Topics: Social responsibility, Subprime mortgage crisis, Corporate social responsibility Pages: 3 (1138 words) Published: January 27, 2013
Countrywide was founded in 1969 and was one of the nation’s largest mortgage lenders. It used to hold about 17% of all United State’s mortgage and was listed as #91 among Fortune 500 companies. I chose the case study of Countrywide because it reminds me of the powerful era of the mortgage industry and how it collapsed leading to the chain reaction of economic and financial crisis; creating almost depression symptoms in the housing market, and pushing the economy to the edge of recession. Countrywide was not the only mortgage company that seeked for continuous profits. There were other giants like Fannie Mae and Freddie Mac that were successful in creating “liar loan” while overlooking the corporate social responsibility. It seems like the mortgage giants were able to follow the first hierarchy of CSR which is the economic return, but did not consider the return of investment for long term by forgetting the importance of their customers’ needs. In short, the mortgage companies were busy grooming the wants of the customers without considering their real life situation and failing to analyze the consequences about what if situation. We shall never forget this bad financial crisis which resulted due to the greed of profit making by large mortgage corporations. Perhaps, this is one the “Great Recession” that United States economy has witnessed since the “Great Depression” of 1930’s. This is a greater lessons learned by all, that greed leads to profit, and profit leads to wounded loses. Some of the CSR problems of Countrywide presented in the case study are as follows: Subprime Loans – Countrywide was giving out loans to borrowers with poor credit history; which has a higher rate of interest. For instance, in California, a Mexican Strawberry picker with $14,000 income and hardly spoke English was lent money to buy a house for $720,000. Where was the corporate social responsibility when countrywide lent this money to someone with such low income; yet promising to...
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