To begin with, at the beginning of this year, New Century was once the second largest issuer of subprime mortgages in the United States. However, when the New York Stock Exchange delisted NCF in March this year, its market capitalization declined sharply. I noticed that NCF had a flawed business model and strategies in service of their business goals. Apparently, NCF's business model is of primary origin; grouping; servicing and securitizing subprime mortgages and selling them to investors. In 2006, NCF told its shareholders and the public that the company's strategic objectives included achieving strong operational performance, expanding into more mortgage products and services, increasing market share reducing costs and improving productivity. Unfortunately, the NCF failed to deliver on its promises and applied poor strategies to achieve its goals. In fact, in order to achieve its strategic goals and improve its sales, NCF ignored all the high levels of risks involved in subprime lending and ended up making as many subprime loans to less responsible subprime borrowers, without evaluating the quality of the loan. For example, in 2006, loans granted reached $60 billion without adequate consideration of the associated risks. At the same time, in order to attract more risky borrowers, the company launched risky mortgage products, such as interest-only payment, deferred interest mortgages, etc. In short, NCF ignored the risks involved in its crooked business goals, ignored loan quality, and focused solely on achieving aggressive sales goals and improving mortgage securitization volume like main business objectives. At NCF, the performance-based bonuses and benefits that management teams received were directly linked to the sales volume of..... .middle of paper ......io in 2006 was ridiculously high at 1,214%. , with total assets of $25.06 billion and shareholders' equity of $2.06 billion. Clearly, NCF was operating with extremely high leverage. Ultimately, shareholders got nothing from the diminishing value of the company's assets and countless debts. Insignificant expenses accelerated the depletion of cash. About $800 million in losses simply resulted from missing documents on loans that were rejected by its investors. The company's audit committee is also responsible for the failure of the NCF because the audit committee did not focus on key issues, such as loans. quality; nor did it closely supervise and promote the accuracy of accounting and financial reporting. An unsuccessful enterprise risk management process further exposes the company to various risks. All of these factors above contribute to the demise of the company.