Countrywide Financial Name of of University Countrywide Financial Corporation Introduction Once the mortgage industry’s leader in home loan originations, Countrywide Financial Corporation slid into infamy as one of the major contributors of the mortgage meltdown…
Role in the Subprime Mortgage Meltdown Countrywide’s original creation of the practice of service oriented architecture (SOA) was heralded as revolutionary and became an industry standard (Gruman, 2005). The company was the leader in loan origination with others in the industry following suit, however what is unclear and unknown is when the company’s internal operations began to deviate from sound business practices (Jacobs, 2009; Mokhiber & Weissman, 2007). Gearino (2011) uses the example of the chaos theory to describe the affect and the influence Countrywide had on the subsequent mortgage meltdown (p. 40). He summarizes the chaos theory as “small deviations from the original intent or purpose of something causing varying results” (2011, p. 40). Subsequently, Countrywide’s business practices were small deviations from the standard ways in which mortgages were created and sold as mortgage backed securities (Jacob, 2009, pp. 17-25). What began as a revolutionary way of originating, underwriting, funding, and packaging mortgage loans for sale became the uncertainty of the deviations as hypotheized by Gearino (2011, p. 40). ...
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