No one is more the face of the financial crisis than Angelo Mozilo. The complaint by the Securities and Exchange Commission sheds some light on Mozilo's Countrywide Financial. While the public face of the company was pushing the "benefits" of homeownership for all, the private e-mails show a company scrambling to deal with "toxic" assets.

As we've learned, one of the most toxic were the payment option ARM loans. In one e-mail exchange dated September 26, 2006 Mozilo writes, "The bottom line is that we are flying blind on how these loans will perform in a stressed environment of higher unemployment, reduced values and slowing home sales." Trouble for us is that these loans continue to have high rates of default and are a source of uncertainty in the financial markets. It appears Mozilo saw the handwriting on the wall, writing in 2006, "timing is right" to "sell all newly originated pay options and begin rolling off the bank balance sheet."

Countrywide's business model was to sell off its risk. Fannie Mae and Freddie Mac purchased risky Countrywide-packaged loans for fear of losing market share and "becoming irrelevant." Housing economist Tom Lawler says it was Countrywide's decision to hold onto its second liens and piggyback loans in its savings branch that proved disastrous for the firm.

The Securities and Exchange Commission says Mozilo's mistake was keeping investors in the dark while at the same time exercising nearly $140 million worth of stock options. (Read the SEC charges.)

Mozilo's attorney calls the SEC charges "baseless," and that the e-mails don't tell the whole story. But we are beginning to see the "whole story" unfold, from what happens when risk is divorced from a loan and a lender doesn't care whether or not a homeowner can afford to pay back a loan.