Countrywide Case Study

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Countrywide Financial
Tina Munzke
Rasmussen College

Abstract
Countrywide Financial used subprime mortgages to help gain financial success and lead the country to an economic downfall. Through unethical and illegal practices, they brought subprime mortgages to an entire different level. Normally, subprime mortgages are issued to those that do not qualify for conventional mortgages. Countrywide, however found a new use for them that resulted in much success at first and then a crisis. As a result, foreclosures increased, causing the collapse of financial institutions and finally an economic recession. In 2008, Bank of America acquired Countrywide and all the fall out from their unethical behavior. In order to turn this around, it is imperative that they keep the communication lines open and transparent.

In late 2007, foreclosure rates were skyrocketing, banks were failing, and financial institutions were accepting government aide to stay in business. What brought this on? Subprime mortgages. Countrywide Financial was issuing subprime mortgages to anyone that showed even a remote interest. This resulted in the crashing of the housing market. The following will dig further into exactly what Countrywide did and the ethical issues surrounding it. Traditionally, subprime mortgages were typically offered to high-risk clients who would not qualify for conventional loans. They promoted development and allowed many minorities to own houses. When used correctly subprime mortgages were an excellent financial tool. While not everyone deserves the opportunity to own their own house, there are a lot of people that do, even though circumstances would not let them qualify for a mortgage. This is where subprime mortgages come in, and when issued to the proper people, there is nothing unethical about them. The problem comes when companies like Countrywide Financial finds ways to manipulate them to their own benefit. According to the case study, Countrywide was issuing...
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