Like one out of every six other mortgage-paying Americans, How the World Works woke up today and discovered that his mortgage would shortly be owned by the Bank of America, instead of Countrywide. But I shed no tears. Wells Fargo originated my loan and then immediately sold it to Countrywide. I never asked for the pleasure of writing checks that would pad out Countrywide CEO Angelo Mozilo's bank account, and so I bear no grudge for now being forced to send them to Ken Lewis, CEO of Bank of America.
I am a little alarmed, however, to learn that, should the deal go through, Bank of America will control more than 10 percent of all U.S. deposits. Federal law supposedly forbids any single bank-holding company from breaching the 10 percent barrier, but according to the Wall Street Journal, there's a loophole that exempts federally chartered thrifts, and Countrywide's subsidiary, Countywide Bank, is a federally insured thrift. So Bank of America now apparently has a pretty good shot at being the bank of all America. Is this prudent? What happens if Bank of America runs into troubled waters? The words "too big to fail" come to mind.
In the annals of what is increasingly being referred to as the worst housing bust of all time, the sale of Countrywide for a paltry $4 billion in stock is undoubtedly a major historical event. For Angelo Mozilo, one suspects that the debacle must be a trifle humiliating, even if he is likely, reports the Journal, to add a $36 million severance payment to the hundreds of millions of dollars of cashed-out stock options he's stashed away in the past couple of years.
So what now for Mozilo?
During the conference call announcing the deal, analyst Nancy Bush of NAB Research asked whether Mozilo would have a role in the company, post-merger.
"I would want him to stay until the deal gets done and then probably I would guess that he would want to go have some fun," said Ken Lewis, as reported by the Journal's David Gaffen, who live-blogged the call, "but I'll talk to him next week about his personal desires."
That's right, Angelo. Go have some fun. The well-wishes of thousands of laid-off Countrywide employees and many thousands more Americans struggling through Countrywide's unforgiving foreclosure procedures will no doubt speed you on your way.