CNBC Press Releases

BARTIROMO: And yet we have a tremendous amount of ARMs resetting this fall. Is it fair to say that we will see further lenders go under?

Mr. MOZILO: Yeah. I think you're going to see further lenders go under for other reasons. So the next lenders going under don't have big servicing portfolios, that sort of thing. But I--the--it's important to note this--in fact, I heard it on CNBC this morning--that there--it's true that there are billions and billions of dollars in 2005, 2006 of these option ARMs and these loans, five-year hybrids that have resets to them. And so what the press has done is taken that block of loans that are all going to reset in 2008 and 9. Not true because people are not stupid. I think there's an ad you guys run like that, that they're refinancing out of these loans. So in Countrywide's case, most of our hybrids, I think it's about 65 percent of our hybrids, that would've been resetting in '07, '08, have already refinanced out of them. So it's not the--you have to take that amount of loans and reduce them by the--by the amount that have been refinanced. A substantial amount have already been refinanced out, so it's not going to be as bad as people think it is.

BARTIROMO: Let's talk about the $2 billion investment from Bank of America. Did you go to other lenders?

Mr. MOZILO: I didn't--no, I didn't go to other lenders, but I did--what I did do is this, in that sense, I did explore at the time this was happening, we had lots of people call us. It wasn't only Bank of America. Lots of people called us to say, `Look, we'd like to make an investment. We think Countrywide's a great company. You've been 40 years, you're the premier company. We want to do this.' And through that process, I felt it was important that I--that if anybody was going to invest in Countrywide, they'd be a premier name, a name that would immediately engendered confidence in the marketplace. And so I selected that company that I thought would do that, and clearly Bank of America did it. But there were--there were four or five companies that wanted to come in and make an investment in Countrywide. And companies that you'd recognize the name. But this was the company that I wanted Countrywide to be attached with.

BARTIROMO: Why would they not want to do it? Look at the terms. Let's face it, Angelo, you've got a high coupon, a convert that's already in the money. People are saying, `Sure, it's great for Bank of America, but the terms are not great for Countrywide.'

Mr. MOZILO: Yeah, they're great for Countrywide. They're fantastic for Countrywide. First of all, it's a very cheap insurance policy, if you took it--look at it in those terms. This was not a matter of looking at stock price. This is a matter of looking at maintaining the integrity of this company that was under siege for no good reason, but it was under siege, the reality was. And the pressure on the people of this company and of the outside world's view of Countrywide was changing rapidly, so this was a very inexpensive insurance policy for the sake of maintaining the integrity of the company and the integrity of our shareholders. And so you have to look at it that point of view, not look at $18 a share or whatever the strike price is on that strike price for the transaction. This was a great transaction for Bank of America, no question about it, but equally better transaction for Countrywide and its shareholders.

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