Mozilo, a butcher's son, became mortgage king

By Tim McLaughlin

NEW YORK (Reuters) - In the early days of Countrywide Financial Corp CFC.N, competitors underestimated Angelo Mozilo, the mortgage lender's founder.

Mozilo, born in 1938, the son of Italian immigrants, recalled decades later how some in the white patrician world of mortgage banking judged him disparagingly because of his dark brown skin.

But through grit and hustle, Mozilo, the son of a Bronx butcher, built Countrywide into the largest mortgage lender in the United States.

Mozilo founded Countrywide in 1969 and became one of corporate America's top-paid executives. Mozilo received about $387 million from pay and stock option gains from 2002 to 2006, U.S. regulatory filings show.

Yet on Friday, he agreed to let his company be taken over by Bank of America Corp (BAC.N) in a $4 billion deal which comes days after Countrywide's shares were pummeled by bankruptcy rumors.

Mozilo pushed the once dominant U.S. mortgage lender into a liquidity crisis by relaxing lending standards on risky subprime loans.

Escalating defaults and falling housing prices conspired to squeeze Countrywide and other lenders while sapping the U.S. economy.

Mozilo has been criticized for unwinding his stake in Countrywide throughout the housing downturn, using a prearranged trading plan to cash in tens of millions of dollars worth of stock options.

Mozilo's employment contract runs through the end of 2009, when he will be 71 years old.

But Bank of America Chief Executive Kenneth Lewis said on Friday Mozilo was unlikely to play any management role after the takeover is completed.

"I would want him to stay until the deal gets done," Lewis said, "and then probably I would guess that he would then want to go have some fun."

HEALTH BENEFITS FOR LIFE

Countrywide's board has paid Mozilo far better than top executives at much larger financial institutions.

In 2006, for example, Mozilo's pay -- $48 million -- topped that of JPMorgan Chase & Co Inc (JPM.N) Chairman and Chief Executive Jamie Dimon ($38 million) and the $28 million Bank of America paid Lewis.

Mozilo could receive about $36 million following the Bank of America sale, according to regulatory filings and compensation experts interviewed by Reuters.