They also helped wealthier buyers qualify for larger loans than they could really have qualified for, to purchase larger homes or to take equity out of the property in a booming housing market. When many of the unqualified and under-qualified borrowers began defaulting, the entire industry collapsed. The situation threatened the entire national economy because the wealth of some of the nation's largest banks and investment firms depended on the quality of those mortgage loans. Billions of dollars in stock value were based on complex mortgage-backed securities based on those bad mortgages sold by Countrywide and others.

3. What are the ethical issues that need to be addressed (be specific; cite examples)?

Countrywide violated ethical rules and the law almost every time they sold a mortgage in the years leading up to the housing market collapse. They knew that many of the buyers would probably end up defaulting and they...
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