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Now that the Securities and Exchange Commission is publishing
Excerpts of E-Mails From Angelo Mozilo it appears that the top executive at Countrywide, one of the companies at the center of the subprime mortgage meltdown, has problems with his e-mail rhetoric. Although he was publicly professing confidence in this company's business model, privately he was excoriating these loans as "toxic" and "poison." An e-mail from April 17, 2006 reads as follows:

In all my years in the business I have never seen a more toxic prduct [sic]. It's not only subordinated to the first, but the first is subprime. In addition, the FICOs are below 600, below 500 and some below 400[.] With real estate values coming down…the product will become increasingly worse. There has [sic] to be major changes in this program, including substantial increases in the minimum FICO. … Whether you consider the business milk or not, I am prepared to go without milk irrespective of the consequences to our production.

The "milk" metaphor was apparently a central figure in the company's discourse, as this e-mail from April 13 indicates:

"[i]n my conversations with Sambol he calls the 100% sub prime seconds as the 'milk' of the business. Frankly, I consider that product line to be the poison of ours."

In "Mozilo Was a Master at Ass-Covering," Reuters financial blogger Felix Salmon makes the obvious comparison to Enron and the legal trail of its e-mails, but he points out that there is a fundamentally different rhetorical strategy at work.

What makes this case unusual is the clarity and comprehensiveness of Mozilo's objections to the shenanigans at the company he himself was running. The man that emerges from the SEC's complaint isn't the willfully disengaged chief executive we've seen in so many other corporate corruption cases. On the contrary, Mozilo systematically sets down a record of everything that is going wrong and how it's likely to end. Over and over again, he casts himself as the worrier-in-chief, always just on the verge of changing things. To read over the SEC charges against Mozilo is to see in action a grandmaster of the most cynical of corporate arts: the cover-your-ass memo.

However, Mozilo's troubles with e-mail go beyond his role in producing the specific genre of the "cover-your-ass memo." He's known for making embarrassing mistakes about a given e-mail's addressee. As the Los Angeles Times reported in "Mozilo on distressed borrower's appeal for help: 'disgusting'," Mozilo made a critical error in hitting "reply" instead of "forward" when a borrower asked to renegotiate his loan.

In an e-mail inadvertently sent to a distressed homeowner trying to avoid foreclosure, embattled Countrywide Financial Chairman Angelo Mozilo lashed out at an online counseling service for distressed borrowers, calling the website's efforts "unbelievable" and "disgusting."

. . .

At least two other housing blogs wrote about the exchange Tuesday. On Tuesday evening, Countrywide issued the following statement: "Countrywide and Mr. Mozilo regret any misunderstanding caused by his inadvertent response to an e-mail by Mr. Bailey. Countrywide is actively working to help borrowers, like Mr. Bailey, keep their homes."

After receiving the "disgusting" e-mail comment from Mozilo, Bailey wrote a second e-mail to Countrywide, acknowledging he had consulted an online forum for advice in drafting a hardship letter to Countrywide: "In attempting to come to some way to save my home, I took the advice on forming my hardship letter from a forum. Why? Not all of us have been to a university to study business and we need some help in dealing with these matters. (perhaps, if we had, we would not have fallen for what we did, to start with).

"To have recieved the e-mail that I did, stating by one of your employees, that what I did was 'disgusting' and 'unbelievable' has been just about the final straw. I am trying to do the right thing, I am trying with every ounce of what I have left in me not to blow my brains out over losing the home I have been in for 16 years. The only hope I had left was that perhaps the countrywide company did want to help the people it is servicing ... then I receive that responce to my letter. Just great. Now I know, that it is all a nice fat laughing matter to those who are supposed to help."

Of course, there are two kinds of failures of e-mail etiquette at work in the story, since the borrower admits to cutting and pasting verbiage from another source into what is supposed to be a personally authored missive. Nonetheless, Mozilo definitely comes out looking worse in the exchange and a villain as beleaguered borrowers go online to "tell us your Countrywide story."