Financial Loss

countrywide Financial Debacle countrywide Financial sess was a mortgage lending giant founded by Angelo Mozilo and David Loeb in 1969. With a long bill, it was at the height of its success during the mortgage shoot from 1994 2006. The mortgage debacle began in 2007 and drastically departd the future(a) of Countrywide Financial. Many issues related to Countrywides blood practices resulted in the companys failure as wellhead as the sub bang mortgage market collapse as a whole. Countrywide had an extreme change in its business dodge as the housing market changed from 1994 through 2008. It went from providing mainly prime mortgages okay with high underwriting standards to a relaxed environment of little accompaniment and spoiled business practices. The main issue for Countrywide was this melodramatic change in st localisegy that did not adequately valuate the insecurity associated with its business practices and turned a blind spunk to unethical business behavior. Relaxed underwriting standards that did not require customers to verify income or go through a full credit history throw were the beginning of the markets problems. Countrywide al misfortunateed customers to be approve for a bestow they could not realistically afford or have loans on multiple stems at one epoch that they could not adequately cover.

Adjustable rate mortgages that increased by and by the initial low interest rate period allowed customers to purchase phratrys they would never be able to pay for. Many customers had plan on flipping the stead or counted on the home quantify increasing affluent that t hey could sell the home before the rate incr! eased to a point they could no longer afford. In 2004 Countrywide greatly increased the amount of subprime loans and no-down-payment loans. Customers could purchase a home with no down payment and also gather up a home equity loan for 20% of the homes pry. This resulted in inadequate collateral for these types of loans that were depending on the value of the home to increase. Once...If you extremity to get a full essay, install it on our website: OrderCustomPaper.com

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