Countrywide Financial Corporation And The Subprime Mortgage Crisis

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Countrywide Financial Corporation and the Subprime Mortgage Debacle In order to discuss the financial crisis of 2008, a person must understand the history of the mortgage industry. This case study shed light on one of the leading companies in the mortgage industry, Countrywide Financial, helping people recognize the events that led up to the crisis of 2008 by providing a breakdown of the company and showing the range of their operations (Eastburn, 2010, p. 247-262). To help people understand the crisis of the mortgage company, strategies and plans will be discussed as well as a SWOT analysis on the industry that includes financial ratios, and recommendations for the organization. By the end of this paper, there should be a better understanding of the issues that led to the financial crisis as well as some ideas that may help them get back on track. Strategies Before 1929 loans were limited to a small percentage of people, and loan terms lasted from 3 to 10 years. Lenders provided roughly 60% of the money needed to buy a home, and the buyer had to come up with the rest for a down payment. With these loans, interest payments were paid monthly while the principal amount was due in full at the end of the loan term. These amounts could be rather large and led to people having problems paying them. Between the Great Depression and terms of the loans offered, lack of payment became the normal (Eastburn, 2010). Strategies were developed to aid in the financial crisis. The
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