Countrywide Financial Summary

This paper examines and discusses the ethical issues related to the financial crisis of 2008 involving Countrywide Financial. Countrywide was founded in 1969 by Angelo Mozilo and David Loeb. During the years they evolved and became a big mortgage company who was able to make the housing market profitable for them. Countrywide provided subprime loans for people looking to become homeowners and those looking for equity to take out of their homes for upgrade repairs and etc. In the process of doing this, some of the decision that was made in funding the loans created an ethical meltdown and caused a lot of people to lose their homes and put some companies out of business.
Countrywide first opened its doors as Countrywide Credit Industries in

Countrywide profits soared, and they became the top leader in the US mortgage market. (Freeman, W., Wells, P., & Wyatt, A. 2014). Over time the people who were getting these loans had adjustable lines of credit and had no idea about how it would affect them in the coming years. When the lines of credits were ready to adjust, people would turn around and refinance to keep the lower payment but at the same time still, take money out of the house while refinancing. The ones that could not afford this loss their homes. In a seven-year span, Countrywide had a sales gain of $27.5 billion (Freeman, W., Wells, P., & Wyatt, A. 2014). Countrywide Financial generated the loans and then sold them to a third party such as Fannie Mae, FHA and private insures loans unbeknown to these third party that these loans were done under poor judgment. It was a cycle that countrywide utilized to in order for them to evolve in such a big way in a short period of time. Although as one of those individuals who received a loan from Countrywide. The problem for use was not paying back the loan. The problem was that the mortgage doubled which was outrages. We had to go back through the documents to figure out what went wrong and after trying to play back in our heads. We realized the person was talking so much we missed

People were losing their homes and had no other option to keep them. Countrywide took the money and offer no solutions to fix the issue at hand. In the same breath, Countrywide investors had no idea of what was going on and were clueless to the bad mortgage loans that were being issued to consumers and therefore they lost money as well. As for the employees of Countrywide, they had a job to do and although management knew what was going on no one stopped decided to blow the whistle on what countrywide was doing. Countrywide acted in a lawful way, buy doing what it did. However, although it was by the book it was considered to be for the benefit of the company and no other outside entity. The fraud was such on a scale that wall street played a role in stimulating the demand for the loans and made it in a way that they were fraudulent and still took them although the rating agencies sacrificed the standards for the fees they were looking to get in processing the loans. Although this happens it is also the consumer fought for not doing their due diligence prior to obtaining loans. We tend to not read the fine print or ask for outside advice prior to signing