Mario Antoci, chairman of California's American Savings Bank, has no patience for those who claim that thrifts are offering adjustable-rate mortgages at recklessly low rates.

In a recent interview, he lashed out at the critics - especially Angelo Mozilo, vice chairman of CountrywideCredit Industries.

Mr. Antoci, whose thrift is the nation's fifth largest, is considered one of the foremost experts on adjustable mortgages. Excerpts from the interview follow.

Q.: Why are thrifts doing so well right now? ANTOCI: What we've got going for us now is a huge competitive advantage in the cost-of-funds-index [COFI] ARM.

You can't get a six-month CD that pays the rate of a six-month T-bill right now.

Until all the accounts that we have roll over into those rates, the cost-of-funds index will always be low.

Q.: Mr. Mozilo says that thrifts are being irresponsible in charging such low start rates for ARMs. How do you reply?

ANTOCI: He's just a crybaby.

People like Angelo Mozilo just forget that the world runs in cycles. It's his cycle to be on the bottom of the list and ours to be on the top of the list right now.

And the interesting part is that Countrywide, as much as they don't like the cost-of-funds index ARM, is trying to do business with us.

Tomorrow he would do 3.95 teaser-rate ARMs if any of us would do business with them.

Q.: Are you negotiating to buy loans from Countrywide?

ANTOCI: He wants to sell his loans to us. But none of us who are portfolio owners want to do it with a servicing release.

Countrywide wanted to keep servicing. They finally threw in the towel on that.

We said OK, but we're not going to let you compete with us.

If you want to do it, you're rate is higher.

Q.: Are you saying they'd make the same loans American makes, but at a higher rate?

ANTOCI: If they want to sell to us, they will.

They always had the lowest fixed rate in the business. None of us could compete with Countrywide, but now Countrywide can't compete with us. Why would I help them?

Q.: The Western region of the Office of Thrift Supervision recently wrote to thrifts, raising concerns about how ARMs were being priced and underwritten. What did you think of that letter?

ANTOCI: There were a couple of people who probably should wake up and do something sooner than later.

Some of those offering these very low caps are not in the greatest shape.

But we were awake.

We're not stupid. We know that right now is the perfect opportunity for us to raise the yields on our loans.

You'll see teaser rates start to increase, but we'll still be in the low fours probably and be very safe.

Q.: Will you be ready to start selling some of these loans by the end of the year?

ANTOCI: No, because we have a pretty good appetite yet.

Q.: You caused quite a stir with your comments in our paper last year about the high guarantee fees you say Fannie charges on low-income loans, Have you been doing any deals with Fannie Mac lately?

ANTOCI: We're talking to them about doing more. I wouldn't say the talks are going really great right now. But these things take time.

ANGELO MOZILO replies: "I wouldn't dignify his comments with a response."

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