Loan Essays (Examples)

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Tax Deductions for Default

Words: 1187 Length: 3 Pages Document Type: Essay Paper #: 57996689

Tax Deductions: Are Unpaid Loans Tax Deductible?

John loaned his friend Jack $1,000. Jack did not repay the debt and left town. John wants to know if he can claim any tax deduction, and, if so, what is the character of the deduction? However, to answer John's question, one must first find out more information about the nature of the loan. This is critical because there are two broad types of loans and debts: business loans and personal loans. Furthermore, under the correct circumstances, it is possible for people to take tax deductions for certain types of business loans and personal loans. Knowing whether John made Jack a loan from his personal money or from his business money is the crucial first step in determining which, if any, Internal evenue Service (IS) regulations or tax laws will permit John to deduct the unpaid debt.

If John is a business owner…… [Read More]

References

Bailey, A.C. (2014). Unpaid personal loans can reduce your tax bill. Retrieved April 12, 2014

from MyTaxHQ website: http://mytaxhq.com/unpaid-personal-loans-can-reduce-your-tax-bill/

Fishman, S. (2013, June 7). Bad loans to friends and family may be tax deductible. Retrieved April 11, 2014 from Inman News website:  http://www.inman.com/2013/06/07/bad-loans-to-friends-and-family-may-be-tax-deductible/ 

Internal Revenue Service. (2013, December 12). Topic 453- Bad debt deduction. Retrieved April 12, 2014 from IRS website: http://www.irs.gov/taxtopics/tc453.html
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S& l the Discussion Explored the

Words: 1942 Length: 6 Pages Document Type: Essay Paper #: 3346939



Solutions

As a response to the savings and loans debacle, there have been several attempts by congress and other governmental agencies to assists consumers and some financial institutions alike. The most significant and some say extreme solution thus far came when the Federal government assisted JP Morgan with the purchase of Bear Stearns for $2 per share.

One of the most discussed solutions has to do with baling out the mortgage lenders and assisting borrowers. There are several different remedies that have been proposed. These remedies include everything from a moratorium on foreclosures to the freezing of interest rates.

As it pertains to the mortgage companies it has been suggested that limits should be lifted so that companies can purchase jumbo housing loans. According to one article this type of mortgage relief could help staunch the hemorrhaging in high-priced housing markets...where buyers have had difficulty getting loans and are paying…… [Read More]

Works Cited

Jumbo Loans Spell Relief; Analysts See Economic Fix. (2008, January 29). The Washington Times, p. A01.

Kuttner, R. (2007, October). The Bubble Economy: The Financial Meltdown Is the Logical Consequence of Deregulation. Will We Reverse Field in Time to Prevent Another 1929?. The American Prospect, 18, 20+.

Peterson, J.R. (2005). Designer Mortgages: The Boom in Nontraditional Mortgage Loans May Be a Double-Edged Sword. So Far, Most Banks Have Moved Cautiously. ABA Banking Journal, 97(10), 30+.

What is the real definition of inflation?." Retrieved May 8, 2007 from; http://www.inflationdata.com/Inflation/Articles/Definitions.asp
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Government Encouraging Small Businesses Importance of Government

Words: 1314 Length: 4 Pages Document Type: Essay Paper #: 85934275

Government Encouraging Small Businesses

Importance of Government Encouragement of Small Business

The socio-economic considerations of the federal procurement process

The federal procedure is made up of different social-economic factors that are of contention in establishing a free and fair-trading. The core intentions of the existence of the federal procedures are to foster stability in the fields of social and economic exemplifications. The policy statements laid by the federal procedures are directed at bringing the best out of the economic and social conditions of the people. In many avenues that cater for varied approaches of loving amicably in the country, the United States of American government established a branch of cohesion and establishment of a free trading mechanism for all the people (Feldman, 2013). The federal procedures ensure the country has existed in terms of stable and functioning social-economic platform. For instance, the stability reflects on the magnitudes of exploring profitability…… [Read More]

References

Feldman, S.W. (2013). Government Contract Guidebook. Fourth Edition. West, A Thomas

Reuters Business

Gatti, S. (2013). Project finance in theory and practice: Designing, structuring and financing private and public projects. Waltham, MA: Academic Press/Elsevier.

Gosdin, J.L., & American Bar Association. (2007). Title insurance: A comprehensive overview. Chicago, IL: Section of Real Property, Probate, and Trust Law, ABA.
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For-Profit Colleges

Words: 1742 Length: 5 Pages Document Type: Essay Paper #: 88659726

Profit Colleges

"hy do you think they are called for-profit colleges:"

The big business of (not) educating students 'You need a college degree.' This is the conventional wisdom articulated in today's society, where job prospects remain scarce, despite the softening economy. On average, "unemployment is still far lower for the college-educated than for high school graduates (10%) and those without high school diplomas (15.7%)," and the most severe effects of the recession were felt in the manufacturing and construction sectors, typically the areas of the economy which offer the brightest prospects to non-college degree holders (Davidson 2010). orries about one's viability in the job market have driven many workers to seek out higher education in nontraditional formats. Few adults have the ability to afford a traditional four-year school and balance the needs of home and work. Online, for-profit colleges or nighttime schools may seem the ideal solution. On the surface,…… [Read More]

Works Cited

Carey, Kevin. "Why do you think they're called for-profit colleges?" Chronicle of Higher

Education. 25 Jul 2011. [4 Mar 2010].

   http://chronicle.com/article/Why-Do-You-Think-Theyre/123660/   

Davidson, Paul. "Unemployment rate for college grads is highest since 1970." USA Today.
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Bsba Integrative Project Learning Growth Internal Business

Words: 1295 Length: 4 Pages Document Type: Essay Paper #: 42142576

Bsba Integrative Project

Learning Growth

Internal Business Processes

Customer Service

Financial

Employee training hours, employee satisfaction,

New loans created, new accounts, new products introduced, cross sells, and referrals.

Number of products per customer, number of new customers, customer satisfaction, customer retention, sales calls to customers, and thank you calls to existing customers.

