Description
Discuss the story of Countrywide, an organization that was also a big player in the subprime market. How does Countrywide compare to New Century, particularly in time frame and facts. Describe your thoughts on why one company had a “happy ending” and the other did not.
Explanation & Answer
Attached.
Running Head: COUNTRYWIDE AND NEW CENTURY FINANCIAL
Countrywide and New Century Financial
Name
Instructor
Institutional Affiliation
Date
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COUNTRYWIDE AND NEW CENTURY FINANCIAL
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Story of Countrywide
Countrywide Financial was founded in 1968 by David Loeb and Angelo Mozilo. In 1992,
the company was regarded as the largest source of single-family mortgages in the country,
offering approximately $$0 billion in mortgages per year. However, just as increasing rates had
crumpled the S&Ls years before, so did declining interest rates turbocharge the company’s
growth. Lower interest rates assisted more individuals to afford homes. Nonetheless, the
company started an advertising approach that enabled individuals who already owned homes to
utilize the lower rates. This advertising approach was known as Refinancing technique (Soros,
2009).
On its way to becoming one of the largest mortgage lende...
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