Countrywide was founded in 1969 by Angelo Mozilo, and was extremely successfully until the housing crisis in 2007 with a resulting nationwide banking crisis due to subprime mortgage lending practices. Consequently, the company was purchased by Bank of America for pennies on the dollar not only for Countrywide to remove them from the financial crisis, but to escape potential penalties to due fraudulent practices (Ferrell, Fraedrich, Ferrell, 2015).
Many accusations regarding Countrywide’s lending practices have been addressed by the government and other financial entities. Accusations of lenders fraudulently selling shady loans originating through its "High Speed Swim Lane" program, also called HSSL or "Hustle," have been scrutinized and executives have testified to their practices. Lenders were incentivized to sell loans to people who did not qualify for the loan, and were complicit in falsifying documentation that could qualify the applicant even though …show more content…
Court of Appeals threw out the jury’s findings that Bank of America was liable for the fraud leading to the 2008 financial crisis, and eliminated the 1.27 billion penalties, and upsetting the U.S. Department of Justice original decision. The decision was unanimous and stated the evidence did now show Countrywide intended any deception. Consequently, the government continues to hold conservatorship of Freddie Mac and Fannie Mae that bought Countrywide loans on good faith that they were solid mortgages (Raymond, 2016). Also this year, Angelo Mozilo was released from further investigation from the Justice Department and all criminal investigations are now clear. The roughly $22 million Mr. Mozilo personally paid pales in comparison with the gains he reaped from Countrywide stock over the years (Morgensen, 2016). Mozilo and other CountryWide executives are still considered to be an integral part of the financial crisis in 2008, and barred from participating on any financial
Many accusations regarding Countrywide’s lending practices have been addressed by the government and other financial entities. Accusations of lenders fraudulently selling shady loans originating through its "High Speed Swim Lane" program, also called HSSL or "Hustle," have been scrutinized and executives have testified to their practices. Lenders were incentivized to sell loans to people who did not qualify for the loan, and were complicit in falsifying documentation that could qualify the applicant even though …show more content…
Court of Appeals threw out the jury’s findings that Bank of America was liable for the fraud leading to the 2008 financial crisis, and eliminated the 1.27 billion penalties, and upsetting the U.S. Department of Justice original decision. The decision was unanimous and stated the evidence did now show Countrywide intended any deception. Consequently, the government continues to hold conservatorship of Freddie Mac and Fannie Mae that bought Countrywide loans on good faith that they were solid mortgages (Raymond, 2016). Also this year, Angelo Mozilo was released from further investigation from the Justice Department and all criminal investigations are now clear. The roughly $22 million Mr. Mozilo personally paid pales in comparison with the gains he reaped from Countrywide stock over the years (Morgensen, 2016). Mozilo and other CountryWide executives are still considered to be an integral part of the financial crisis in 2008, and barred from participating on any financial