From a Son of a Butcher to Industry Legend

Ed Aloe (00:02):

Welcome to The Real Estate Wealth Podcast, the show about how you can build wealth by investing in real estate. I'm your host, Ed Aloe, founder and CEO of CALCAP Advisors. I'll dive deep into multi-family investing in today's current market. I'll also help you acquire the knowledge and tools necessary to generate passive income for life through discussions with friends and experts in the industry.

Ed Aloe (00:37):

Today I have the honor and privilege of sitting down with an American business legend, Angelo Mozilo. Angelo is the former founder, chairman, and CEO of Countrywide Financial. During his tenure, Countrywide became the largest private mortgage lender in the country with 500 billion per year of loan production, 62,000 employees, 900 offices and assets over 200 billion. Angelo is a well-known leader, having served on boards for the National Housing Endowment, the Joint Center for Housing Studies at Harvard University, Homes for Working Families, the Home Depot and many others.

Ed Aloe (01:21):

He also served as president of the Mortgage Bankers Association from 1991 to 1992. He was inducted into the National Association of Home Builders Hall of Fame. He is a recipient of the Ellis Island Medal of Honor, the National Housing Person of the Year, the Albert Schweitzer Prize for Humanitarianism. He received the Italian American Foundation Prize for Humanitarian Services, and also was the winner of the prestigious Horatio Alger Award. Angelo, thanks for allowing us into your beautiful home today in Santa Barbara and welcome to The Real Estate Wealth Podcast.

Angelo Mozilo (01:59):

Well, thank you. Pleasure to be here.

Ed Aloe (02:00):

So you grew up in the Bronx, Angelo. Tell us what it was like in your family and growing up in the Bronx in the 1940s and 1950s.

Angelo Mozilo (02:08):

I'm grateful that I was born and raised in New York City and particularly in the Bronx. The Bronx was a neighborhood that was primarily occupied by Irish immigrants, Italian immigrants and Jewish immigrants. So it was a very eclectic community. I learned a lot about people. It was a challenging place to live because the crime was an issue, but minor crime, not the kind of crime we have in these days, gang fights and that kind of thing. I'm very grateful to things, my mom and my dad. That really is the reason why I had the success that I had was because of them. They were fantastic parents, loving parents.

Angelo Mozilo (02:52):

My dad was a butcher in the Bronx, a small butcher shop. Had four butchers in it. I worked in the butcher shop every week on Saturdays and holidays to help my dad out. I did that all through high school, college. It was, if nothing else, an enlightening experience to deal with customers who were concerned about the quality of the chicken that I was selling to them. I learned a lot from my dad, one of the hardest working people I've ever known. He adored my mother. So I'm very grateful of the background that I had, every bit of it, the good and a bad, all helped me develop who I was.

Ed Aloe (03:36):

You began working pretty early as a young boy, probably most people can't believe, but in the mortgage business, you actually start in the eighth grade.

Angelo Mozilo (03:43):

Yeah. Because you had to be a certain age to work. I think it was 13 or something like that was when I went to work both for my dad to help him out, and during the week I worked as a messenger boy in Manhattan for various companies.

Ed Aloe (03:58):

So what drove you at that young age to get out there and start working?

Angelo Mozilo (04:03):

The need for money. I wanted to live a reasonable life and I wanted to make some money to do that. It was an opening for me to sort of do my thing even at that age. I was trying to as much as I could pay for my own education. It was tough. My mother didn't work, she was a homemaker, and my father didn't make that much money, so it was tough on them. So I thought I could help out and work a few jobs.

Ed Aloe (04:30):

Your mother was a real proponent of education and making sure that you went to college, correct?

Angelo Mozilo (04:36):

She was. My dad felt that being a butcher was a wholesome job and that I should really replace him in the little butcher shop, but I had no desire to do that. So my mother was pushing for education and I felt she was right. So I went to a Catholic grammar school, high school and university.

Ed Aloe (04:55):

So after you graduated from Fordham, Angelo, what was the mortgage business like after you had graduated from college and decided to go in that industry?

Angelo Mozilo (05:04):

It was fairly basic, not complicated as it is today. A person wanted to buy a house, you took a loan application, you got a credit report to see if they're credit worthy, got a verification of employment to make sure they're employed, make sure they had money in the bank for the down payment, and then you filled out the government form to get the final approval from them. It was a cumbersome process, but that's the way it worked. Pretty simple, pretty straightforward. Everybody knew the rules. Mortgage banking was a relatively small industry for homes. Banks did most of the lending for mortgages.

