Commentary: Federal lawsuit says even Mozilo was shocked

Read more: http://www.marketwatch.com/story/fed...7?pagenumber=1

NEW YORK (MarketWatch) — Bank of America Corp.’s story has long been that Countrywide did it. But a lawsuit filed last week by the Federal Housing Finance Agency tells a different tale.

The lawsuit claims that when former Countrywide Financial Corp. CEO Angelo Mozilo marveled at the dizzying recklessness of the mortgage-lending business, he was in fact looking at Charlotte-based Bank of America BAC +3.68% .

This is perhaps one of the most insulting claims ever leveled in a mortgage-fraud lawsuit. Bank of America would probably feel outraged if it weren’t so overwhelmed with its nauseating plunge on the stock market.

Mozilo has easily eclipsed Enron’s brass as one of the most-hated executives of all time. He has become the poster child for the fraudulent mortgage-lending practices that torpedoed the U.S. banking system and the entire global economy.

But he was smart enough to sell Countrywide as it nearly collapsed in January 2008. And Bank of America was dumb enough to buy it for $4.1 billion.

Since then, Bank of America has been blaming Countrywide for a litany of problems.

Last May, for instance, Bank of America put up $22 million to settle charges it improperly foreclosed on active-duty troops.

There is no worse public-relations fete than sending foreclosure notices to the people risking their lives on a battlefield. So Bank of America set the record straight in a prepared statement:

“While most cases involve loans originated by Countrywide and the improper foreclosures were taken or started by Countrywide prior to our acquisition, it is our responsibility to make things right,” Bank of America executive Terry Laughlin said.

Ooh-Rah, Bank of America!