Dear Subprime and Option ARM Borrower: You Disgust Me with Your Loan Modification Form Letter.

Some of this stuff you simply cannot makeup. At this point, I think the majority of folks have come to realize that any legislation trying to help homeowners and lenders is guided by politics rather than good economics. There is a fascinating incident that occurred where our favorite CEO appears to have replied to the wrong e-mail. Whoops! We have all witnessed this type of e-mail in our working lives. I recall being Cc’d (carbon copied) on an e-mail with a dozen or so other’s about a colleague’s retirement. One of those on the Cc list accidentally replied to all and wrote “thank god this bi— is out!” clearly intending the e-mail go to one of her contacts on the list and obviously not to the main retiree. Hilarity ensued after that.

Here is the rundown:

  1. 1. Borrower takes out a loan with Countrywide
  2. 2. Borrower has problem paying loan back
  3. 3. Borrower e-mails numerous Countrywide e-mail addresses including Angelo Mozilo about a loan modification.
  4. 4. CEO forwards message to correct party.
  5. 5. Sends another message stating that he suspects folks are using form e-mails and ends the message with “disgusting.”
  6. 6. E-mail not intended for all to see.
  7. 7. E-mail now public
  8. 8. Hilarity ensues.

The original post was made over on a forum where borrowers in trouble were trying to get advice on the best way to go about doing loan modifications. Loss mitigation is a treacherous road to go down for the uninitiated so this borrower sought out help and found a community of others online. Here is the message sent back to the borrower from Mr. Mozilo:

Subject Re: bailey acct# xxxxxxxxxx
Interesting to find that you think my letter is disgusting. I will send this on…. wrote:

This is unbelievable. Most of these letters now have the same wording. Obviously they are being counseled by some other person or by the internet. Disgusting.”

You really need to read the entire thread. There needs to be a mandate that all CEOs have the reply to all button removed from their Outlook e-mail accounts. Clearly this borrower was qualified enough to land a Countrywide mortgage but now they find it “disgusting” that someone in distress is asking for help? The Los Angeles Times is all over this puppy:

“Apparently clicking “reply” when he meant to hit “forward,” Countrywide Financial Corp. Chairman Angelo Mozilo ignited an online furor Tuesday by describing a mortgage customer’s plea for help as a “disgusting” example of form letters inundating the Calabasas home lender.

Mozilo’s e-mail rocketed back to the customer, Daniel Bailey Jr., who had asked Countrywide to modify the terms of his loan so he wouldn’t lose his home of 16 years…

…Bailey and Mozilo couldn’t be reached for comment. Late in the day, the lender issued this statement: “Countrywide and Mr. Mozilo regret any misunderstanding caused by his inadvertent response to an e-mail by Mr. Bailey. Countrywide is actively working to help borrowers, like Mr. Bailey, keep their homes.”

This is another X-factor with the internet that tiny incidents like this can go viral even before the public relations department can devise a strategy to react. You really have to love that response from Countrywide and I bet they regret that “misunderstanding” from this e-mail. My other observation is that Mozilo seems to be rather accessible if he is dealing with e-mails straight from the public.

Let us Remember Enron Tapes

Flaps like this happen all the time. People forget why they teach aspiring shady folks through the movies to use public pay phones and stay off e-mail or anything that is written. You know how we feel about this entire housing market debacle and what has been going on through the decade should be enough evidence to put tons of people away behind bars. Yet sometimes the thing that opens the public flood gates of anger is arrogance. Let us remember those Enron tapes given that it is appropriate with the ever increasing price of energy:

(CBS) When a forest fire shut down a major transmission line into California, cutting power supplies and raising prices, Enron energy traders celebrated, CBS News Correspondent Vince Gonzales reports.

“Burn, baby, burn. That’s a beautiful thing,” a trader sang about the massive fire.

Four years after California’s disastrous experiment with energy deregulation, Enron energy traders can be heard – on audiotapes obtained by CBS News – gloating and praising each other as they helped bring on, and cash-in on, the Western power crisis.

“He just f—s California,” says one Enron employee. “He steals money from California to the tune of about a million.”

“Will you rephrase that?” asks a second employee.

“OK, he, um, he arbitrages the California market to the tune of a million bucks or two a day,” replies the first…”

Bwahaha. Oh that is funny! Do you get that humor? The poor masses get screwed and these traders make money. It is like a reverse Robin Hood. They won’t call it screwing you over but they’ll label it arbitrage. Kind of like labeling toxic destructive waste mortgages as Pay Option ARMs. Let us read a little more of what these comedians had to say:

“They’re f——g taking all the money back from you guys?” complains an Enron employee on the tapes. “All the money you guys stole from those poor grandmothers in California?”