Ed Aloe (05:42):

After college you ended up moving to Virginia. When you went to Florida, you felt there was a gold rush going on at the time. Can you kind of explain what happened when you moved to Florida and what you meant by that gold rush?

Angelo Mozilo (05:55):

Well, when I was working as a messenger boy, I was working for a mortgage company in Manhattan. I hustled, I worked hard. The head of that mortgage company was a gentleman by the name of Edwin Katz. I guess he liked what he saw. So he introduced me to a fellow by the name of David Loeb who eventually became my partner. David Loeb lived in Virginia. He had a small mortgage operation and he asked Katz to have me go down there and build that mortgage operation for him. That's how I got to Virginia. Subsequently, they started operations in Florida in Orlando and had everything to do with Cape Canaveral and the rocket ships and it was a rush to Florida by consumers to buy homes.

Ed Aloe (06:41):

So it was really the advent of the space industry kind of just taking off and getting started down there that caused that gold rush boom?

Angelo Mozilo (06:49):

Orlando, the largest town in near Brevard County where NASA was. So Brevard County started to grow. Again, government coming in, astronauts, engineers living and coming in. So it became a very vibrant operation there. Of course, it's relatively common for hurricanes to occur in Florida. We had a major hurricane, flooded all the projects. We had to work our way out of that and we did. Again, people started to come in again. So the Brevard County, Orange County, which is Orlando, began to really blossom. I was fortunate to be there at the time it was blossoming.

Angelo Mozilo (07:34):

When you have a rush into an era of people and companies and it's sudden, well, bottom line it's dangerous because could this thing be overdone? In fact, well, NASA keep on sending rockets to the moon plus the flooding. They had a lot of challenges where I had to shrink the company down for a while and grew it back up because a lot of builders went bankrupt because of the storm. The community fully understood that we were committed to the area, we were not going to leave it, and we'll get through the problems with the hurricane and get through the flooding, get through all that. It took time, it took patience, and to some degree it took a belief that it was going to be over and things were going to be good and it did. It turned out that way.

Ed Aloe (08:24):

That's when you kind of reconnected with David Loeb in 1969, formed Countrywide Credit Industries at the time? Is that right?

Angelo Mozilo (08:35):

That's correct.

Ed Aloe (08:36):

Sort of what was the impetus between you and him getting together to partner to start this new mortgage company?

Angelo Mozilo (08:41):

I was never disconnected in terms of our relationship. He's 15 years old than I was. He needed energy, and he needed, in terms of the organization, needed someone who'd move the company in a direction he wanted to go and he thought I was the person to do that. So he asked me to move from Florida to Virginia, Virginia Beach, and I did. I was young. By that time in Florida, I had two children and we worked it out and became very formidable at that time, even if relatively small, we moved forward in the mortgage industry as a mortgage banker. So we just went on from there.

Ed Aloe (09:21):

Right. It was always kind of thought or described that at least Countrywide in later years, David was the behind the scenes partner and Angelo was the face of the company. Did you guys kind of see it that way early on?

Angelo Mozilo (09:36):

David was a very smart man, but he wasn't one that would like to be giving speeches out in public or promoting the company, doing what it took to grow the company. He'd like the inside, the operations, and dealing with, again, the complications that began to develop in terms of the financing of homes and dealing with the secondary markets. He had a whole industry of options in terms of financial options and he liked being involved in that and he was fairly creative in that arena. Didn't necessarily like being in the public affairs. So that's how it developed, sort of by nature by default.

Ed Aloe (10:15):

So it worked out because you each had your skillsets that were very complementary, it sounds like?

Angelo Mozilo (10:20):

And respected each other. He respected my ability to grow the business, to bring in customers, respected that part of it. I respected his arithmetic, mathematical and equation skills. He was very well-versed in the financial markets and liked it. So I had the benefit of his efforts in terms of finding relatively reasonable financing. We took the company public. He was very helpful in that. But we both did that together. But he's the one that had to go to Wall Street and do a lot of the negotiations on the Street while I tried to run the company and the operations. That's how it was bifurcated.

Ed Aloe (10:59):

So from 1969 then over the next call it 15, 20 years, you guys grow Countrywide into the largest, or if not the largest at the time, successful mortgage companies in America and so you become a high profile CEO. Tell me about that expansion. I mean starting with David as your partner in 1969, call it 20 years later, 1989, Countrywide is virtually a household name. You're across the country. How did you guys expand?

