Viewing papers 1-23 of 23 for predatory AND lending AND and AND the AND subprime AND mortgage AND crisis

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Subprime Mortgage Market Thesis

… Subprime mortgage market was an important segment of the mortgage market in the 1990s and early 2000s. Subprime mortgages rose from approximately ten percent of the mortgage market to twenty percent in 2005 and 2006 however, the market has experienced a hardship since late 2006 and early 2007. In the fourth quarter of 2007, 17.31% of subprime loans were delinquent and 8.65% of subprime loans were in the foreclosure process. The work of Dell-Ariccia, Igan and Laeven (2008) entitled: "Credit Booms and Lending Standards: Evidence from the Subprime Mortgage Market" states that the subprime market has "expanded rapidly" over the past ten years and has evolved "from a small niche segment to a major portion of the U.S. mortgage market." (Dell-Ariccia, Igan and Laeven, 2008)…. [read more]


Predatory Lending and the Subprime Mortgage Crisis Seminar Paper

… Predatory Lending and the Subprime Mortgage Crisis

The issues with subprime mortgages are recognized by now, with many evasions and consequences for businesses and financiers in a similar way. A lot of writers have been swift to charge what they call hungry, predatory lenders who oppressed poor, simple and uneducated borrowers. This is expected for the reason that lenders have been blamed of many comparable sins in earlier periods. For instance, the uproar following the printing of Apgar et al. (2006)

, which has been extensively deduces as proof of racial bigotry, is renowned. So far other explanations of the data exist, with Elliehausen & Staten (2004) being a well-known case in point.

Analysts state that minorities disburse bigger overages or yield spreads than Caucasians,…. [read more]


Sub-Prime Mortgage Lenders Ethical Legal Research Paper

… Families are further getting into debt and payday lending is contributing to the number of families that end up filing for bankruptcy. In a study comparing payday lenders who were approved vs. denied by lenders in Texas, first-time borrowers were two-times more likely to file for bankruptcy within two years of the loan that those borrowers that were denied the first time (Skiba and Tobacman, Do Payday Loans Cause Bankruptcy 20). According to this study, payday loans do lead to bankruptcy because those that access payday loans are already financially strained individuals, they make repeated use of payday loans, and in the at the time of bankruptcy, these loan debts end up amounting to 11% of the liquid debt interest burden (Skiba and Tobacman, Do…. [read more]


Factors Leading to the Recent U.S. Financial Crisis or Repercussions Term Paper

… Financial Crisis and Predatory Lending

The Financial Crisis an Predatory Lending

What really caused the financial market to crash? Was it jobs being shipped overseas, or maybe a huge increase in consumer debt? There were actually a number of causes, but subprime lending and predatory lending practices were some of the largest. This paper examines how subprime and predatory lending became so popular and overlooked right before the housing bubble burst. It then looks to examine how this eventually generated the extreme financial situation that this country has still yet to get out of.

The recent recession was one of the worst that this generation has ever seen. Thousands of Americans lost their homes and savings, and many more had to face serious financial hardships…. [read more]


Subprime Mortgage Crisis Term Paper

… Policymakers should give consideration to the regulation of mortgage brokers and originators under the existing Truth in Lending Act (TILA) through establishment of a "fiduciary duty between brokers and their customers, and a duty of good faith and fair dealing standard for all originators." (Schumer and Maloney, 2007)

Finally, it has become clear that borrowers are not required by the mortgage finance system to have an understanding of how their loans work. Lenders should be required to make full disclosure of how the loan works including the loan amount, the appraised value of the property, the loan terms, the payments at each reset date and an estimate of how much the rate will increase along with the maximum possible rate of the loan. (Schumer and…. [read more]


