Mozilo said he continues to believe the housing downturn will take the U.S. economy into a recession.
"I still think so, I've been proven wrong so far," he said. "But I can't believe when you're having the level of delinquencies, foreclosures … that this doesn't have a material effect on the psyche of American people and eventually on their wallet."
"It seems to me, I don't see a light here at the moment," Mozilo added. "Something could happen that could change that overnight, but it appears to me we've got a way to go to work our way through."
CEOs are media savvy people; they understand the market listens to their every word. As such, they are usually very optimistic, or at least very obtuse to prevent straight-forward analysis. When a CEO uses the word recession, it's an important event. Whether it happens or not is a different story. However, if he's thinking about it, he's also preparing for it.
But at the same time, the chief of the largest U.S. mortgage lender remains cautious towards the current state of the industry.
"This environment is certainly not getting better," he said. "Something tomorrow could turn it around, but this is a first step in series of steps we're going to take."
See the point above. Now, it's possible he's overstating the case in order to get the Federal Reserve's attention in order to prompt the Fed to lower rates. Remember this is a very powerful CEO with lots of connections and clout. However, it's also possible the conditions are exactly as he says they are, so the market are still hurting.