Angelo Mozilo (11:28):

When it came to growing the company, I played the major role in growing it, hire thousands of people over time. I had a basic rule, and the rule was I had to hire, everybody I had to hire had to be smarter than me, which wasn't that difficult, by the way. So it was a big focus of mine. I always felt I was hiring another CEO. So the quality of people that was brought into Countrywide was a very high quality as a result.

Ed Aloe (11:57):

Yeah, I agree. I mean, it was always respected for the smart people that were definitely on your team. Tell me about the culture and kind of the work ethic of Countrywide and how you fostered the culture there.

Angelo Mozilo (12:11):

If you look at all the elements needed to have a successful company, one of the major elements is working hard, having a whole team that understood the value of hard work. That's what I promoted primarily by doing it myself. I worked very hard. I worked seven days a week. Had no time for family or in some respects I regret that, but I should have spent more time in family. Coming from the kind of background I came from, family with very little money, I always had a fear of not having money.

Angelo Mozilo (12:47):

So that caused me to work very hard, that I was doing everything possible to earn as much money as I possibly could. So that caused me to do a lot of things in the development of Countrywide. That was always a primary issue with me. I had to beat the competition. I need smart people to do it, talented people to do it. I'd look around, survey the industry constantly to see what the best talent was and see if I could get them to come to work for Countrywide. The culture again was hardworking, smart people, innovative. We're a very innovative company because financing became much more complex and you had to be innovative in how you finance the company, how to finance the business itself.

Angelo Mozilo (13:28):

I also enjoyed people outside of the business. I became very friendly with the head of Fannie Mae and Freddie Mac and the people not connected directly to the mortgage industry, to the mortgage banking, but people who supported it. So I spent a lot of time developing relationships with them because one, they were smart, and they were important to the future of the company, the relationship. So I worked hard on those relationships to secure the future of the company. The cornerstone of mortgage banking, if you think about it, is really creating an opportunity for people who wanted a home of their own to make that hope a possibility and a probability. It was that quest that drove me every day.

Ed Aloe (14:21):

It's the major way most people build wealth in America is the opportunity for home ownership.

Angelo Mozilo (14:27):

Exactly right. So it was very satisfying to be a part of that process, be part of helping people make the most major decision in their lives and help them to a point where they're appreciative. I don't think there's many businesses where the customers write to the CEO or to the people in the company thanking them for giving the opportunity to participate. That's what drove me is to make people happy. I like making people happy because it made me happy.

Ed Aloe (15:00):

Yeah, and not only helping Americans achieve that dream of home ownership, but you also, Countrywide, I read had probably during your tenure about 250,000 employees, which is an astounding number to me. A lot of them as you know went on to create their own successful mortgage companies and really build the industry.

Angelo Mozilo (15:21):

Countrywide employees have done extremely well. Not only from the wealth they gained from their ownership of Countrywide stock, but have done well in terms of carrying the mission further. Many have started their own mortgage companies, became competitors. That's very satisfying to me. The basis by which these people are able to progress in life and have a good life. Much of what I do today at 84 years old is looking for the opportunity where I can help others achieve their dreams.

Ed Aloe (16:00):

So Angelo, getting back to the '90s, early 2000s, you were a regular on CNBC. Baron's named you one of the top 30 CEOs in the world. Fortune Magazine recognized Countrywide, its list of most admired companies. I feel like you are really kind of the founding father, not only of Countrywide, but really of the mortgage banking industry as we know it today as a result of having these great driven employees, which many of them went on to do their own great things as well and become wealthy. I mean, you're kind of almost a rockstar in the business sense. The hard work and vision you had as a young boy and a young man came to fruition. But I'm just curious what those times were like for you in the late '90s, early 2000s.

Angelo Mozilo (16:45):

I was very appreciative of their recognition that I received within the industry and maybe even outside of the industry. And also a built-in fear, this period of life that I was enjoying was not going to last. Realization that those things just don't go on forever for a lot of reasons. I lived in it with a sense of gratitude and a sense of fear simultaneously. You get these superstars in sports, they're going to get old and it's going to go away and you have to deal with that. You have to be mature enough to say, "Okay, this is life. This is what happens in life. I'm going to do everything I can to see that ends well. But there are things I just can't control."

