All the Devils Are Here [88]
David Loeb, Countrywide’s other founder, wasn’t around, either, having retired as president and chairman in early 2000. (He died of neuropathy in 2003.) Loeb was in some ways the invisible founder, yet he had played a critical role in Countrywide’s success. Access to capital, the sale of loans in the secondary market, the management of interest and credit risk—these were the important but low-profile aspects of the business Loeb focused on.
Loeb’s departure hadn’t been entirely graceful. As he got older, his behavior became more erratic. In July 1999, for instance, the news broke that Loeb had sold a million shares of his Countrywide stock. High-ranking executives at publicly owned companies are never supposed to sell stock without first clearing the sale with the legal department and informing the rest of the management team and the board. Loeb had done neither. When one executive called to ask him why he had sold the stock without telling anybody, Loeb just chuckled.
After Loeb left, Mozilo seriously entertained the idea of selling Countrywide. There were lots of potential suitors knocking on his door, and he hired Goldman Sachs to find the best fit. Although Countrywide came close to selling to a big British bank—and to Washington Mutual—both deals fell apart.
Even without a sale, there were plenty of executives internally with the ambition and skill to run the company. Countrywide’s core group of executives had joined when the company was young and small. Like Mozilo, most of them lacked an Ivy League pedigree but made up for it with a combination of business savvy and fanatical work habits. Most of them had that same chip on their shoulder toward the financial establishment that Mozilo had. That attitude was ingrained in the culture of the company and was a big part of the reason why Countrywide was always striving to outdo the big boys—even after it had become one of the big boys. For Countrywide’s top executives, that deep-seated need to prove themselves never completely went away.
Chief among these executives was Stanford Kurland, a graduate of California State University Northridge, who was hired by Countrywide in 1979 after spending the early part of his career as Countrywide’s auditor. Kurland had an intense, bookish demeanor and a slow, almost hesitant way of speaking that served to mask his deep emotion and strong will. In 1995, he became the chief operating officer of Countrywide Home Loans, the prime mortgage division that had always accounted for the bulk of Countrywide’s business; four years later, Kurland became the division’s CEO and joined Countrywide’s board. In 2004, he became president and chief operating officer of the parent company. To the employees, he was as much the boss as Mozilo. “It was always ‘Angelo and Stan want to do this,’” recalls a former executive.
Kurland was the one who took on the tasks that Loeb had always handled, making sure that Countrywide’s increasingly intricate plumbing worked perfectly. This was no small task at a company that was funding tens of billions of dollars’ worth of loans every month. “He was the inside guy, the numbers guy, the operations guy,” says a former analyst. In 2000, Paine Webber analyst Gary Gordon wrote a report celebrating Countrywide’s “wonderful discipline.” That discipline was very much Kurland’s doing, and he took great pride in it. He’d later tell people that while he was there, “there was never a single issue.” He was right. Other mortgage originators occasionally had trouble with funding or the sale of their loans. Countrywide never did.
Kurland also pushed Countrywide to diversify. He wanted Countrywide to be one of the most admired financial services providers in the country, not just a big mortgage maker. To that end, Countrywide bought a bank in 2000. Because the bank was regulated by the