“Yeah, grandma Millie, man”

“Yeah, now she wants her f——g money back for all the power you’ve charged right up, jammed right up her a—— for f——g $250 a megawatt hour.”

And the tapes appear to link top Enron officials Ken Lay and Jeffrey Skilling to schemes that fueled the crisis.

“Government Affairs has to prove how valuable it is to Ken Lay and Jeff Skilling,” says one trader.


Fantastic rhetoric! Falls on the ears like Shakespeare. This is the problem with letting folks run lose like a bunch of drunken sailors. Their actions behind their computer terminals have massive impacts in the real world. They should be punished as such. There is a fantastic hour-long radio show talking about the entire housing debacle over at This American Life. You really need to listen to the entire thing. We have a young college grad in the mortgage industry bragging about his $50,000 to $75,000 a month pay checks while partying with B-list celebrities like Terra Reid and drinking thousand dollar bottles of Kristal. He is now back at home looking to walkaway from his mortgage. Easy come easy go. Let us recall a bit more of those Enron tapes just to remember how corrupt unmitigated gambling can get:

“It’d be great. I’d love to see Ken Lay Secretary of Energy,” says one Enron worker.

That didn’t happen, but they were sure President Bush would fight any limits on sky-high energy prices.

“When this election comes Bush will f——g whack this s–t, man. He won’t play this price-cap b——t.”

Crude, but true.”

And there you have it. Sort of reminds you of when Ameriquest dumped mortgage documents straight into the garbage:


*Click to watch amazing sophisticated mortgage security.

All this courtesy of the folks that brought you the credit and housing bubble. Now that is truly disgusting.

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15 Responses to “Dear Subprime and Option ARM Borrower: You Disgust Me with Your Loan Modification Form Letter.”

  • Stuff like this makes me not want to trust anyone anymore

  • DidTheBorrowerCashOutRefi?

    Not enough information on the borrower. From what is provided I wouldn’t help him either as I assume that he cashed out equity after owning the home for over a decade.

    Funny that Mozilo shows his true colors, but I don’t have a bit of sympathy for the borrower. He hit up the ATM and when it was closed he was screwed.

  • Chris in Cali

    Well, well…. greezy Tony tells the gov’t to hold off on “cram downs” because they are “diligently working” on loan modifications. REALLY? You don’t say…? I mean, I know us peons and our overstretched little budgets are disgusting, you don’t have to tell me!

    Mozilo: you try paying a $500K mortgage on a $65K / year job. I bet you’d be crying for help too… you made the loan, you LIVE with the results too.

    (man, I’m so glad I didn’t buy a house… STOP THE BAIL OUT… it is only going to make more people like Mozilo)

  • It would seem that both the distressed homedebtor and the distressing, tanned mortgagee are both just one step ahead of the sheriff.

  • First thing that crossed my mind? Why does the dude need a (new) mortgage after being in the house for 16 years? Sounds like a cash out re-fi to me. For once I can honestly say good for Mozillo. Thsi Bailey dude should be thrown out on the street.

  • Comment by DidTheBorrowerCashOutRefi? who writes “Not enough information on the borrower. From what is provided I wouldn’t help him either as I assume that he cashed out equity after owning the home for over a decade.” Comment by Matt who writes ” First thing that crossed my mind? Why does the dude need a (new) mortgage after being in the house for 16 years? Sounds like a cash out re-fi to me.”

    ******Problem about ‘assuming’ is that it generally males an ass-of-u. Only the ignorant, arragont and supercilious ‘assume’ or go with their ‘first thought’ without truly thinking through the many ways in which a situation could arise and using the imagination to put themselves in the socio-economic position of the that person.

    ***** From the size of the house and his personal history mentioned in the full article, he very well could have refinanced in order to pay for (1) repairs – the house IS 87 years old); (2) medical bills – doubt he has a job that provides health insurnace; (3) buy out an ex-spouse; (4) repair or replace an old vehicle that is necessary to get to his lowpaying job and (5) get through a job loss until he found new employment – doesn’t sound like he would have the kind of job that pays the kind of income that allows anyone to sock away 6-12 months of living expenses. Those clues are ALL in the story.

  • It’s a Wonderful Life – THAT Bailey?

