All the Devils Are Here [139]
He was. In September 2006, just after the American Banker gave Mozilo its Lifetime Achievement Award, Countrywide announced that Stan Kurland was leaving the company and Sambol would replace him as president and COO. Mozilo would stay on as CEO until 2009, by which time he would be seventy-one. Kurland’s departure was the culmination of the estrangement that had developed between the two men, who had worked together for three decades. Kurland left without so much as a good-bye e-mail to the staff. Hurt and embittered, he told a friend that he didn’t see the point in pretending otherwise.
One former Countrywide executive recalls explaining to Mozilo why Sambol was the wrong choice: “I tried to get Angelo to appreciate where Sambol was coming from. I’d say, ‘He’s not strategic and he’s not long term.’ Angelo would just stare blankly back at me.”
But to anyone who thought about it, there wasn’t really a big mystery as to why Mozilo had fallen so hard for Sambol. Sambol was a salesman, just like Mozilo. Sambol craved market share, just like Mozilo. He was passionate about Countrywide. He was a believer. With Sambol as president, he didn’t have to turn over the reins of his company to anyone else, not just yet. What’s more, with Sambol as his number two, Mozilo could avoid having to face the hard choices that needed to be made. Sambol didn’t seem to want to play defense, even if that’s what the company needed, as subprime madness spread and interest rates continued their ascent. In the spring of 2006, he told investors, “We’re extremely competitive in terms of our desire to win and we have a particular focus on offense.”
A few months before Kurland officially left, Mozilo had sent an e-mail to Sambol, CFO Eric Sieracki, and other executives. It could have been written by two different people. (Kurland was only CC’d.) He began the e-mail with what amounted to an acknowledgment of reality: “As we are all aware Stan has begun a major undertaking to assure that we reduce midline expenses as rapidly as possible and to be reduced at least in concert with expected revenue reductions from our production divisions.” He continued, “I want you to examine our risk profile.”
But then, as he wound it up, he displayed where his heart really was: “By the way,” he wrote, “we must continue to grow our sales force and all other businesses that keep the top line increasing particularly in the origination channels.”
In late 2006, another meeting of mortgage executives was taking place, this one in Kauai, Hawaii. This was a gathering of Washington Mutual’s top producers. As part of the festivities, a handful of WaMu employees did a skit about a funeral for one of its competitors. At the podium, one employee solemnly read a note. “For this day, we have lost one of the true legends in our industry.” As he spoke, a coffin imprinted with a logo was carried out onto the stage by four pallbearers dressed in black, wearing black sunglasses. The logo read: COUNTRYWIDE.
“So many of us warned the dearly departed about the risky—some may say reckless—behavior they engaged in,” he continued. “Throwing money around like Paris Hilton and selling products they don’t really know or understand.” As the sounds of “Na Na, Na, Na, Hey Hey, Goodbye” filled the room, he added that there was a bright side to the passing of WaMu’s biggest rival: “[S] ome really scary and dangerous people won’t be on the street anymore.”
This was fiction, of course. At the time it took place, Countrywide was the biggest mortgage lender in the country. But the point was this: within the industry, it wasn’t any secret that Countrywide was out on the edge of the mortgage market, even if Mozilo himself didn’t want to believe it. Even WaMu, which was doing plenty of its