Unfairness Research Paper

Pages: 5 (1481 words)  ·  Bibliography Sources: 5  ·  File: .docx  ·  Topic: Economics

SAMPLE EXCERPT . . .
The unexpected hit leaves Fannie with $3 billion less capital than the rules required as a cushion against financial uncertainties."

In hind sight this can be seen as a problem because Fannie Mae carried so many of the countries loans and was not able to cover their guarantees if something happened to the market. The issue was that houses were steeply overvalued because of the speculation that had been occurring (whether it was a house owned by someone who received a loan via the CRA program or through traditional lending practices), and this meant that Fannie and Freddie needed to make sure and maintain the required cushion they were mandated by their oversight committee. Unfortunately, as reported by Peterson in hos 2005 article, Fannie Mae did not have the money it was required to maintain, and it was found later that Freddie was equally short of funds (Peterson, 2005). This posed further problems when the loans that supplied the large amounts of capital which funded the two behemoths was based on paper and not reality (Block-Lieb & Janger, 2011).

Housing Issues Following 2008

Buy full Download Microsoft Word File paper
for $19.77
The Housing issues that began to come to light in 2008 was akin to a string of dominoes that had been started tumbling. First, AIG, one of the largest insurers in the U.S., crumbled and then Fannie Mae and Freddie Mac began to realize the false security of the speculation that had become one of the hallmarks of their business (Block-Lieb & Janger, 2011). The reason that so many banks had issues was because the mortgages that they had issued had been found to be highly overvalued. The same was true of the funds that carried these mortgages as an investing tool. Brokerage houses that had been founded at the dawn of the nation were now on the verge of collapse and begging for government assistance. Those banks which had maintained some decorum during the heady mortgage days preceding 2008, like Bank of America, were able to purchase other lenders, home loan providers (such as Countrywide) and even large wall street institutions such as Goldman Sachs.

Research Paper on Unfairness This Is a Short Assignment

Banks collapsing meant that many other businesses followed, and people lost jobs that they had maintained for many years. This meant that these people could not pay their mortgages, and many lost houses whose mortgages they were faithfully paying prior to losing their jobs. Of course, all of these issues were not caused by speculation and overregulation, but it was apparent that they were major causes of the domino effect that caused many home owners to lose their property. This crisis has continued from that time because other businesses have not been willing, until very recently, to hire back more workers fearing what has just happened.

Fixes

The government has been trying to turn the sluggish company around, but it has been difficult mainly because so much trust was lost during the initial collapse of the economy. Many industries were affected, so some of the workers from those industries have seen their jobs permanently lost (Miller, 2009). Research indicates that many of the loans defaulted on, especially right at the beginning of the crisis were those granted via CRA guarantees. Although it is difficult to directly verify this (Miller, 2009), after careful examination many economists have decided that wild speculation on home loans that were shaky from the beginning was a could be a major reason that the economy began to collapse (Block-Lieb & b Janger, 2011). The fact that people lost their homes regardless the type of program they acquired their home under, makes the tangle that much more difficult to unweave.

Conclusion

Although the preponderance of evidence points to irresponsibility on the part of legislators, lenders and buyers, it is difficult to tell which had the greatest amount of culpability. Further evidence continues to be collected, but it may take many more years before the full truth is known.

References

Block-Lieb, S., & Janger, E.J. (2011). Reforming regulation in the markets for home loans. Fordham Urban Law Journal, 38(3), 681-699.

Canner, G.B., & Passmore, W. (1995). Home purchase lending in low-income neighborhoods and to low-income borrowers. Federal Reserve Bulletin, 81(2), 71-78.

Miller, M. (2009). Stemming the subprime crisis: The North Carolina foreclosure prevention project. Stanford Law & Policy Review, 20(1), 213-231.

Peterson, J.R. (2005). Fannie fallout: The ongoing scrutiny of Fannie Mae will affect you. The effects could be a plus for some mortgage lenders, but hedging… [END OF PREVIEW] . . . READ MORE

Two Ordering Options:

?
Which Option Should I Choose?
1.  Buy full paper (5 pages)Download Microsoft Word File

Download the perfectly formatted MS Word file!

- or -

2.  Write a NEW paper for me!✍🏻

We'll follow your exact instructions!
Chat with the writer 24/7.

Race Ethnicity in the 18th Century Term Paper


John Smith and William Bradford Essay


Career Orientation of Bank Managers in Pakistan a Private Public Sector Comparison Term Paper


Outsiders Main Characters a Review Thesis


Psychological Intervention to a Person Who Has Lost a Job Essay


View 200+ other related papers  >>

How to Cite "Unfairness" Research Paper in a Bibliography:

APA Style

Unfairness.  (2012, November 16).  Retrieved July 13, 2020, from https://www.essaytown.com/subjects/paper/unfairness-short/7674043

MLA Format

"Unfairness."  16 November 2012.  Web.  13 July 2020. <https://www.essaytown.com/subjects/paper/unfairness-short/7674043>.

Chicago Style

"Unfairness."  Essaytown.com.  November 16, 2012.  Accessed July 13, 2020.
https://www.essaytown.com/subjects/paper/unfairness-short/7674043.