    “George Bailey: Just a minute – just a minute. Now, hold on, Mr. Potter. You’re right when you say my father was no businessman. I know that. Why he ever started this cheap, penny-ante Building and Loan, I’ll never know. But neither you nor anyone else can say anything against his character, because his whole life was – why, in the twenty-five years since he and Uncle Billy started this thing, he never once thought of himself. Isn’t that right, Uncle Billy? He didn’t save enough money to send Harry to school, let alone me. But he did help a few people get out of your slums, Mr. Potter, and what’s wrong with that? Why – here, you’re all businessmen here. Doesn’t it make them better citizens? Doesn’t it make them better customers? You – you said – what’d you say a minute ago? They had to wait and save their money before they even ought to think of a decent home. Wait? Wait for what? Until their children grow up and leave them? Until they’re so old and broken down that they… Do you know how long it takes a working man to save five thousand dollars? Just remember this, Mr. Potter, that this rabble you’re talking about… they do most of the working and paying and living and dying in this community. Well, is it too much to have them work and pay and live and die in a couple of decent rooms and a bath? Anyway, my father didn’t think so. People were human beings to him. But to you, a warped, frustrated old man, they’re cattle. Well, in my book he died a much richer man than you’ll ever be. “

  • My parents refinanced their home several times over the years to pay for things like my sisters unplanned pregnancy, her wedding, help her with her down payment when she bought a home, her divorce, her second wedding, her second home, her second divorce, her third marriage….their parents long term care when they all developed lung cancer from smoking…anyway you get the point. They never lived extravagantly, life just took turns they did not particularly expect. And they had this home and trouble and banks that smiled and said “We can help.” They bought their five bedroom home for 70,000 in 1975 just outside of DC. They are currently underwater on their home and my Dad is partially retired at 70.
    Now I’m priced out of buying a home, and watching my parents taught me that no matter what, you don’t spend money you don’t have. But when it comes to caring for your family, people take extraordinary risks. I’m not for a bailout, but I also recognize that not all of the people who are in trouble because of this bubble are there because they were greedy jerks in desperate need of a comeuppance. Some people honestly need a work out or someone who will help them get their finances under control. The guy in the article asking for a help, there’s not enough info to proclaim him irresponsible as there is not enough info to proclaim him in need. Let’s try to give some the benefit of the doubt. Especially people over say 60. That generation has lived their entire life in a world where prices have only ever gone up, recessions have been solved and their experience has left them ill prepared for economic havoc that is here now.

    I can’t believe I’m saying that, while part of me wants to punish them for a lack of foresight, but really. We should be careful not to paint everyone with the same brush.

  • CountrywideHasBrains

    I say good for Countrywide. I just hope this continues and maybe we might make it out of this mess. Countrywide may have screwed people, but again the people are trying to get Countrywide to do the screwing again. The people that got these loans are the real problem. This guy should be renting or moving to a new location he can afford. I sure hope Countrywide doesn’t do the mod, because it will be even sadder then his letter. How else are people going to learn? I hope everyone learns of this letter and I hope Country makes public why they are going to reject him.

  • Why is everyone so upset about the collateral? Both parties assumed risk on mortgage. If one side doesnt comply, then there is recourse. Cuntry-Wide gets the house if he dont pay. They funded $$ when he asked for it, right?? Detach emotions from the contract, and its easy and painless. Just start over, what’s the big deal??

  • great article, thanks!

    it’s a shame it takes waiting til the point that arrogance gets these guys to slip up; but at least it’s a dependable mechanism 🙂

  • “If this happened say 20 years ago, it would take some savvy journalist a lot of time to head down to the county clerk’s office, . . . . .”

    Or if you lived in Utah or any other non-disclosure state!

  • “Good for Countrywide” ??? “Good for Mozilo” ??? I can’t believe some of the comments today! Mozilo is a nasty person who knew what he was doing. The dumb schlub who is going to lose his house of 16 years is just dumb, not a criminal. He was told his house was worth half a million dollars. He drank the Kool-aid. He’s an idiot. But, please don’t give props to Mozilo or Countrywide. These people need to be put in jail for what they did to dummies who can’t make sense of home mortgages and personal finance.

  • Some of you guys are heartless. Lets hope you are never in a postion of need and if you are, you don’t run into your twin. You ever consider that by helping these people and keeping thier homes off the inventory list, that it helps all of us.

  • Sal, please, explane to me how this is helping me, if i am waiting since 2002-2003 for this bubble to get into the history. How is helping the rest of responsible people that did’t jump into the gipsy wagon of REIC industry. In LA county only there is 5 million renters. You don’t believe there is such thing like a “renter by choice”, do you? I have children too, my friend, which want to have backyard. I myself have lost part of my life waiting for this madness to be over. Don’t try to get it from me, now! Of course I’m happy that FB which were propeling the bubble with their reckless “desision to buy” , when there were already voices in the media that on some places the prices have gone 2 times the historic trend average. And they we still buying! Idiots! Complete and full idiots! Everybody desrves it. I have almost carry my cross over this bubble.

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