Countrywide chief to get £115m pay-off

Angelo Mozilo, chief executive of America's largest mortgage lender, Countrywide Financial, could walk away from the near-bankrupt company with a pay-off of $115m (£59m) following its rescue by Bank of America.

The 69-year-old, who founded Countrywide in 1969, was one of the most recognisable faces of the mortgage boom in the US, defending sub-prime home loans as an important way for low-income borrowers to achieve the American dream. But he also became one of the most oft-cited villains of the credit crisis, after it became clear rising numbers of borrowers could not afford their repayments, causing a spike in repossessions and triggering a financial crisis that has rippled out far beyond Countrywide and similar companies.

Unions and corporate governance campaigners immediately criticised a severance package that entitles him to pay, bonuses and two pensions worth up to $115m, as well as continuing use of the corporate jet and payment of a country club membership for another seven years. The AFL-CIO union umbrella organisation called it a "pay-for-failure package" for an overpaid executive who took his company to the point of bankruptcy. Barney Frank, a Democrat congressman, suggested that Mr Mozilo make a multimillion-dollar donation to an organisation helping borrowers forced from their homes.

Mr Mozilo is under investigation by financial regulators over share sales in the months before the credit crisis broke and the stock tumbled.

Bank of America confirmed yesterday that it would pay $4bn to take over Countrywide, which has been struggling to stay afloat since the credit crisis began in the summer and effectively shut off its traditional sources of funding.

Ken Lewis, Bank of America chief executive, said he wanted Mr Mozilo to stay with the company until the deal was formally completed in the summer, but expected him to leave at that point. "Then probably I would guess that he would want to go have some fun," Mr Lewis said.