Mortgage Lender Replaces President
Countrywide Financial Corp. named David Sambol as its new president Friday, setting him up as the odds-on favorite to succeed longtime Chief Executive Angelo R. Mozilo at the nation’s largest mortgage lender.
Sambol, 46, replaces President and Chief Operating Officer Stanford L. Kurland, 54, who left the company Friday. Sambol was formerly the No. 3-ranking executive at Countrywide.
The announcement came about three months before Mozilo’s 68th birthday, when he has said he would step down as chief executive of the Calabasas-based company. He is expected to remain chairman.
Mozilo and Sambol didn’t respond to interview requests. Reached by telephone at his home in Hidden Hills, Kurland wouldn’t discuss the circumstances of his departure, although he noted that Mozilo had said publicly that Dec. 16, his birthday, would be his last day as CEO.
“The company is in a period of transition,” he said. “But they have a very good team -- I assembled most of the people there -- and I think they will do well.” He said he hadn’t decided what his next job would be.
In a statement, Mozilo wished Kurland well and thanked the 27-year veteran for “significant contributions to Countrywide’s success.”
He said Sambol, who has been with Countrywide for 21 years, was “an extremely talented operations executive and entrepreneur,” and called him “one of the driving forces” behind the company’s strong growth over the last five years.
The next chief executive will take the helm of Countrywide during a period of sharp contraction in the mortgage business, which experienced an unprecedented boom this decade as low interest rates and soaring home prices spurred consumers into exuberant home purchases and refinancings.
Wall Street had been pressing for details of who would take over for Mozilo, Lehman Bros. analyst Bruce Harting said. In a note to investors, he said the move was a surprise because Kurland had appeared to be the logical successor to Mozilo.
But with Kurland gone, Sambol was the obvious replacement, Harting said. Although the company is “viewed as having a very deep bench of management,” Sambol -- whose previous title was executive managing director of business segment operations -- was the only other corporate officer besides Mozilo and Kurland, he said.
Harting said the shake-up on balance might be bad for the stock, but investors did not seem overly ruffled. Countrywide shares fell 26 cents to $33.42.
However, investors have factored in their worries about the effects of higher interest rates and a slowing housing market, and shares have fallen more than 23% below their 52-week high of $43.67, set in May.
The company will have a chance to discuss the changes Tuesday during a call with stock analysts. They are likely to inquire about Countrywide’s plans to continue to grow during a downturn in the mortgage market that has forced sizable layoffs and sales of companies.
The potential strain on Countrywide from their growth strategy could be seen in its lending data from July, analyst Frederick Cannon of Keefe, Bruyette & Woods Inc. said in a report. The company’s loan originations totaled $36.2 billion during the month, down 19% from a year earlier, Cannon said. Its employee headcount was 56,029, up 13.2% from July 2005 despite having made selective layoffs.
Cannon said he was “encouraged, however, by recent comments from management ... that indicated that they would not be continuing to chase the growth with continued hiring.” He added that he wouldn’t be surprised to see significant staff reductions in the coming months.
In an interview Friday, Cannon noted that Mozilo recently dismissed suggestions that the mortgage industry might experience a “soft landing” after its boom years -- suggesting a harder fall may be coming.
“It’s going to be a tough environment out there” for Countrywide’s next chief executive, said Cannon, who also mentioned that Sambal had been impressive in presentations to analysts.
Kurland had helped oversee the company’s expansion into banking and insurance, along with its evolution from specializing in federally subsidized loans for veterans and low-income families to offering a full range of loans including prime loans for creditworthy customers and higher-interest sub-prime loans for higher-risk borrowers. It also provides second mortgages and lines of credit, allowing homeowners to cash out their equity.
As an accountant for Grant Thornton, Kurland audited Countrywide’s books in the 1970s before joining the fledgling company in 1979 as one of 120 employees. Countrywide, whose employee roster now totals more than 55,000, paid him $19.2 million last year.
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