Goodbye and Good Riddance: Arcane Accounting Rules Failed Us in Securitization Mess (Part 1)

The views expressed here aren’t necessarily those of the ACFE, its executives, and employees. – ed.

“All tragedies in life are preceded by warnings.”
Arthur Levitt, former chairman of the Securities and Exchange Commission

In February 2003, Angelo R. Mozilo, an Italian butcher’s son and the well-tanned and impeccably dressed manifestation of the American dream, stood before an audience of academics and mortgage professionals in Washington, D.C., to describe his vision.

“Expanding the American dream of homeownership must continue to be our mission,” he said, “not solely for the purpose of benefiting corporate America, but more importantly, to make our country a better place.” As the chairman, chief executive officer, and president of Countrywide Financial Corporation, the mortgage banking behemoth he co-founded nearly 35 years before, Mozilo possessed both the power and vast resources to transform his gauzy message into hard-boiled business policy.