Countrywide was founded in 1969 and was one of the nation’s largest mortgage lenders. It used to hold about 17% of all United State’s mortgage and was listed as #91 among Fortune 500 companies. I chose the case study of Countrywide because it reminds me of the powerful era of the mortgage industry and how it collapsed leading to the chain reaction of economic and financial crisis; creating almost depression symptoms in the housing market, and pushing the economy to the edge of recession. Countrywide was not the only mortgage company that seeked for continuous profits. There were other giants like Fannie Mae and Freddie Mac that were successful in creating “liar loan” while overlooking the corporate social responsibility. It seems like the mortgage giants were able to follow the first hierarchy of CSR which is the economic return, but did not consider the return of investment for long term by forgetting the importance of their customers’ needs. In short, the mortgage companies were busy grooming the wants of the customers without considering their real life situation and failing to analyze the consequences about what if situation. We shall never forget this bad financial crisis which resulted due to the greed of profit making by large mortgage corporations.
The Essay on Merrill Lynch – Company And Industry Background
BackgroundMerrill Lynch is one of the world's leading financial management and advisory companies, with offices in 38 countries and total client assets of approximately $1.5 trillion. As an investment bank, Merrill Lynch is a leading global underwriter of debt and equity securities and strategic advisor to corporations, governments, institutions and individuals worldwide. Through Merrill Lynch ...
Perhaps, this is one the “Great Recession” that United States economy has witnessed since the “Great Depression” of 1930’s. This is a greater lessons learned by all, that greed leads to profit, and profit leads to wounded loses. Some of the CSR problems of Countrywide presented in the case study are as follows: Subprime Loans – Countrywide was giving out loans to borrowers with poor credit history; which has a higher rate of interest. For instance, in California, a Mexican Strawberry picker with $14,000 income and hardly spoke English was lent money to buy a house for $720,000. Where was the corporate social responsibility when countrywide lent this money to someone with such low income; yet promising to recoup higher interest from such loans? This seems inhumane way of making profit by sucking up the poor and middle income people. Blind sightedness to profit maximization – Even after the housing industry began to fall apart in 2007, Countrywide managers continued to expand their loans believing in rise of bonuses almost with greed and wishful thinking on short-term profit maximization rather than long term focus on sustainable profit.
This shows the irresponsible side of the corporation who is acting in the best interest of earning money and not thinking about what if the customers are unable to repay the loans. The mortgage industry business was so blind sighted that it could not think about the societal interest but rather maximize their pockets only. Fraudulent Allegations – The aftermath of risking loans for the sole purpose of reselling the mortgages to the secondary market, misleading the borrowers with risky, costly and complex loans, etc. brought down the some top executives of Countrywide company. The U.S. Securities and Exchange Commission charged Mozilo and his two executives with fraud accusing them of misleading investors about the financial condition of the mortgage company in the months leading up to its sale to Bank of America. Due to the responsibilities and greedy mindset about the profit, the price that countrywide had to pay was highly unattractive. Not only did the company was overtaken by Bank of America, but the top executives was alleged with fraudulent charges by SEC in June 2009.
The Essay on Mortgage and Countrywide Comprehensive Home
... the banking industry. In order for Countrywide to increase profits they convinced people who qualified for regular loans that subprime loans were ... placed primarily on subprime lending and adjustable rate mortgages. Countrywide countered by saying that there were other reasons ... over the events at Countrywide and other companies that had participated in the use of subprime mortgages being so great, ...
The important corporate social responsibility lesson presented by the Countrywide’s case is that due to the irresponsible way in which mortgage industries ran their firms with the mind set of short-term profitability, without socially oriented guiding morality, some of the biggest mortgage giants have collapsed creating a domino effect in the United States and overall global economy. The one way street of making abundant profits, corporation’s decision making responsibility to protect long-term interests of shareholders add up to irresponsible level of risk; that has been successful in collapsing the housing industry bringing the burden of economic and financial crisis. Once upon a time, Countrywide was the nation’s largest mortgage lender; and today it is an embarrassment that even the remains of the name of the company has died out.
After all the government bail- out plans to help the mortgage industry, financial services and the overall economy, the U.S. economy is experiencing recession with no significant improvement in real estate business. So what are the significant issues that remain unresolved? I believe that we have witnessed the collapse of the housing market which has lead to disastrous outcomes. But, who is to be blamed? While accusing and pointing a finger to the giant mortgage industries, we often forget that the other four fingers are pointing back to ourselves. Are we so naive to keep blaming only to the financial and mortgage industries (sellers)? My understanding is that the sellers deal is only as good as the buyer is willing to pay the price for it.
Getting carried away to live the American dreams with limited earnings is a weakness that every human being is living with. We cannot just blame the corporations for strategizing to make profits, we as consumers have to make smart choices by knowing our limitations on expenditures as well. If we are busy accusing companies for making unethical decisions, let us not make the same mistake by choosing to buy their services and products, let us question their loop holes, let us become smart buyers by researching and consulting the available resources; then we can resolve the social responsibility problems half way once and for all.
The Term Paper on Topps Company Products Industry Risk
The Topps Company, among other things discussed later, is in the business of manufacturing chewing gum and confections. According to the Business and Company Resource Center, the Topps is involved in ten different industry categories. They are listed here with their respective SIC/NAICS codes: Commercial Printing (2759), Chewing Gum (2067), Candy and Other Confectionary products (2064), ...
The government has enacted by putting different bail-out plans for the companies in trouble. But, we still are experiencing recession, inflation and slow housing markets. I strongly believe that the solutions to improve big things are by starting in small ways. For instance, as a consumer we can create differences by being responsible for the debt that we own. After all, we do not want to leave the trillion dollar debt iced topped with depressing economies for our future generations. All the American citizens can help upturn the downscale economy and housing market by showing responsibilities and denying towards buying products and services that are beyond our reach and means.
While the government does what they can to help those industries in trouble, let us unite together and create more awareness on corporate social responsibilities by hosting campaigns so that we can save future companies and the overall economy from falling apart. Although all companies understand the importance of CSR and sustainability, often times it is hard to implement it. Therefore, we should use various social medias to bring such creative ideas to lime light and help save the top performing giant companies from dooming our overall future economy.
