," it says.
But it quickly moves on to more ominous territory, calling Mr. Mozilo a "dictatorial" boss who "is known to fire employees the first time they make a mistake."
Reaping the Whirlwind
Mr. Mozilo professes to be philosophical about the fresh blasts of criticism.
"He who sows the wind reaps the whirlwind," he says.
A native of the Bronx in New York City, Mr. Mozilo earned a bachelor's in marketing and philosophy at Fordham University.
Upon graduating in 1960, he went to work for a firm called United Mortgagee Servicing Co., in New York, and hasn't strayed from the industry since.
23 Years on the Job
In 1969, Mr. Mozilo founded Countrywide Credit with David Loeb. Mr. Loeb, who holds the title of chairman, supervises Countrywide's hedging and capital-raising activities from homes in Squaw Valley - the famous California ski area - and Manhattan. Mr. Mozilo manages the day-to-day operations from the firm's Pasadena headquarters, often calling on the 67-year-old Mr. Loeb as a sounding board.
Mr. Mozilo, who initially put up $100,000 of equity in Countrywide, today holds about $9.5 million of the company's stock, according to the company's most recent proxy statement.
The stake, amounting to less than 1% of the company's common, would be greater if it were not for a steady succession of new stock issues and occasional moves by Mr. Mozilo to sell his shares.
And what kind of home does the mortgage king himself own? He says he lives in the same house that he and his wife, Phyllis, bought from a unit of Ahmanson in a foreclosure sale 25 years ago. The price: $40,000.
"Of course, I've added on over the years to this $40,000 bungalow," he acknowledged. But Mr. Johnson's crack about the opulent dining room was off the mark.
"It comfortably sits three," he insists.
He does concede to an extensive bedroom plan. His family has grown over the years almost as rapidly as Countrywide. The Mozilos have five children, ranging in age from 15 to 30, plus a 5-month-old granddaughter.
Also, contrary to the never-say-vacation characterization of the Ahmanson report, Mr. Mozilo tries each November to break away from family and business affairs for ventures deep into the wilds of Venezuela or the western Carribeans to hunt for bonefish. These are tough, inedible fish; Mr. Mozilo says he seeks them out just for the fight.
He said he usually brings three friends on each trip who happen to be physicians - an oncologist, an oral surgeon, and a proctologist. Says the ever-provocative mortgage pro: "I try to get all ends covered."