Outstanding Loan Balances, Deposit Balances, Noninterest income,

Financial

Performance Measures

Internal Business Process

Objectives and Performance Measures

Customer Objectives

and Performance

Measures

VISION & STATEGY

Learning & Growth

Objectives and Performance Measures

The causal chain indicates that objectives of the company in relation to the balanced scorecard depend significantly on the vision and strategies of the business entity. The objectives and measures in relation to the consumers of the company play a critical role in achievement of the three main financial goals: loan balances, deposit balances, and noninterest income. The company should focus on improving services to their…… [Read More]

References

Albright, T.; Davis, S.; & Hibbets, A. (2001, October). Tri-Cities Community Bank: A Balanced Scorecard Case. Strategic Finance, 83(4), 54-60.Retrieved May 17, 2010, from the library: https://coursenet.trident.edu

Silverthorne, S. (2008). Executing Strategy with the Balanced Scorecard. Retrieved May 17, 2010, from http://blogs.bnet.com/harvard/?p=397&tag=nl.e713

Raab, G. (2008). Customer relationship management: A global perspective. Aldershop: Gower.
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Mcbride Security Policy Security Policies and Recommendations

Words: 955 Length: 3 Pages Document Type: Essay Paper #: 93989741

McBride Security Policy

Security Policies and ecommendations for McBride Financial Services

McBride Financial Services has experienced increased consumer interest in its innovative and economical loan offerings and terms. With rising competition in the market, McBride is now aggressively working to boost market share through a renewed focus on customer service and simple and speedy loan processing (Fluss, 2009). While many automated processes in the financial sector can be convenient for customers, they can also present unique and significant security risks for companies (Compton, 2004). The following policies are aimed at covering certain critical security areas for the loan department at McBride Financial Services.

General Information Security

Sensitive information can be defined as a customer's full name, address, phone number, credit information, social security number, date of birth, mother's maiden name, employment and salary information, username/passwords combinations, or PIN ids (Bilich, 2000). All such information should be stored securely in order…… [Read More]

References

Bilich, F. (2000). 'Total quality management: quality macro-function model for banks. (Cover story)', Total Quality Management, 11(1), 15.

Brandt, D. (2012). 'Work Perfect', Industrial Engineer: IE, 44(9), 66.

Britt, P. (2005). 'Finding the Formula for Successful Cm', Econtent, 28(1/2), 38-42.

Compton, J. (2004). 'CRM Is Go!', CRM Magazine, 8(10), 30-35.
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Accounting Tootsie Ratio Analysis in

Words: 944 Length: 2 Pages Document Type: Essay Paper #: 63439349

46. So far the firm looks to be a good potential candidate for a loan.

3.

Solvency

The current and quick ratio looks at the short-term ability of a firm to meet its obligations. A lender will also want to look at the longer term position and the ability to repay the entire debt plus interest and fees (Libby et al., 2010). The solvency ratio assesses the level of cash generated in a year as a percentage of the debt. The cash generated is calculated by taking the net profit after tax and adding back the depreciation. The total liabilities are calculated by adding together the current and the long-term (non current) liabilities.

Table 3; Solvency ratio for Tootise oll Industries Inc.

2006

2007

Net profit after tax (a)

65,919

51,625

Depreciation (b)

15,816

15,859

Adjusted net profit (a + b) (c )

81,735

67,484

Current liabilities (d)

62,211

57,972…… [Read More]

References

Paper is based on a case supplied by the student

Howells P.G.A, Bain, K, (2007), Financial Institutions and Markets, London, Longman

Libby, R; Libby, P. Short D, (2010), Financial Accounting, McGraw-Hill
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Finance There Are a Number

Words: 1543 Length: 5 Pages Document Type: Essay Paper #: 60595827

I would advise that Mr. Haskins has to understand that the banks are businesses, and make strategic investments when they think those businesses will pay off. This means that AMD needs to ensure that the banks are happy, in order to secure financing. That means giving the banks what they need to feel secure in this investment. Receivables are not adequate collateral, for a lot of reasons, and ancient receivables are especially worthless. Likewise, giant stockpiles of inventory are not good collateral for a bank. Mr. Haskins has to understand that banks are not interested in these things as collateral, but if he gives the banks what they want he can have loans on the strength of his business.

Mr. Haskins must realize that banks are partners, but they need something out of the deal as well, and do not operate on blind faith. As such, Mr. Haskins needs to…… [Read More]

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Mortgage Industry Impacts on New

Words: 2465 Length: 8 Pages Document Type: Essay Paper #: 3772477

Interest rates will be lowered reaching 3.4% in 2011 and borrowers won't have to begin repayments until they are making about $15,000." (Education Portal, 2007) Furthermore, the effectiveness of this bill is questioned because after 2011 interest rates will quickly climb on these loans again.

The work entitled; "Student Loan Lenders Creating a New Credit ubble" states of investors, that they are: "...clamoring to purchase bundled student loans. According to Moody's Economy.com, the market for private student loan-backed securities has seen an increase of 76% in the last year alone. The same thing happened in the sub-prime mortgage market during 2005 and 2006. There has since been a 'meltdown' in the industry. A total of 161 mortgage lenders have imploded since late 2006 (source: Mortgage Lender Implode-O-Meter), and more than 2 million mortgage borrowers are expected to default on their mortgage loans before the end of 2008." (Education Portal, 2007)…… [Read More]

Bibliography

55 Colleges Under Investigation for Unethical Student Loan Practices (2007) Education Portal. 2 Nov. 2007. Online available at http://education-portal.com/articles/55_Colleges_Under_Investigation_for_Unethical_Student_Loan_Practices.html

Facts About Student Loans (2007) Education Portal 14 Sept 2007 Online available at http://education-portal.com/articles/Facts_About_Student_Loans.html

Gordon, Marcy (2008) Student Loans Sow Seeds of Economic Ills. 13 Mar 2008 USA Today. Economy. Online available at http://www.usatoday.com/money/economy/2007-09-30-studentloans_N.htm

Hughes, Art (2008) Private College Loans May Spell Trouble for Students. Minnesota Public Radio. 5 Mar 2008. Online available at http://minnesota.publicradio.org/display/web/2008/03/05/loantroubles/
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Financial Risk Management Even at

Words: 1812 Length: 6 Pages Document Type: Essay Paper #: 72913579

Hence, the likelihood of having to repurchase a large amount of repurchases would result. This was increasingly risky as the company spiralled into much lower reserves than it would admit publicly. The increasing risks were recognized by New Century employees. Despite efforts by these employees to suggest changes, the response by Senior Management was generally to reject or ignore these suggestions.

Senior Management was therefore fully aware of the increase of early payment defaults on loans as early as mid-2004. Although rising interest rates exacerbated the risks inherent in the type of products offered by New Century, these were ignored by Senior Management, who continued to capitalize on investor demand without any regard for the probability of repurchase requirements. The inevitable, however, occurred, and New Century faltered under the pressure.

Additionally, Senior Management also failed to provide inadequate attention to the issue of investor "kickouts." Relatively elementary loan rejections such…… [Read More]

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Business Requirements Analysis for Long

Words: 2720 Length: 8 Pages Document Type: Essay Paper #: 55691620

Where pricing integration typically fails however are in the handling of exceptions. Columbus (2003) makes the point that the use of automated approaches to managing special pricing requests can be one of the highest OI activities of any company. The focus for LOM then is in turning the one-off loan request specifically including a differing rate or structure into a competitive advantage by quickly being able to fulfill it. The use of automated special pricing requests applications and techniques as defined by Columbus (2003) are strong competitive tools that could be used as part of FlashQuote and BFOT overall.

