Strategic Management: The Quest for Competitive Advantage‚ Second Edition II. Cases in Crafting and Executing Strategy 15. Countrywide Financial Corporation and the Subprime Mortgage Debacle © The McGraw−Hill Companies‚ 2011 Case 15 Countrywide Financial Corporation and the Subprime Mortgage Debacle Ronald W. Eastburn Case Western Reserve University Angelo Mozilo‚ founder and Chairman of Countrywide Financial Corporation‚ was the driving force behind the company’s efforts to become
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Countrywide Financial Debacle Countrywide Financial Corporation was a mortgage lending giant founded by Angelo Mozilo and David Loeb in 1969. With a long history‚ it was at the height of its success during the mortgage boom from 1994 – 2006. The mortgage debacle began in 2007 and drastically changed the future of Countrywide Financial. Many issues related to Countrywide’s business practices resulted in the company’s failure as well as the subprime mortgage market collapse as a whole. Countrywide
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Introduction Countrywide Financial Corporation projected being the largest real estate mortgage company in the United States. In 1969‚ Angelo Mozilo and his partner David Loeb‚ founded Countrywide in New York with the vision of providing a diversified real estate lending service. The company’s intentions were phenomenal as well as the initial profitability; however‚ unethical behavior took place within the company causing a huge loss. The predatory lending actions relied on fraudulent and misconduct
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In a narrative format‚ discuss the key facts and critical issues presented in the case. Word count: 158 Countrywide Financial began in 1969 and by 2000 was one of the nation’s largest lenders (Ferrell‚ 2010). In the late 1990’s and early 2000’s‚ Countrywide Financial offered subprime mortgage loans. Subprime mortgage loans were loans that were offered to people who would not ordinarily be able to qualify for conventional loans because of income‚ lack of credit or low credit score. Because
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Countrywide Financial: Failure of Corporate Governance‚ Incentive Compensation‚ & the Sub-Prime Crisis Executive Summary: Countrywide Financial was a mortgage-banking firm. They had one of the largest market shares in the early 2000s‚ when the mortgage market was booming. “No company pursued growth in home loans more aggressively than Countrywide” (NY Times 12/10). They were the leader of their industry‚ with 500 billion in home loans‚ 62‚000 employees‚ 900 offices‚ and
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Jessica Reupke Case 28 10/9/11 1. Did subprime mortgage loans contribute to the housing bubble? Why did the bubble burst? What were the consequences of the housing bust to borrowers‚ loan originators‚ and MBS and CDO holders? Subprime mortgage loans contributed to the housing bubble as they enabled the expansion of homeownership by offering loans to a wider variety of borrowers‚ particularly those with a low credit score‚ small down payment‚ or high debt-to-income ratio. This expansion increased
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Countrywide Financial: The Subprime Meltdown Course: | MAN3065 | | Team or Group #: | 8 | Date submitted: | 02/27/13 | Reference#: | 726077 | | Term: | 2012-2 | | Days: | M & W | | Time: | 7:05pm – 8:20pm | | Prof: | Hoa N. Burrows‚ CPA | Countrywide Financial: The Subprime Meltdown Questions: 1. 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
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Case#8 Countrywide Financial: The Subprime Meltdown Questions: 1. Are subprime loans an unethical financial instrument‚ or are they ethical but misused in a way that created ethical issues? The Countrywide Financial case showed subprime loans easily contribute to unethical behavior. I think the idea of the loan isn’t unethical in itself‚ but the way it was packaged. If you take away the fraudulent behavior‚ the idea of a subprime mortgage isn’t too corrupt. Subprime borrowers generally have bad
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The HealthSouth Debacle: A Legal and Ethical Perspective Jay Buntemeyer Regis University Abstract HealthSouth Corporation is the largest operator of rehabilitation hospitals in the United States. Since the company’s inception in 1984‚ HealthSouth has garnered the attention of Wall Street and millions of investors. However‚ the attention was because the iconic HealthSouth was involved in one of the largest accounting fraud scandals in United States history. HealthSouth’s founder and CEO‚ Richard
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Countrywide Financial September 26‚ 2013 “Countrywide Financial‚” cofounded by Angelo Mozilo‚ was known as one of the most successful financial companies in the beginning of the 21st century. The cofounder had a solid business philosophy; to help low-income individuals and minorities. “Countrywide Financial“ was the largest home loan provider in the United States‚ with one out of six loans provided by the company. Angelo Mozilo believed that every American had the right to own a home
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