Mortgage Crisis the Mortgage Meltdown Essay

… I found that the Financial Crisis Inquiry Report (2011) provides the best summary of the causes of the meltdown. Moreover I agree with their conclusion that the crisis was avoidable. Not only do I agree with the analysis put forward in the Report regarding causes of the financial crisis, I also question why governmental regulators failed to regulate. The Federal Reserve had the authority to set prudent mortgage-lending standards, but did not act on that authority. Also, the SEC, according to the Financial Crisis Inquiry Report (2011), could have required more capital reserves at the big investment banks to halt their risky practices, but the SEC failed to tighten these standards. And wherever regulators claim they lacked the authority to regulate the financial system, they…. [read more]


Financial Crisis of 2007 Caused by the Rich Suffered by the Poor Thesis

… Financial Crisis

There are signs that the ongoing financial crisis is coming to an end. The GDP has risen in each of the last two quarters, housing prices has stabilized, the Dow Jones Industrial Index is back above 10,000 and the White House has returned to its usual policy of excusing executive excess. Yet America is not breathing easy. Unemployment sits at 9.7% for January 2010, a historically high figure. Janny Scott and David Leonhardt argue that the class divide in the United States is growing larger. The class divide may not be driven by heredity, but it still exists. The more privileged classes in our society succeed where others fail because they are able to master the "new ways of transmitting advantage." They game…. [read more]


Global Financial Crisis (GFC) Research Paper

… The effect of the global financial crisis has biggest negative impact on the U.S. GDP with permanent loss of wealth of household, and there is gradual decrease of household consumption. The value of the stock markets decline due to the crisis and the equity risks make investors to divert into other domestic assets such as government bonds and assets purchase overseas. Typically, the effect of U.S. financial crisis translates into the global financial crisis because U.S. has business relations with many countries in the world. Typically, many countries depend on the U.S. economy. For example, United States is the largest importer of Chinese goods, and the collapse of U.S. stocks reflect on the Chinese stock markets.

Douglas, (2009) argues the global crisis is attributed to…. [read more]


Economic Crisis 2007-2010 Research Paper

… Irrational Exuberance: The Economic Crisis of 2007-2009

According to the National Bureau of Economic Research, what will no doubt become known as first Great Recession of the 21st century began in 2007. "The NBER said that the deterioration in the labor market throughout 2008 was one key reason why it decided to state that the recession began [in 2007]…the NBER also looks at real personal income, industrial production as well as wholesale and retail sales. All those measures reached a peak between November 2007 and June 2008, the NBER said. In addition, the NBER also considers the gross domestic product, which is the reading most typically associated with a recession" (Isidore 2008). However, while the official start of the recession may be dated to 2007,…. [read more]


Fixing the Mortgage Market Term Paper

… Fixing the Mortgage Market

Over the last decade the U.S. housing market has been on a tremendous rollercoaster ride. Where, prices were at all time highs and lending standards were easy. Then, the inventible collapse came; that was accompanied by a financial crisis that was not seen since the Great Depression. An example as to how extreme the current economic situation became is with the total number of foreclosures in 2009. Where, Realty Track found that foreclosures hit an all time high during that year, coming in at 2.8 million. This is a 120% increase in the total amount of foreclosures since 2007. With Realty Track CEO James Saccacio saying, "A massive supply of delinquent loans continues to loom over the housing market, and many…. [read more]


U.S. Housing Market Boom to Bust Research Paper

… U.S. Housing Market Boom to Bust

Housing Market - Boom to Bust

House Prices Rose at Unprecedented Levels.

US housing prices have risen at an unprecedented level for nearly a decade, ending boldly in 2007. According to Leonard housing appreciation climbed from the 1983-2006 average of 7.4% to the staggering 12.7% appreciation which was nationally common just prior to the current decline. Leonard also stresses that individuals took full advantage of these boom housing appreciation percentages for the first time as home equity loan products came on to the markets in record numbers, something that was unheard of until after 1981. The illiquidity of real property prior to 1981 kept consumers relatively safe from declines, and their equity safe from overspending as they took full…. [read more]


Ethical and Legal Issues Essay

… According to the authors, the foundational points include transparency, the rights of capital, fiduciary responsibility and gatekeeping g and calculations of risk and return (Steingard & Webster, 2008, 17).