FlashQuote Use Case Analysis

Identifier: FlashQuote Use Case Analysis

Name: BFOT System component that includes quoting, pricing, loan interest rates and the ability to electronically upload the loan, once approved, to the LOS.

Purpose: To more accurately and completely capture the quotes given to prospects over the telephone, the Web, and…… [Read More]

References

AMR Research (2003) - Configuration is the Heart of Customer Fulfillment for Complex Product Manufacturers. AMR Research Report. Monday March 31, 2003. Retreived from the Internet on July 21, 2006 at http://lwcresearch.com/filesfordownloads/ConfigurationIstheHeartofCustomerFulfillmentforComplexProductManufacturers.pdf

Askegar and Columbus (2002) - Channel Management Best Practices: It's All About Orders. AMR Research Report. Monday September 9, 2002. Retrieved from the Internet on July 21, 2006:

http://lwcresearch.com/filesfordownloads/SqueezetheRevenueOutofSPRs.pdf

Columbus (2002) - The Sell-Side E-Commerce Market: It's All About Integration. AMR Research Report. Monday April 1, 2002. Retreived from the Internet on July 21, 2006:
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Law of International Banking

Words: 6320 Length: 15 Pages Document Type: Essay Paper #: 44268359

Regulation of anks

anks are an important aspect of any modern economy. They provide financing for commercial businesses, access to payment systems and a variety of financial services for the economy as a whole. The integral role that banks play in the national economy is demonstrated by the need for and practice of banking regulation and as part of the lessons learnt from the recent global financial crisis, provides a government safety net to compensate depositors when banks fail thus providing depositor protection.[footnoteRef:1] One of the main reasons why banking regulation is vital is because of systemic risks; the risk that financial difficulties at one or more banks spill over to a large number of other banks or the financial system as a whole. Systemic risks were traditionally bank -- based. ank regulators traditionally focused on systemic risk in the banking sector while securities regulators traditionally focused on investor protection…… [Read More]

Bibliography

Allen, F. And Douglas, G. 2000. Comparing Financial Systems. MIT Press: Cambridge. MA.

Barth, J.R.., Caprio, G. And Levine, R. 2001. "Banking Systems Around the Globe:

Do Regulations and Ownership Affect Performance and Stability?" In Prudential Supervision: What Works and What Doesn't, ed. Frederic S. Mishkin. University of Chicago Press: Chicago, IL.

Boyd, J.H., Chun, C. And Smith, B.D. 1998. Moral Hazard Under Commercial and Universal Banking. Journal of Money, Credit, and Banking. 30: 426-468.
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Business Process and System Management

Words: 3432 Length: 8 Pages Document Type: Essay Paper #: 28693159

usiness Process and System Management

Vincent

Home loan in the United States is now done in a very simple manner and some organizations now even have stated on the Internet that most of the paperwork can be done on the Internet.

The importance of paperwork is gradually giving way to communication via the Internet, and any organization which keeps on doing business in the classical way is bound to come to grief later.

First national ank of St. Louis was seen in the Internet, but that bank did not seem to have the archaic system that has been described here. The housing loans in United States are of two types. The first type is the mortgage loan that is used for the original part of buying the house. The second loan is for the repayment of loans concerned with housing or for any other purpose. This is subsidized by the…… [Read More]

Bibliography

1. "Partnering with Third Federal" Retrieved at http://www.thirdfederal.com/homeequity/he_plan.pdf. Accessed on 12/14/2003

2. "Federal Home Loan Bank of Atlanta FHLBA" Atlanta, GA, 30309; 1.800.536.9650

Retrieved at http://www.fhlbatl.com/fhlb_content.cfm?lev1=4products&lev2=MPP

3. "First National Bank of St. Louis" 2002; Member FDIC. An Equal Housing Lender;
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Damages Is Whether or Not There Is

Words: 1567 Length: 5 Pages Document Type: Essay Paper #: 33737903

damages is whether or not there is a contract that has been breached. Under Texas law, a plaintiff must be establish four elements in order to prevail on a breach of contract clam. The four elements are: 1) the existence of a valid contract; 2) performance or tendered performance by the plaintiff; 3) breach of the contract by the defendant; and 4) damages sustained by the plaintiff as a result of the breach (Valero Mkfg. & Supply Co. v. Kalama Int'l. LLC).

The best evidence available for the plaintiff in establishing a possible breach of contract action is the loan commitment letter issued on March 31, 2005. The letter in question sets forth all the terms and conditions but, unfortunately, it also included a new term of which the plaintiffs were not aware. Additionally, the bank's employee, Max Brandt, assured the plaintiffs that compliance with the new term was not…… [Read More]

Works Cited

Gaughan, Patrick A. Measuring Business Interruption Losses and Other Commercial Damages. Hoboken, NJ: Wiley Publishing, 2009.

Valero Mkfg. & Supply Co. v. Kalama Int'l. LLC. No. 51 S.W.3d 345, 351. Texas Ct. Of Appeals. 2001.

essay question
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Predatory Lending and the Subprime

Words: 6468 Length: 22 Pages Document Type: Essay Paper #: 14582464

nd we must take into consideration what would happen if, somewhere down the line, we encountered the very real possibility of changed financial circumstances.

The financial knots we're tying ourselves into now, as we scramble to purchase homes and wind up owning less of them, can have serious long-term ramifications. Because today's overall tighter finances often necessitate putting off major purchases, many adults don't buy their first home until they're well into their thirties or even forties.

s a result, those thirty-year mortgage payments follow us right into retirement, hanging around even as rising health care and tuition expenses for college-aged children begin to spike. s a result, we discover too late that the asset we gambled everything to acquire because it was going to see us through retirement is instead pushing that retirement further and further away. lready, an increasing number of seniors are borrowing against their homes, accumulating…… [Read More]

Adam Tanner, San Francisco Suburb Vallejo Files for Bankruptcy, REUTERS, May 23, 2008;

Fishbein & Woodall.

Michael M. Phillips, to Help Broke Homeowners, He's Taking the Law into His Own Hands, WALL ST. J., June 6, 2008, at A1.
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Student Aid Programs Student Finance Aid Can

Words: 1737 Length: 5 Pages Document Type: Essay Paper #: 71725722

student aid programs.

Student finance aid can be described as funds given to the student to make it easy for them to fix cost of education such as fee and tuition, room and board, supplies and books where the students are undertaking their education like in universities, colleges or private schools.The funds which is being given out to public educations by government in general is known as financial aid meaning that it is being given to particular students, Financial aid can also be referred to as scholarship, although scholarship has some other components like students loans and grants.Loans are finance that one lend and must be paid back with an intrest after a period of time.In the case of student loan the money will be taken back after graduating.Aid is the help one is given.