Ed Aloe (17:32):

Yeah, it's interesting that you mentioned having fear that also drove you in there period because nobody would've sensed it, seeing you on TV obviously. It' kind of like you mentioned when you're on top, Countrywide was at the top of its game and you were at the top of your game, that means every competitor's trying to knock you off that pedestal. As you know, when you're number one, there's only one direction you can move, right? So you have that constant being number one to keep that going and it's a stress.

Angelo Mozilo (18:01):

it's a challenge. It's a reward, but it's also a punishment because it's fun. It's nice being, believe me, being honored and being respected and given awards and being on TV. It's all nice. I don't know if my partner would've enjoyed it as much because he had a different kind of ego than I had. I was being satisfied because I was getting a lot of recognition. I was very lucky in a lot of respects. Lucky to have the parents that I had. Lucky to have the most fabulous wife to support me, five fantastic children. So I had a lot to be grateful for and I am grateful.

Ed Aloe (18:38):

So Angelo, let's talk a little bit about the foundation that you started. I know you're very philanthropic. You love to give back, you love to help other people. Tell us a little bit about the Mozilo Foundation and what you're working on there.

Angelo Mozilo (18:52):

I mean, the one thing nobody wants to see is children being abused, children not having opportunity because the situation they were born into, they had no control over. So the foundation is designed to do a lot for children, a lot for the disabled, a lot for veterans. Its purpose was to provide a vehicle by which the Mozilo family can share the advantages that we had with other families and with organizations that we support. It's ultimately designed so that my children can use it when I'm gone as their vehicle for continuing doing the work the foundation was founded for, to help others who can't help themselves.

Ed Aloe (19:36):

I read the foundation has a Latin name to it, ex granis fit acervus, hopefully I pronounced that correctly, which means many grains make a heap. Can you explain what that means to you?

Angelo Mozilo (19:49):

Right. I didn't create that saying, by the way. It's part of what's been written before by others. It's generally small things you do over your life that have major impact on society. They look small individually, but collectively it's profound. That's basically what each grain eventually becomes a heap. I want my kids to understand little things they do, they keep on doing good things, little things, they'll eventually be very powerful and profound over time. Just stay at it, don't give up, never give up. Just keep on doing the same thing that's having positive impact on people and it'll eventually have major impact. That's really the story of my life.

Ed Aloe (20:37):

Right. Like the old saying that a journey begins with the first step. I think the grain metaphor is a really powerful one and I love that for the foundation. Tell us today, what's the typical day in the life of Angela Mozilo right now?

Angelo Mozilo (20:54):

I try to read books that are going to enlighten me about life, enlighten me about the world, enlighten me about politics, particularly what's going on today's world, it's unbelievable, what's happening in the Ukraine, what's happening in Russia. These are very dramatic times for the country. So this is a very different time for American people and for the world. You read very little about good news, it's always bad news. Pick up any paper, the headline is bad.

Angelo Mozilo (21:25):

So I try to keep up with that to keep me grounded, to tell me what's happening in the rest of the world, what they're thinking versus what we're thinking. It just keeps me enveloped in world events and trying to figure out how is this going to impact, first of all, my grandchildren, my children, my family and the American people. I love this country. I'm so grateful for my grandparents coming here and giving me an opportunity. But there are a lot of fractures now in the fabric of the country that concern me. So I want to stay up to date on what's happening, why it's happening, and try to do whatever I can to help.

Ed Aloe (22:22):

So given your experience and your age and looking back and still keeping relevant, because obviously you are reading and up to date on everything, are you still optimistic about the country? Where do you see us today?

Angelo Mozilo (22:33):

I'm optimistic about America because it's a resilient country and a resilient people. So I always hold on to the hope and the belief that the country will right itself eventually. If I want to ever cure myself, if I'm really pessimistic, I ask myself, "Where else do you want to live?" I want to live here. That's where I want to live. The major challenge is to respect and to promote capitalism. The problem is we're no longer purely a capitalistic society when the government tries to dictate what a company should make, what it can't make, and when they start to interfere with the capital structure of the nation.

Angelo Mozilo (23:27):

So we got to hope and pray that their attitude towards the capital structure of the country becomes more positive and become cheerleaders for capitalism. The reason why we're superior to every place else in the world, because we're capitalists. That's what builds nations, that's builds countries as what builds population is capitalism, not communism, not socialism. It's never worked in the history of mankind. It's never worked. Capitalism works and that's what we got back to in my humble opinion. I'm sure a lot of people would tell me to go screw myself but.

