"Our whole place in the industry would have changed dramatically because we would have arbitrarily made a decision that was contrary to what everything appeared to be," he said. Among other problems, mortgage brokers would have stopped offering the company high-grade or prime mortgages if it would not also accept lower-quality sub-primes.
Countrywide suggests that mortgage pricing and underwriting standards during the housing boom were set by the most aggressive -- that is, least rigorous -- lenders, and that it was all but powerless to impose its own standards.
Of course, throwing all lending standards out the window as his competitors did also allowed Mozilo to post big numbers, drive the stock into the 40's, and cash out hundreds of millions of dollars for himself while leaving shareholders and employees holding the bag.
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