All the U.S. states governments and The United States government offer loans, grants and work…… [Read More]

Work cited

Berkeley (December 2009)"students debt "Schackner Pittsburgh Post Gazette

Fetterman Mindy (2006)"Young people struggle to deal witht kiss of debts "USA Today

Kantrowitz, Mark (2010-03-26). "Student Loans - The New York Times." Nytimes.com. http://www.nytimes.com/info/student-loans/?inline=nyt-classifier. Retrieved 2011-02-07.

Schemo, Diana Jean (June 10, 2007) "Private loan deepen acrisis in student Debt "by new York times Tim Grant,(July 29,2009) "student loan puts college graduates into deep financial hole" Pittsburgh Post Gazette
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Credit Risk Management Oklahoma State

Words: 2250 Length: 8 Pages Document Type: Essay Paper #: 59195538

Other than the branch expansion there has been no significant change in their financial structuring. The future does not hold much along these lines as shown in the future projections. Other than conservatively adding lease financing as an option their growth is limited. Past figures from Federal Financial Institutions Examination Council (FFIEC).

However with the possible income gain from selling either their branch of a line of loans they may be able to further expand their existing loan base into larger corporate agribusiness financing. Out of any pool of assets a bank has the option of lending or investing the money. Lending does has a number of advantages both economically a socially: The act of lending usually increases the economic strength of the community, promoting the growth of the community and the bank. Lending also typically creates more deposits at the originating institution because the borrower usually receives an account…… [Read More]

Works Cited

Bielski, Lauren. "Rebuilding the Ultimate Lending Machine: Will Life after Subprime Yield Better Lending Environments?." ABA Banking Journal 100.3 (2008): 45-55

FFIEC. Federal Financial Institutions Examination Council. (2009). 9 September 2009

Hoffmann, Susan, and Mark Cassell. "What Are the Federal Home Loan Banks Up to? Emerging Views of Purpose among Institutional Leadership." Public Administration Review 62.4 (2002): 461-477

Holdren, Don P. "Community Banks and the Importance of Lending." Review of Business 12.4 (1991): 3-9
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Skills and Knowledge Area

Words: 2089 Length: 5 Pages Document Type: Essay Paper #: 47947140

Skills and Knowledge Area

The ability to research and interpret and then apply various local and federal and State laws as well as ordinances related to Community Programs is an extremely important and demanding skill. One example of the demonstration of this ability is that explained by Thomas R. Suozzi, the County Executive of Nassau, and Lorna B. Goodman, County Attorney of Nassau County, in their Annual Report on their County presented in December 2004. Herein, it is stated that with the support of the people of the county, they have managed to indeed accomplish a great many things, and they then proceed to list out the various activities and accomplishments. The first one is, according to the Report that of managing to bring 'in-house' the remaining part of the more than $10 million of specified legal work that had actually been given to the private bar earlier. The reason…… [Read More]

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Subprime Mortgage Market Was an

Words: 2338 Length: 8 Pages Document Type: Essay Paper #: 62396802

The term "adjustable-rate mortgage" describes any mortgage with an interest rate and payments that adjust according to some formula agreed upon by the borrower and lender. ARMs have been generally available to borrowers for about three decades on prime mortgages, but variants have been common to subprime mortgages over the past 10 years. The traditional ARM linked the mortgage's interest rate to the LIOR plus several percentage points." (Utt,2008)

Alt -- a Mortgages. Sometimes referred to as a "low-doc" mortgage, an Alt -- a mortgage is structured like the other mortgages described in this section but is made available only to prime borrowers or those with FICO scores above 660. However, these prime borrowers were required to offer only limited documentation on their qualifications, so many may not have been as "prime" as they represented themselves to be, as subsequent default rates indicate." (Utt, 2008)

Extremely Low- or No-Down-Payment Mortgages.…… [Read More]

Bibliography

Utt, Ronald D. (2008) the Subprime Mortgage Market Collapse: A Primer on the Causes and Possible Solutions. Backgrounder 2127 the Heritage Foundation. Online available at http://www.heritage.org/research/economy/bg2127.cfm

The Subprime Mortgage Market (2008) National and Twelfth District Developments. Federal Reserve Bank of San Francisco. Online available at http://www.frbsf.org/publications/federalreserve/annual/2007/subprime.pdf

Chomsisengphet, S. And Pennington-Cross, a. (2006) the Evolution of the Subprime Mortgage Market. Federal Reserve Bank of St. Louis (2001) Online available at> http://research.stlouisfed.org/publications/review/06/01/ChomPennCross.pdf
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Defaults Who Goes Into Foreclosure

Words: 1183 Length: 4 Pages Document Type: Essay Paper #: 52949187

Predictably, adjustable rate mortgages had a higher rate of default than non-adjustable rate mortgages, given the increase in interest rates in the years before the crisis, after many borrowers took out loans during an era of unusually low, near-zero rates. But another puzzling finding was that loans below $100, 000 and loan amounts in the $250,000 to half-million range had higher interest rates than loans of a half-million and above, once again suggesting that while middle-income individuals who might otherwise appear to be 'good' risks had been targeted for loans that were not advantageous to them.

"The finding that blacks and Latinos tended to borrow more helps explain why they received a disproportionately high share of high-cost loans, but the larger amounts borrowed by Asians contradicts the hypothesis that loan amount explains the rate spread differentials the best predictor that a borrower would default is the amount borrowed" as Asians…… [Read More]

Reference

Doviak, Eric & Kevin MacDonald. (2011). "Who defaults? Who goes into foreclosure?" 1-34.
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Microcredit Interest Rates High Interest

Words: 613 Length: 2 Pages Document Type: Essay Paper #: 75736572

educing operational costs is thus a key element in making microcredit less usurious. Extending larger loans to a group of individuals, so the cost of the loan is dispersed to a community, rather than used to burden a single individual is another potential solution.

