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Countrywide CEO Must Go, Advisory Group Says: WSJ

Reuters
Sunday, 21 Oct 2007 | 3:15 PM ET

CtW Investment Group, a pension fund advisory group affiliated with seven labor unions, said it sent a letter to the board of Countrywide Financial, urging it to ask for the resignation of Chief Executive Angelo Mozilo, The Wall Street Journal said.

A draft of the letter cited questions raised by the U.S. Securities and Exchange Commission (SEC) over Mozilo's heavy selling of shares that he acquired through stock options, the Journal reported on its Web site on Friday.

The letter also said a culture of non-compliance exposed Countrywide , the largest U.S. mortgage lender, to litigation and increased regulatory scrutiny, the Journal added.

Two CtW officials and two Countrywide officials did not return telephone calls and email messages seeking comment.

The Calabasas, California-based Countrywide is under SEC investigation, the Journal has reported, amid questions about Mozilo's increasing his stock sales as the subprime lending crisis in the United States was heating up.

On Thursday, New York Democrat Sen. Charles Schumer, said an investigation of Countrywide's chief executive should be expanded to include the company, which is among a dozen firms the SEC is looking into in connection with the subprime woes, according to reports.

Countrywide on Oct. 11 reported that it funded 44 percent fewer mortgage loans in September as it tightened lending standards, while delinquencies increased and foreclosures more than doubled.

Countrywide cut 4,935 jobs last month, leaving it with 55,932 jobs. It plans to cut as many as 12,000 jobs by December to cope with a deepening U.S. housing slump.