'Where Do You Go From Here?'

The Wild West

But aren't homeowners like Jordan responsible for reading all the paperwork and knowing what they're signing up for?

"They give these stacks of papers to a homeowner, in a closing that lasts about 45 minutes, and what they do is they sit there and say, 'This is what this page says, sign here,'" Faux said.

After receiving a call from "Nightline" about the case, Countrywide offered to renegotiate Jordan's loan. The company said it took responsibility, and is offering a lower fixed rate. Jordan and his attorney want Countrywide to forgive the tens of thousands of dollars added to his principal balance under the initial terms.

Under increasing pressure to lower its default rate, Countrywide launched a program this fall to restructure the loans of 82,000 customers who signed on to mortgages they could not afford.

But Cynthia Lau, a former Countrywide loan officer, said it should be no surprise what years of loose lending have wrought.

"It was the Wild, Wild West," she said. "You've got people who were able to get homes without any money down, without having to prove their income, as long as you had good credit and as long as the market, you know, substantiated [it] at that time."

For seven years, Lau said she was one of Countrywide's biggest sellers, and that the atmosphere in the office was "very competitive."

"There was pressure and market demand," she said. "At one point, people were on hold for two to three hours, just waiting to talk to someone to get a loan, because rates had dipped so much."

'Shared Pain'

Lau said she was in the top 5 percent of Countrywide's sales force until she was fired in August of this year while she was pregnant. The next month, with its stock price plunging, the company laid off 12,000 employees — 20 percent of its work force.

"The loan programs did get a little too lenient, in my perspective," she said. "At one point, it was easier to get mortgage than it was for a car loan."

When we told her about Jordan's situation, Lau said, "I have seen that scenario pop up many times."

And the more exotic the loan, the less the customers understood them.

When asked how many of the people given these mortgages really knew what they were signing up for. Lau said, "less than half."

She also said there were incentives — trips to Hawaii or Palm Springs, for example — for the employee who sold the most loans. But as Countrywide suffers large losses, its employees are suffering too.

"We all had faith in the company stock, and it's now worth about a quarter of what it was a year ago," Lau said.

And employees aren't the only ones feeling the pain. North Carolina treasurer Richard Moore is taking aim at Countrywide CEO Angelo Mozilo, who is now being informally investigated by the SEC for selling a half million shares of company stock while its value plummeted.

"What gets me is at what point when things are going badly, and you know they are going badly, is there shared pain?" Moore asked. "I want to be fair here. This guy built the business from nothing; he deserves to be a multimillionaire. But he has taken out between $300 million and $400 million out of this company over the last few years, while they are writing up hundreds of millions of dollars of losses."

Taking the Long View

Moore, who oversees the state pension assets, said the fund has gone from $100 million invested in Countrywide to less than $10 million, through stock sales and losses in share value.

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