Countrywide reacted to the crisis, but reacted slowly.
How to Write a Summary of an Article? Countrywide Financial Countrywide Financial: The Subprime Meltdown Course: MAN Team or Group: The Subprime Meltdown Questions: Are subprime loans an unethical financial instrument, or are they ethical tools that were misused?
We believed subprime loans are ethical tools that were misused. What made subprime loans so attractive was the fact that it enabled low-income individuals and minorities no qualifies for regular loans to have access to homeownership.
In the right hands, in the right time, a subprime loan could signify an important tool for different minorities to improve the quality of their lives by obtaining financing for more than just home mortgages but also school tuition, for example Iacono. However, as the Countrywide Financial case illustrates, there is wide misuse of this tool by institutions that engage in indiscriminate lending for the sake of short-term profits at the risk of major financial downturn, as in the financial crisis.
Ferrell et al Moreover, while lending money to low-income and minority families justifies a higher interest rate due to the risk of debt default, lending money to families that would very unlikely be in the capacity to fully repay their mortgage is a threat to both the financial institution — who would had lost the invested money — and the borrowers who would be forced to face foreclosure; but even more threatening were the endless securities backed on these subprime loans, whose real risk were only known by Countrywide Financial.
By deciding to lend money indiscriminately, this company ended up misusing a financial instrument that would have otherwise brought on progress for its customers and the company itself.
Discuss the ethical issues that caused the downfall of Countrywide Financial Different ethical issues caused the downfall of Countrywide Financial including unethical actions of both the company and the borrowers.
Borrowers were told that they would not get negatively affected with an increasing interest rate as the value of their property would increase accordingly. Nonetheless, when the recession came many of these borrowers discovered they were unable to pay. Ferrell et al Schumer and Representative Henry A.
However this fact only seems to prove that Countrywide was helping borrowers falsifying information in order to secure the loan.
Ferrell et al 3. In addition to this they should make sure that the required information is being promptly provided to pertaining authorities. Moreover, Bank of America should ensure that a proper risk management policy is set up, continuing as well with programs to ease loan terms and prevent borrowers from losing their homes, such as the Countrywide Comprehensive Home Preservation Program which helped consumers refinance their debt.
Ferrell et al In conclusion, Bank of America should continue with their current actions whilst making sure the authorities are getting the information necessary to reach the bottom of what really happened at Countrywide Financial, and thus prevent this situation from ever happening again.
Works Cited Ferrell, O. Ethical Decision Making and Cases.Countrywide Financial And The Subprime Crisis Case Study: Countrywide Financial and the Subprime Crisis In the early s, Countrywide Financial was the largest provider of home loans for borrowers, with one.
The Causes of Subprime Mortgage Financial Crisis Essay Words | 9 Pages. The Causes of Subprime Mortgage Financial Crisis By Jessica Tian Abstract The U.S.
subprime mortgage crisis was a set of events that led to the financial crisis, characterized by a rise in subprime mortgage defaults and foreclosures. Free Essays on Countrywide Financial The Subprime Meltdown for students. Use our papers to help you with yours 1 - The truth is rarely pure and never simple essays research papers manggagawang mag aaral lord of the flies essay conch symbol countrywide financial the subprime meltdown essay help essay on social contract complete your dissertation brenda ueland essays on the great message for a materialistic person essay essays for patrick atiyah portland.
Countrywide Financial: Subprime Meltdown Ethics Countrywide Financial: Subprime Meltdown Ethics Mandi Hash Acct 81E – Krupka, Joseph Abstract “Not long ago, Countrywide Financial seemed to have everything going for it.
Cofounded by Angelo Mozilo in , by the early s it had become the largest provider of home loans in . Countrywide Financial is an institution for the lending of money in the form of mortgages and other financial instruments such as subprime loans.
During Countrywide's peak profit years, the majority of the profits were generated by subprime loans.4/4(1).