Business Ethics -- Countrywide Financial

 Business Integrity - Countrywide Financial Composition

In a narrative structure, discuss the key facts and critical problems presented in case. Word depend: 158

State Financial began in 69 and by 2k was one of the nation's major lenders (Ferrell, 2010). In the late 1990's and early 2000's, Countrywide Economic offered subprime mortgage loans. Subprime mortgage loans had been loans which were offered to folks who would not typically be able to are eligible for conventional loans because of profits, lack of credit or low credit score. As a result of structure of such mortgage loans, persons found it hard to make obligations when the economy slowed down. The real estate market as well as the economy was negatively troubled by the large number of individuals who were struggling to make repayments on their home loans. Countrywide Financial's earnings were positive till 2007, when the economy stunted and real estate prices decreased. In 2008, Bank of America bought Countrywide Economical. Bank of America experienced more resources that could manage the turmoil, and Lender of America would be able to deal with the ethical investigations including Countrywide's suspect lending techniques.

Reference:

Ferrell, To. C. (2010). Business Integrity: Ethical Making decisions and Situations, 8th Male impotence., Cengage Learning

What had been the offers for State to write so many subprime loans? Word count number: 168

Across the nation Financial benefited financially via offering subprime mortgage loans. Considering that the interest rate, charges and terms of subprime mortgages are usually higher than typical loans, the lenders are able to cash in on this type of loan (Moulton & Bozeman, 2011). Between 1982 and the year 2003, Countrywide reported substantial profits, and the offered profitable comes back on share investors.

By offering mortgages and loans to borrowers who does not typically qualify, the fees and interest had been collected coming from thousands of consumers with this sort of loan. Additionally, they extended mortgage privileges into a large amount of the population who would not really...

References: http://www.federalreserve.gov/boarddocs/speeches/2004/20040521/default.htm(accessed 10-26-2012)

Ferrell, O. C. (2010). Organization Ethics: Honest Decision Making and Cases, 8th Ed., Cengage Learning

In the event that you where CEO of Countrywide Economic, how do you have methodized the assessments of sales agents to prevent all of them from producing loans to anybody without following certain guidelines on income, assessments, and documentation?

Word count:

I believe that basically were CEO of Across the nation Financial, I might have organised the reviews of salespeople by cautiously evaluating their very own education and experience. I would personally also expect their managers to evaluate the loans which can be processed inside their department. The managers as well as the employees would be expected to stick to specific rules on bank loan approval, plus they would know that they can would be held responsible for any infractions against the guidelines.

Countrywide Monetary had used offering " liar loans”, which were financial loans in which the loan officer required no proof upon income or employment (Ferrell, 2010). I feel that this practice is dishonest because somebody with minimum income cannot afford to pay back credit; therefore , it could be inevitable the property can be involved in home foreclosure. If I had been CEO of Countrywide Financial, I would prohibit such business practices not only to protect the organization, but also to protect the consumer.

Reference:

Ferrell, O. C. (2010). Organization Ethics: Honest Decision Making and Cases, 8th Ed., Cengage Learning

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