In terms of transparency, the individual stakeholders (investors, etc.) have a right to know any information that could have significant impacts on the consequences of their business decisions.

In other words it is immoral to keep these stakeholders in the dark about financial facts that impact upon their bottomline (ibid). Trust is basic to capitalism and it can not function without this transparency.

Further, the authors hold that there is an ethical right of capital where the stakeholders have a right to making a profit and to maintain competitive advantage. Without the promise of possible benefit,…. [read more]


Business Ethics Recognizing and Resolving Ethical Dilemmas Research Proposal

… Business Ethics

Recognizing and Resolving Ethical Dilemmas

The foundation of the American financial system is home ownership. Spending on the construction of a home, furnishing it, maintaining and reselling it is the most valuable asset the majority of Americans have in their investment portfolios, in addition to being an essential catalyst of the American economy. The meteoric rise of subprime mortgages based on lower interest rates and loan programs that were based on adjustable financing, negative amortization, and other financial transactions that were designed to ensnare consumers into more debt than they could afford (Verschoor, 2007). From an ethical standpoint the debate of who is primarily responsible for the subprime mortgage crisis continues, yet there is no clear answer. From a purely financial perspective the…. [read more]


Savings and Loan Crisis Term Paper

… S&L

The discussion explored the causes of the crisis and explains the potential solutions. Inflation, deregulation and financial mismanagement are the major causes for the current Savings and Loan crisis. Inflation is defined as "An increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices ("What is the real definition of inflation?")." Inflation affects the Savings and Loans industry because it influences investment decisions and in some cases increases the need for people to borrow. Deregulation allowed lenders to circumvent scrutiny and approve very sketchy mortgages and engage in questionable lending practices. In other words, deregulation allowed lenders to operate without supervision. Financial mismanagement occurs at both the institutional and consumer level…. [read more]


Securitization and Bank Liquidity Term Paper

… Securitization and Bank Liquidity

The objective of this work is to examine securitization and how it is currently used in the banking industry with a focus on real estate and the current problems banks are facing recently regarding mortgages and how that banks lend easy money to anyone and then are unable to recover the money. This work seeks to examine what the future holds for mortgage markets and banks.

Securitization: A process of creating new financial instruments by pooling the cash flows from a number of similar assets such as mortgages or credit card accounts, and putting them into a separate entity often with some explicit guarantee or extra collateral. (Loutskina, 2004; 7)

Liquidity: According to the Federal Deposit Insurance Corporation (FDIC), liquidity is…. [read more]


Business Law- Corporate Responsibility Irresponsible Lending Practices Thesis

… Business Law- Corporate Responsibility

IRRESPONSIBLE LENDING PRACTICES and the MORTGAGE CRISIS OUTLINE

Responsible Mortgage Lending Practices: 2 pages

The concept of credit extension

Types of credit extension

Responsible/Predatory lending to low income earners, students, unqualified borrowers

Due diligence/Responsible borrowing...taking out equity from mortgaged property

Irresponsible spending and American culture

Evolution of Irresponsible Mortgage Lending Practices: 2 pages

Evolution of third-party lenders...car dealers

Implications of third-party lenders on due diligence...motivation by loan #s

Evolution of liquid mortgage securities from non-liquid obligations

The perfect storm the 21st Century American Mortgage Crisis: 1.5pgs

Link between economy and various factors like real property values

Present situation description w/mortgages

Chain reaction of depreciated mortgages and overvalued mortgage securities

Bear Sterns...bank failures

Implementing Solutions for the Future Health of the American…. [read more]


Unfairness Research Paper

… 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…. [read more]


Economics of Strategy Term Paper

… ¶ … economic crisis -- bankers to blame?

Be it resolved that bankers in developed economies are responsible for the global economic downturn and have behaved without moral integrity.

