Risk Management : Financial Crisis

1350 WordsDec 18, 20166 Pages
Risk management changed around the world since the bankruptcy of Enron in 2001 however, it was found by many that it was still not enough since the mortgage crisis of 2007 and 2008 took place after many risk management safeguards had already been put into place. One company emerged a leader among all others in what was failing in the mortgage servicing industry. The industry had sustained unprecedented losses and could be not able to deal with the ensuing financial meltdown that was about to occur. The company is Ocwen Financial. Ocwen Financial grew tenfold during the housing crisis due to their unique positioning and expertise in the mortgage servicing industry. It became the largest non-bank mortgage servicer at a place that many banks such as Bank of America and J.P. Morgan Chase would soon be placing their mortgage servicing with. The company is publicly traded on the New York Stock Exchange and was founded and run by William Erbey until regulators removed him for committing unthinkable acts with this company forced him out. There was both pure risk and a speculative risk that was taking place. One of the greatest risk that was taking place within the area of social responsibility, which adversely affected the company stock price, which was traded at a high of almost $60 per share and now trades at about five dollars per share. Mr. Erbey one from Forbes Top 400 in the world to being taken off the list ("Forbes," 2015). Will now look at how some of the risks that
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