Ed Aloe (24:04):

I agree with you Angelo that capitalism definitely has made this country great and it does seem like we're at a tipping point right now where there is more and more of an attitude towards socialism. I feel that a lot of that has to do with the fact that the middle class has been shrinking for many, many decades and that divide between the haves and the have-nots has grown very wide. Anytime that happens, we've seen it in various nations across the world, it can lead to instability and chaos. But as dire as things are here, I still feel that we're the cleanest dirty shirt, if you will, in the closet when you look around the rest of the world.

Angelo Mozilo (24:43):

Right, no question.

Ed Aloe (24:44):

This country is still the greatest country to live in.

Angelo Mozilo (24:46):

No question. We'll figure this out over time. We'll make it better.

Ed Aloe (24:57):

So let's talk about the family for a minute if we can shift gears. Today, everyone is concerned about life-work balance, all the stuff that really wasn't talked about back then when you were CEO, and even myself and building CALCAP, I always kind of struggle with, "Okay, am I spending enough time with my kids?" Because we all get caught up when we love what we're doing and building something. I know back in that day you were on the road a lot when your kids were growing up and your wife was kind of home manning the ship there. You had mentioned regrets. I'm just curious kind of when you look back, would you have done anything differently or not?

Angelo Mozilo (25:36):

Understanding my personality and what drives me, I probably wouldn't have done anything differently. I should have. I regret that I didn't, but thank God I had the wife that I had because she created part of the balance that I should have provided. She did that. I traveled probably 70% of my life was on the road, countrywide, all over the world and she had to pick up the pieces and she did a magnificent job. So I'm grateful to her.

Ed Aloe (26:11):

There're old saying that behind every successful man, there's an equally strong woman. She left five children, 11 grandchildren behind.

Angelo Mozilo (26:21):

Correct.

Ed Aloe (26:22):

Tell us about Phyllis.

Angelo Mozilo (26:24):

Phyllis was a very kind person, very mature in terms of what her priorities were. We lived on the same street. She lived in an apartment house. I lived in a two-story rental house and just really met on the sidewalk and it went on from there. We dated and ultimately got married. Her priorities were her children. They came first. I learned that the hard way. She knew what her goals were and the children had the utmost respect for her because of who she was. She was honest, always honest, and she was a great partner for me because a lot of what we do, CEOs, are social occasions and she was perfect because she was just kind and sweet and the kids picked up on that. I never had anybody come to me, five children, and say, "Mom's mean." Never.

Ed Aloe (27:25):

Yeah, no. I've heard that from your kids and some of your grandkids who I happen to know felt the same way about Phyllis. Tremendous, tremendous woman.

Angelo Mozilo (27:33):

I know I wouldn't have been successful, as successful as I was without her. She was the cornerstone for me. She was my rock. She was the one I could depend upon.

Ed Aloe (27:44):

Angelo, one last question and this has been great. Describe your legacy. How do you most wish to be remembered?

Angelo Mozilo (27:51):

I want to be remembered as a nice guy who did his best. That's what I want to be remembered, a nice guy who did his best.

Ed Aloe (28:01):

That's great. That's simple and beautiful. I love that. Anything else you want to say that I didn't ask?

Angelo Mozilo (28:07):

I want to make sure that everybody understands that it's all up to you. America is a blank canvas. You could put any kind of painting on it you want and it's not going to resist what you want in terms of your future or your family's future. In America, anything is possible. That's what I try to tell young people when I speak at schools, that they're fortunate to be in this country because their dreams can become reality.

Ed Aloe (28:40):

Angelo, thank you for sharing your stories and wisdom today and allowing us to share your amazing story with you.

Angelo Mozilo (28:46):

I thank you.

Ed Aloe (28:47):

You look great, by the way. God bless you.

Angelo Mozilo (28:50):

Thank you. It's makeup. It's all makeup. Thanks again.

Ed Aloe (28:57):

I hope today's show inspired you just a little bit. I would like to thank my guests again. I'm excited to bring you more episodes with interesting and informative experts to help you navigate your way to wealth and real estate investing.

Credits (29:15):

Thanks for listening to The Real Estate Wealth Podcast. The Real Estate Wealth Podcast is produced by Gusto, a Matter Company. Our producer and audio engineer is Jeanette Harris-Courts, with support from Gabe Gerzon and Susan Rangel. Maya Laperle is our writer. For show notes and more information about this podcast, visit edaloe.com. For more information about CALCAP Advisors, visit us at www.calcap.com or follow us on Twitter at CALCAP Advisors.

Ed Aloe (29:53):

I'm your host, Ed Aloe, and thank you for listening.