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Brian Koss spent four years as a senior regional vice president at Countrywide Financial where he ran 54 branches in New England and upstate New York. During that time Countrywide went from 13th to 1st in market share for New England. But Koss has since moved on.
He now works for another lender, Mortgage Network Inc. He looks back on Countrywide with sadness. “It is an amazing saga of the great American rags to riches to rags story,” Koss says. “Angelo Mozillo, the butcher’s son from the Bronx grew a 60,000 employee firm.”
As Koss see it Countrywide became a victim of “public company panic.” He says, they were “reacting to each quarter’s earnings and making short term decisions. They approached making loans like making widgets, focusing on cost to produce and not risk or compliance. Programs like “Fast and Easy” where the income and assets were stated, not verified, were open to abuse and misuse. The fiduciary responsibility of making sure whether the loan should truly be done was not as important as getting the deal done. As long as people had jobs and values were on the rise, life was good.”
He thinks Countrywide’s merger with Bank of America will not go smoothly. “In the end the cultures won’t mesh and there will be many unemployed. Plus, customers will have less competition to choose from and most likely less innovation.” Although, he ads, “Maybe that is a good thing.”
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.