The charges of usury are also rooted in the highly variable rates of interest around the world of microfinance, which can create the perception of injustice. Furthermore, some loan rates are shocking, especially for loans extended by supposedly charitable institutions and programs: "in 2007, for example, a controversy erupted around Compartamos, a Mexican MFI that was earning a 55% return on shareholders' equity by charging its borrowers interest rates around 85%" (Are microcredit interest rates excessive, 2009, CGAP). On average, the median interest rate for profitable microfinance institutions (MFI)s was about 26% in 2006. While this is around the interest rate of some credit cards in…… [Read More]

References

About microfinance. (2009). Kiva. Retrieved November 20, 2009 at  http://www.kiva.org/about/microfinance#1._What_is_microfinance 

Are microcredit interest rates excessive? (2009, February 25). CGAP. Retrieved November 20,

2009 at http://www.cgap.org/p/site/c/template.rc/1.26.5302/
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Federal Government's Impact on the Rise of

Words: 723 Length: 2 Pages Document Type: Essay Paper #: 25560043

Federal Government's Impact on the Rise of Student Loans

On the surface, student loans seem like such a beneficial and risk-free government program that there appears to be no reason to object to them. After all, the purpose of federally subsidized student loans is to give students who might not otherwise have a chance to get a post- high school education the chance to get that education. College degrees, vocational certificates, and graduate degrees all expand a person's earning potential, and, theoretically increase the likelihood that the person will elevate, not only his or her own financial status, but also the status of his immediate family. Therefore, the federal government subsidizing student loans seems like an efficient and responsible use of government money. However, further investigation suggests that student loans may simply be a way of shifting a tax burden into groups that are basically tax-immune. Therefore, the appropriate policy…… [Read More]

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Public Policy Institute of California

Words: 975 Length: 4 Pages Document Type: Essay Paper #: 72347256

Discuss the asymmetric informational problem that arises in the case of hourly loan officers issuing loans. Propose at least two proposals to minimize these concerns.

One of the primary reasons that so many home loans were issued in recent years to individuals who were not sufficiently creditworthy to be able to make timely payments on those loans is that there was an ongoing condition of asymmetric information. The individuals seeking the loans had much more information than the loan officers; in many cases they knew that they could not reasonably meet the conditions of the loan.

The hourly loan officers in many cases could probably have been able to determine that the individual was unlikely to be able to service the loan. However, these hourly loan officers were being rewarded for making loans and they had no real personal investment in whether or not the loan conditions were honored. They…… [Read More]

4. There has been much discussion about grade inflation at schools and universities. Discuss and display graphically the impact of grade inflation and the loosening of educational standards. Make sure to discuss how this will affect the ability of education to be used as a signal of worker quality.

One of the reasons that many individuals are focused on getting the best possible education for themselves is that they believe it will lead to a better job for them -- not just because they will have better skills and increased knowledge but also because a sparkling transcript will impress potential employers and give them a leg up in the employment process.

This is a reasonable assumption on the part of students and future employees. However, an essential part of this assumption is that there is a stable and predictable relationship between a student's efforts and abilities and the grades that that individual receives. Both the stability and predictability of this relationship are being deteriorated by grade inflation, in which students have to work less hard and demonstrate lower skills to get the same grades that more talented students once got. The following graph (http://gradeinflation.com/) demonstrates how badly grades and scholastic accomplishment have become unhinged:
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Consumer Credit in the American

Words: 1363 Length: 4 Pages Document Type: Essay Paper #: 6734528

Closing the loan is also known as firm commitment, and involves the completion of all key paperwork within a designated time. A closing date is set, and the closing costs are established. hen the client pays the costs and completes the paperwork, the loan is closed.

The next step is to service the loan. Servicing refers to the management of the payments. The loan creates an obligation on the part of the borrower to make payments as specified in the agreement. The role of the bank is to ensure that those payments are received. Servicing may be contracted out to a secondary party. In the U.S. that might be Fannie Mae or Freddie Mac, who provide a secondary market for mortgages. In a servicing arrangement, the bank would collect the payments and remit most of this money to the secondary market investor. The bank would keep a portion of the…… [Read More]

Works Cited:

Federal Deposit Insurance Corporation website. Retrieved April 30, 2009 from http://www.fdic.gov/regulations/laws/rules/6500-1400.html

Rajan, Raghuram G. (no date). Why Bank Credit Policies Fluctuate: A Theory and Some Evidence. University of Chicago. Retrieved April 30, 2009 from http://faculty.chicagobooth.edu/raghuram.rajan/research/fluct.pdf

Penwell, Tracy L. (2009). The Credit Process: A Guide for Small Business Owners. Federal Reserve Bank of New York. Retrieved April 30, 2009 from http://www.newyorkfed.org/education/addpub/credit.html

No author. (2009). Closing. Mortgage X. Retrieved April 30, 2009 from  http://mortgage-x.com/library/closing.htm
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Small Business - Banking Start-Up

Words: 7548 Length: 30 Pages Document Type: Essay Paper #: 8891230

Video Tape and Disc ental

entals

Catalog/Mail Order

etailing

Health and Personal Care Stores

etailing

Table 2: Comparisons of Most isky Small Business (BizStats.com, cited by Telberg, 2003)

An Engine of Economic Growth

More and more, Craig, Jackson and Thomson (2007) argue, policymakers perceive the small business sector "as a potential engine of economic growth. Policies to promote small businesses include tax relief, direct subsidies, and indirect subsidies through government lending programs." These authors stress that encouraging lending to small business purports the Small Business Administration's (SBA's) primary policy objective of the loan-guarantee program. In their study, Craig, Jackson and Thomson (2007) implement empirical research to focus on SBA-guaranteed lending, utilizing a panel data set of SBA-guaranteed loans, they assess whether SBA-guaranteed lending discernibly impacts local economic performance. Ultimately, these authors cautiously conclude that "There is a positive (although small) and significant relationship between the level of SBA-guaranteed lending in…… [Read More]

References

Authority, purpose and scope. (2002). EXTENSIONS of CREDIT by FEDERAL RESERVE BANKS (REGULATION a). Retrieved November 10, 2007, at http://ecfr.gpoaccess.gov/cgi/t/text/text-idx?c=ecfr&sid=57016e116171461106934124459aa8aa&rgn=div5&view=text&node=1-2:2.0.1.1.1&idno=12#12:2.0.1.1.1.0.1.1 http://www.questia.com/PM.qst?a=o&d=108945401

Bannock, G. (2005). The Economics and Management of Small Business: An International Perspective. New York: Routledge. Retrieved November 12, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=108945415

Bielski, L. (2006). On the Hunt for the Meaningful Segment: With a Deluge of Customer Information to Choose from, Bankers Struggle to See Their Customers in More Refined, Specific Ways. ABA Banking Journal, 98(9), 45+. Retrieved November 12, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=5017258794

Brew, J. (2007). Taxes: The Forgotten Piece of Bank Profits Investigating Two Overlooked Strategies Could Put You on Your Way to Cutting Taxes by Half. Got Your Attention?. ABA Banking Journal, 99(5), 22+. Retrieved November 12, 2007, from Questia database: http://www.questia.com/PM.qst?a=o&d=5020964964
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Securities and International Financial Management

Words: 757 Length: 3 Pages Document Type: Essay Paper #: 8654526



There are also non-qualitative, or financial risks, associated with foreign currency loans. Namely, because foreign currencies can be effected by such uncontrollable as political, governmental and natural factors, a foreign currency can suddenly change in a manner that either significantly benefits or disadvantages the borrower. For example, often time the rate of a foreign currency is based on such things as internal, regional or international political conditions. If a particular country has a significant political upheaval, the instability associated with such an event can have a negative impact on a nation's economy, which of course effects the foreign currency exchange rate and, thus, the borrowers investment. When such an event happens to a nation with a dominant currency, this change can have devastating effects on a loan, as was the case following the September 11, 2001 terrorist attacks on the United States.

