Read the Emails Mozilo Regrets

On Thursday, the Securities and Exchange Commission began its media blitz against Angelo Mozilo by sending out a release with some choice email excerpts from the former CEO of Countrywide Financial. The SEC says these emails were sent from Mozilo to former Countrywide President and COO David Sambol, former CFO Eric Sieracki, and other company executives in 2006.

The SEC is alleging that Mozilo and others knew that Countrywide was on shaky financial footing, all while they told investors that mortgages were healthy and the coast was clear. In the eyes of prosecutors, the emails paint the picture of executives who knew more then they were telling the public.

EXCERPTS OF EMAILS FROM ANGELO MOZILO

Sept. 26, 2006 -- following up a meeting with Sambol the previous day about the Pay-Option ARM loan portfolio:

"We have no way, with any reasonable certainty, to assess the real risk of holding these loans on our balance sheet. The only history we can look to is that of World Savings however their portfolio was fundamentally different than ours in that their focus was equity and our focus is fico. In my judgement [sic], as a long time lender, I would always trade off fico for equity. The bottom line is that we are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales."

...

"... pay options are currently mispriced in the secondary market, and that spread could disappear quickly if there is an foreseen [sic] headline event such as another lender getting into deep trouble with this product or because of negative investor occurance [sic]."

...

"timing is right" ... to ... "sell all newly originated pay options and begin rolling off the bank balance sheet, in an orderly manner, pay options currently in their port[folio]."