Mozilo Concerned About Feds' Guidance

Countrywide Home Loans chief Angelo Mozilo on Wednesday defended payment-option adjustable-rate mortgages, saying the product is performing well but that he fears new regulatory guidance on the loans will create an "unlevel" playing field that favors lenders owned by Wall Street.Speaking before the National Association of Home Builders, Mr. Mozilo said regulatory guidance that requires lenders to consider potential negative amortization when qualifying option ARM borrowers, favors unregulated mortgage bankers owned by investment bankers such as Bear Stearns and Lehman Brothers. "It has created a terribly unlevel playing field," Mr. Mozilo said, adding that unregulated institutions are not putting the product on the balance sheets of their depositories, which are regulated. (For the full story, see the Oct. 30 issue of National Mortgage News.)