Another means to reduce risk is to use…… [Read More]

Bibliography

Almekinders, Geert J. (1995): Foreign Exchange Intervention: Theory and Evidence. New York: Edward Elgar Publishing, Inc.

Eijffinger, Sylvester. Foreign Exchange Intervention: Objectives and Effectiveness. New York: Edward Elgar Publishing, Inc.
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Business Ethics Case Study --

Words: 590 Length: 2 Pages Document Type: Essay Paper #: 53332105

Michael has no moral "right" to undermine their loan evaluation process even if he genuinely believes that the lender will not be harmed by the deception. After all, beliefs are always subjective and people in Michael's position can be very sure about what they genuinely believe but still be wrong.

One need look no further than the .S. housing market in 2007 to see what can happen when peoples' beliefs about the value of property and about the ability of borrowers to pay back loans are wrong. Therefore, Michael is acting unethically to misrepresent information to the lender that the lender intends to use to determine whether or not the loan to Kokomo is safe enough to issue. Michael probably believes (honestly) that the lender simply does not understand enough about Kokomo's business processes and competitive situation to make the "right" decision. He probably feels morally justified in lying for…… [Read More]

Undoubtedly, Michael believes that his deception will not actually cause harm to anybody. On that level, his approach to securing the loan is only unethical "technically" because the lenders are entitled to use whatever criteria they want to decide how to make lending decisions. Michael has no moral "right" to undermine their loan evaluation process even if he genuinely believes that the lender will not be harmed by the deception. After all, beliefs are always subjective and people in Michael's position can be very sure about what they genuinely believe but still be wrong.

One need look no further than the U.S. housing market in 2007 to see what can happen when peoples' beliefs about the value of property and about the ability of borrowers to pay back loans are wrong. Therefore, Michael is acting unethically to misrepresent information to the lender that the lender intends to use to determine whether or not the loan to Kokomo is safe enough to issue. Michael probably believes (honestly) that the lender simply does not understand enough about Kokomo's business processes and competitive situation to make the "right" decision. He probably feels morally justified in lying for that reason.

The more ethical approach to the same situation and the one that I would prefer would be to devote the necessary effort to teach the lender about Kokomo's position and to present all of the facts that might not be apparent from the traditional information requested on the loan application. Michael should create a presentation to educate the lender so that the lender can understand that the poor past profits recorded for Kokomo are simply not a reliable indicator of the security of the loan. Michael should illustrate why the loan will enable Kokomo to become profitable and repay the loan instead of relying on unethical deception to get the loan.
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Hardship Letter Any Business Relationship

Words: 1790 Length: 6 Pages Document Type: Essay Paper #: 77963534



4. I did not obtain my current mortgage under any materially false pretenses.

As part of the Hope for Homeowners program, I would be able to attain a new affordable mortgage based on a current appraisal value. I would retain 10% equity in the property, and would be sharing the equity and future appreciation with the Federal government, which would prohibit me from taking out any additional loans against the property except for direct repairs and/or maintenance. There are also up front insurance premiums for this type of loan, which I am aware of.

If you would please consider one of these two options, I believe we can come up with a mutually satisfying solution to help avoid foreclosure on my home. I am writing this hardship letter to plead with your company to review my loan information, take into account my current financial situation, my excellent payment history prior…… [Read More]

REFERENCES

Mortgage Bankers Association. Fannie Mae Posts Conventional Mortgage Servicing Modifications (06-18). Related Documents, 2008 Mortgage Bankers Association. Website with .pdf file:

 http://fha-refinance-program.com/hope-for-homeowners.html 

http://www.hud.gov/fha/home080730.cfm http://portal.hud.gov/portal/page?_pageid=73,7601299&_dad=portal&_schema=PORTAL
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Marketing Plan Mcbride Financial Services

Words: 1281 Length: 4 Pages Document Type: Essay Paper #: 58775767

Focusing on advertising through local businesses and word-of-mouth to consumers might be difficult. Instead, regional and state-wide television, radio, and print media to alert consumers about the virtual financial company might be a way to motivate individuals to use Google to search the web to find out about the company. Establishing contacts with local realtors who might wish to advertise McBride or to advise clients of its low-cost services is another option. Even talking to business columnists of regional newspapers might help spread the world about the company in an informative setting. It would certainly add to the company' image of legitimacy, as well as allay fears about doing business online.

Advertising through Google seems like a possible option as is advertising on general information real estate websites that contain information specific to the region. Linking to area sites where homes are being sold, to the federal government's FHA and…… [Read More]

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Unfairness This Is a Short Review of

Words: 1481 Length: 5 Pages Document Type: Essay Paper #: 97840338

Unfairness

This is a short review of literature that discusses the subprime mortgage crisis which many believe had a significant impact on the financial crisis that began in 2008. The discussion will range from how the crisis started and what the banks knew might happen because of faulty legislation and greedy lenders prior to the crash, to how the crash has impacted families and how some entities have tried to mitigate it with little success.

The financial crisis that began in earnest in 2008 followed many decisions which, in retrospect, were not wise. Legislation can be traced back to the 1960s that began allowing lending companies (banks) and hedge funds to buy large numbers of mortgages and leverage them as if they were real assets (Block-Lieb & Janger, 2011). Other laws followed such as the Community einvestment Act first passed in 1977 and amended with much stronger language in 1995…… [Read More]

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 will require more careful attention. ABA Banking Journal, 97(4), 34-53.
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Sba the Small Business Association

Words: 972 Length: 3 Pages Document Type: Essay Paper #: 22989979

Of course, the FEMA application process itself was also problematic. The SBA created secure Internet-based application templates for aid to expedite the loan request process. Stress testing and plans for maximum user capacity levels was instituted within the system (SBA, 2006, GMO).

User applications were thus better 'triaged' based upon likelihood of approval, and where the loan should be directed. isk modeling was introduced, to help cope with future emergencies. The prediction of damage from a variety of types of disasters, in target locations would allow for anticipation of increased levels of demand (SBA, 2006, GMO). Unfortunately, improvement of the system was undertaken only after the backlog had been created. Unmet demand can create more demand, as businesses without critical resources can fall into more debt and see more damage being done to their businesses, as a result of the aftereffects of the disaster.

