Countrywide CEO: Regulators Should Let Mortgage Market "Self-Correct"
Angelo Mozilo, chief executive officer of Countrywide Financial, told CNBC’s “Squawk Box” that Washington shouldn’t take proven loan products off the market in an effort to resolve the sub-prime mortgage crisis.
He said adjustable-rate mortgages and loans made without a downpayment have been used for more than a generation with proven results.
“It’s very important that we put liquidity back in the system,” Mozilo said while co-hosting "Squawk Box." “It’s important that that the Fed backs off on these guidelines and that people realize hybrids are very good loans.”
He said the Veterans Administration has used no downpayment loans since 1942 and the FHA since 1934.
Some have said the sub-prime lending crisis will turn millions of people out of their homes, creating the worst housing crisis since the 1930s.
“I don’t believe that,” Mozilo said. “If we conduct ourselves properly, if we’re rational as we go through this process and you don’t rush to judgment, we’ll be fine. It’s up to the lenders to do everything they can to keep these people in their homes.”
Mozilo said he believed the mortgage market should be allowed to “self correct” and noted, “Anything you buy today will be worth a lot more five years from now.”