To blame bankers for the global recession that has been steadily degridating assets values globally by the trillions of dollars from 2007 to 2009 (Corden, 2009) is to miss the broader and far more significant factors. The last series of scandals including Enron, Tyco and many other corporations had as their catalyst the complete lack of insight and compliance initiatives on the part of the U.S. Federal government. The same could be said of the world's governments as well. In reaction to the astounding lack of compliance with regard to financial institutions and the publicly-traded corporations…. [read more]


Federal Consumer Protection Law Research Paper

… Countrywide Financial

Consumer Protection and Predatory Lending

The Case Against Countrywide Financial

Consumer Protection and Predatory Lending

The Case Against Countrywide Financial

The most recent U.S. housing boom ended dramatically in 2007, with the near collapse of the economy and the sudden loss of trillions of dollars in home equity and stock values. For years before this sudden recession, some domestic mortgage lenders were setting profit records issuing loans to consumers who would never have previously qualified. In fact, several of the most successful of these lenders were actively engaged in a pattern of predatory lending.

The definition of predatory lending turns on who really benefits in the questioned mortgage transaction. The fact that the homeowner does NOT benefit (but the loan broker does) is…. [read more]


Sub-Prime Market in the U Term Paper

… ¶ … SUB-PRIME MARKET in the U.S. HAVE HAD SIGNIFICANT IMPLICATIONS for LENDERS THROUGHOUT the GLOBAL FINANCIAL COMMUNITY

The word used most often in recent reports relating to the subprime lending market is the word 'meltdown'. A CNN News report entitled: 'New Recession Worry: Bank Failures" states that the FDIC reported last week "the biggest jump in problem institutions it has seen since the savings and loan crisis of the late 1980s..." (2008) which means that banks are in trouble and expectations stated in this report is that "more than 200 troubled banks are likely to be purchased before they reach the point of failure." (Isidore, 2008) the report further relates."..many of these banks are highly dependent on construction lending, and that's the areas of…. [read more]


Economic Stimulus Research Proposal

… ¶ … Economic Stimulus, Banking Firms, and Their Performances:

The Current U.S. Financial Environment and What Comes Next

The banking industry in the U.S. has been strongly and negatively impacted by the current financial situation of the country, particularly with regard to the subprime mortgage crisis. This crisis became very obvious in 2007 and, since then, there have been a lot of related problems. Banks have been bailed out, and so have homeowners, all as part of the Obama Administration's economic stimulus package. This package was designed to create jobs, help people keep their homes, and let the country move forward, but there have been many people who have complained about the stimulus, as well. These people do not feel that the stimulus package has…. [read more]


Cultural Diversity in Homeownership Term Paper

… "

Summary and Conclusion

This work has clearly demonstrated that there is much disparity in homeownership rates between white and ethnic minority households. While there have been legislative and regulatory acts geared toward reducing these disparities it is clear that the disparity in homeownership rates for minority households persists. Predatory lending practices have served to further and deepen these disparities with the subprime crisis highlighting the treatment received by minorities when seeking financing for their purchase of a home. It is not clear what actions should or will be taken to address these problems. In fact, the only thing that is sure at this point in time is that many minority households are losing their homes to foreclosure and in many cases their equity has…. [read more]


Ethics and Morals - Business Research Proposal

… Ethics & Morals - Business Ethics

Business ETHICS FAILURES and the CURRENT ECONOMIC CRISIS

Background, History, and Evolution of the Problem:

During the 20th century, the United States emerged as the most prosperous nation on earth with living standards and economic opportunities that were the envy of much of the rest of the modern world. For most of the century, the American middle class enjoyed the comforts of a lifestyle that exceed those that have ever been available to most people who have ever lived.

Just as many philosophers and social theorists have explained, the relatively widespread availability of modern convenience to the masses typically triggers a form of social status competition defined purely by relative wealth in comparison to others rather than defined by…. [read more]

NOTE:  We can write a brand new paper on your exact topic!  More info.