While the SBA blamed its faulty…… [Read More]

References

SBA: Actions needed to provide more timely data assistance. (2006). GMO. Retrieved August

8, 2010 at  http://www.gao.gov/new.items/d06860.pdf 

US Small Business Association awards contract to SRA. (2006, April 3). SRA. Retrieved August

8, 2010 at http://www.sra.com/news/press-releases/phoenix.zhtml?print=1&ID=837791&c=131092&highlight=&p=irol-newsArticle
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Business Ethics Recognizing and Resolving

Words: 2980 Length: 10 Pages Document Type: Essay Paper #: 81658066



The Bank CEO's ole in Defining Ethical Integrity

Based on a thorough review of existing literature of the role of ethics in the banking industry, the role of the CEO as the ethical leader of their organization is next discussion. Based on the concepts presented in the paper to this point as the foundation, these key points provide insights into how CEOs and senior management actively shape the ethical standards of the organizations they manage on behalf of shareholders.

isk Management Is a CEOs' Ethical esponsibility combination of forces -- changing regulatory expectations that open companies up to intense levels of examination, heightened stakeholder sensitivity to and scrutiny of corporate behavior, and the severity of punishment by financial markets for corporate missteps -- push reputation and ethics management onto the CEOs' and senior managements' agenda. The paradox CEOs face is when to risk the reputation and brand of the company…… [Read More]

References

John Bond (2007). A safety culture with justice: A way to improve financial performance. Loss Prevention Bulletin,(196), 31-39. Retrieved October 20, 2008, from ABI/INFORM Global database. (Document ID: 1333256011).

Donald R. Cassling (2008). Poehl v. Countrywide Home Loans, Inc. The Banking Law Journal, 125(9), 865. Retrieved October 21, 2008, from ABI/INFORM Global database. (Document ID: 1571291211).

Chris Churchill (2007). State targets lender ethics: Mortgage brokers must get training, undergo criminal checks starting next year. Knight Ridder Tribune Business News. Retrieved October 21, 2008, from ABI/INFORM Dateline database. (Document ID: 1335614991).

Greenberg, J. (1990). Employee theft as a reaction to underpayment inequity: The hidden cost of pay cuts. Journal of Applied Psychology, 75, 561-569.
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Tillman Unconscionability What Is Contractual

Words: 805 Length: 2 Pages Document Type: Essay Paper #: 40300745



Response 1: Robyn Finster

You make a good point about asymmetry of information. There was no third party made available to draw up this contract to make it equitable, or explain its terms. The Commercial Credit Loan drafted the agreement. There was no opportunity for the borrower to allow a lawyer or other individual to examine the terms of the agreement, given the pressure Commercial Credit exerted upon the borrower for an immediate signature.

Response 2: Elizabeth Laage

Your personal story indicates how even when consumers seek out information, frequently the language used is so confusing it sounds contradictory. Part of the notion of contractual unconscionability, I believe, should include consideration of language that is deliberately misleading to one of the parties. Consumers often are confused and agree to lopsided legal contracts, based upon biased information they hear, or because of the way the agreement is phrased.

Response 3: Derek…… [Read More]

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Housing Market Economic Analysis to

Words: 2240 Length: 6 Pages Document Type: Essay Paper #: 68197804

Even Fannie Mae and Freddie Mac should be made totally independent from the government. This should be followed up by other methods to increase the individual ownership of housing and at the same time reduce the costs of owning a house. Even if the housing sector cannot be made totally private, it is important that the government make statements saying that it has no intentions of supporting Fannie Mae and Freddie Mac any further, and at the same time, try to improve the operations of these two companies. This can be achieved by limiting the amount of debt that these regulatory deposit organizations can hold and also focusing clearly with the two institutions on the sections of the housing market where their activities would provide the best social benefits. (Fannie Mae, Freddie Mac, and Housing Finance: Why True Privatization Is Good Public Policy)

The weakness comes from the feeling that…… [Read More]

References

After the Housing Boom. 11 April, 2005. Retrieved at http://www.businessweek.com/magazine/content/05_15/b3928001_mz001.htm. Accessed on 30 April, 2005

Cederholm, Fred. Is the Housing Market Going to Crash? Retrieved at  http://baltimorechronicle.com/033105Cederholm.shtml . Accessed on 30 April, 2005

Federal Home Loan Bank System. Retrieved at http://www.fhfb.gov/FHLB/FHLBS.htm. Accessed on 30 April, 2005

Housing' Direct Economic Impact. 2005. Retrieved at http://www.nahb.org/generic.aspx?sectionID=784&genericContentID=543Accessed on 30 April, 2005
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Interest Paid at the Beginning of a

Words: 812 Length: 3 Pages Document Type: Essay Paper #: 97392793

interest paid at the beginning of a loan period than at the end of the loan period?

Whether an equal total payment plan is adopted or an equal principle plan, in both cases the interest paid at the beginning of a loan repayment period is more than at the end. This is because the interest is calculated on the amount that is loaned. When the first payment is made then a specific principle amount that the borrower has paid for is deducted from the total loan given. Thus the total amount loaned reduces and hence the interest on the new amount is lesser for the second payment.

Using an example of an equal principle plan, if a borrower borrows $10,000 for a repayment plan of 10 years at the rate of 10% per annum, the premium will be divided equally in 10 parts. Which means that each year $1,000 will…… [Read More]

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Credit Application Analysis

Words: 832 Length: 3 Pages Document Type: Essay Paper #: 99922587

redit Analysis Smehra

redit Analysis for Neal Harris

Neal Harris recently submitted his credit application for our consideration. Mr. Harris is 45 years old, married and has 2 children. He currently works at Franklin Industries where he has been employed as office manager for 2 years. Prior to that, he was in sales at Providencial Insurance for 3 years. Neal has resided at his current residence in Tennessee for 1 year.

His credit application has been filed in joint with his wife, Helen Harris, 43 years old. Helen has recently returned to the workforce from being a housewife. She is also employed by Franklin Industries where she has been marketing director for 4 months. Both individuals have a checking and savings account with AmSouth. The purpose of their loan is for a 2003 hevrolet Tahoe. Following is a review of the 5 's of redit for Mr. And Mrs. Harris…… [Read More]

Conclusion

After reviewing the joint credit application for Mr. And Mrs. Harris, I have drawn the conclusion that they should be granted the loan under the terms listed. These are for a loan of $24,000, repayable over 48 months at 4%, minimum monthly payment of $540. While Neal Harris has on record a Chapter 7 file in January, 2001, review of their assets and liabilities reveals that they are suitable candidates for this loan. They also demonstrate timely repayments to their current obligations which include a mortgage with Countrywide, an auto payment with Nissan, and 4 credit cards, one of which is currently at a 0 balance.

The couple is also within the 20% average for credit capacity- net income, and have also demonstrated that they will be able to take on the extra expenditure through this loan through their supplementary income listed. I recommend that AmSouth give Mr. And Mrs. Harris their requested loan under the conditions mentioned.
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Monitoring Microcreditors Monitoring of Micro-Creditors

Words: 668 Length: 2 Pages Document Type: Essay Paper #: 67072573



"Under group liability, clients have an incentive to screen other clients so that only trustworthy individuals are allowed into the program. In addition, clients will make sure that funds are invested properly and effort exerted. Finally, enforcement is enhanced because clients face peer pressure, not just legal pressure, to repay their loans. Thus, by effectively shifting the responsibility of certain tasks from the lender to the clients, group liability claims to overcome information asymmetries typically found in credit markets, especially for households without collateral" (Gine & Karlan, 2008, p.2).Social collateral becomes a replacement for financial collateral.

Additionally, the data suggests that when individuals alone have liability there is less monitoring of one another other's loans although "this lowered monitoring does not lead to higher default" statistically (Gine & Karlan, 2008, p.2).However, lenders "with weaker social networks prior to the conversion are more likely to experience default problems after conversion to…… [Read More]

Reference

Gine, Xavier & Dean S. Karlan. (2008, January). Peer monitoring and enforcement:

Long-term evidence from microcredit lending groups with and without group liability.

World Bank. Retrieved November 21, 2009 at http://karlan.yale.edu/p/bulak.pdf
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Credit Crunch on UK Residential

Words: 9799 Length: 30 Pages Document Type: Essay Paper #: 46529648

While it was generally agreed that the increase in prices was due mainly to an insufficient offer as the stock house was limited, opinions have also been forwarded according to which the buy-to-let purchases have contributed to the inflation of the house prices (Property Mark).

The debate concerning the reasons for the massive price increases for residential properties (materialized mostly between 1996 and 2005) is however still ongoing. On the one hand, there are the property bulls, who argue that the increase in the prices of residential builds is the result of natural processes of economic growth and development. In other words, they state that the increase in prices was the natural reaction to higher levels of employment, economic stability and lower interest rates. On the other hand however, sit the property bears, who claim that the increase in property prices is not linked to any economic processes, but is…… [Read More]

References:

Billington, I., 2010, 2011 set to be slow year for U.K. market, the Source, http://blogs.wsj.com/source/2010/12/23/2011-set-to-be-slow-year-for-uk-housing-market / last accessed on January 14, 2011

Blackson, S., 2005, the practical guide to total financial freedom, Volume 3, Lulu Press Incorporates, ISBN 1411620569

Blackson, S., 2005, the guide to real estate investing, Lulu Press Incorporated, ISBN 1411623835

Booth, T., 2003, the buy to let guide: how to invest for profit in residential property and manage the letting yourself, 2nd Edition, How't Books, ISBN 1857038649
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Corporate Capital Structure Decisions Are

Words: 1169 Length: 4 Pages Document Type: Essay Paper #: 21347935



Statement 3

Another important issue to consider in the contraction of debt is represented by the impact of this debt on the company stakeholders -- employees, business partners, the public, and most importantly, the share holders. The primary scope of the economic agent is that of creating value for its stakeholders, but excessive debt could jeopardize this desire, especially since debt is money that has to be repaid and it as such reduces the future levels of profitability.

At the level of value creation, a crucial aspect to be analyzed is represented by the source of the debt to be contracted. On the one hand, there is the contraction of debt through loans, which are characterized by the fact that control and ownership of the company remains intact, but payments have to be regularly made; the payments are nevertheless tax deductible.

On the other hand, there is the contraction of…… [Read More]

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Consumer Borrowing

Words: 747 Length: 2 Pages Document Type: Essay Paper #: 53045624

Consumer Borrowing -- Spending an Economy Out of a Recession

The 'answer' provided by consumer borrowing and spending during recessions and even depressions revolves around the classical, microeconomics 'answer' to what seems like an economics paradox. Namely, how does one stimulate the economy into a state of recovery, when one is faced with consumers who have less money to spend on basic goods? Consumers who may be unemployed are understandably cautions about their economic future, so how does one 'give' them money to spend and encourage producers to produce.

Neo-classical or naturalistic theories of economics have tended to stress the need for the Federal Reserve Bank to lower the interest rate. This makes it cheaper for consumers to borrow money from banks, less punitive for consumers to use their credit cards to make purchases with money they do not have at the moment, and it also gives consumers an incentive…… [Read More]

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Kim and Dan the Price

Words: 754 Length: 3 Pages Document Type: Essay Paper #: 78777177

But, the family must also consider that the interest rate is variable and is subject to inflation indexation in case of high market volatility and thus future monthly payments of the family may increase significantly if the risks of the lender increase. Presently the Federal eserve discount rate is increasing constantly and there is overall tendency to growing cost of financial resources in international markets which can further push interest rates upwards and the family will have very high mortgage servicing costs.

The renting option would include $1,400 per month plus utilities of $220 and insurance of $25, thus overall monthly payments of $1,645, while mortgage servicing and utilities costs are $2,758. Presently they are purchasing a house for $280,000 and it is expected to increase in value by 3% annually, or up to $324,500 approximately by the end of the fifth year. This means that their rental payments will…… [Read More]

References Available at   http://www.dinkytown.net/java/TaxMargin.html  

Brealey, Myers. Fundamentals of Corporate Finance, 6th Ed., McGraw & Hill, 2003. Available at
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Calculate Touring Enterprises' Weighted Average Cost of

Words: 1419 Length: 3 Pages Document Type: Essay Paper #: 6736490

Calculate Touring Enterprises' weighted average cost of capital (WACC).

Work as follows: first, compute the after-tax cost of debt, then compute the cost of equity.

WACC = E/V x Re + D/V x Rd x (1 - Tc)

Re = cost of equity

Rd = cost of debt

E = market value of the firm's equity

D = market value of the firm's debt

V = E + D = firm value

E/V = percentage of financing that is equity

D/V = percentage of financing that is debt

Tc = corporate tax rate

Cost of equity 5%

Cost of debt 10%

Total Equity- 7 million

Total debt- 18 million

Total 25 million

Determine the weightings of debt and equity in the capital structure.

Equity -28% (7 divided by 25)

Debt- 72%

Using your answers to the above questions, calculate the WACC

WACC = E/V x Re + D/V x Rd…… [Read More]

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Worry Bout Audience Analysis Word Count 1000-1250

Words: 1385 Length: 4 Pages Document Type: Essay Paper #: 88467511

worry bout audience Analysis ord Count: 1000-1250 words (This word count refers ONLY essay . It include audience analysis orks Cited page. If essay falls short minimum word count, I automatically deduct riting Informative Essay (Corresponding chapter The Little Seagull Handbook: -7) General Information An informative essay organized primary functions: report a unfamiliar topic; analyze meaning, pattern connections; explain works; explore questions answers.

Informative essay: The impact of the economic crisis upon young people

Although the consensus amongst economists is that the United States has extricated itself from the worst of the recession of 2008, the impact of the economic crisis is still palpable amongst many demographics within the United States. Recent college graduates are amongst the hardest-hit. Given the sluggish labor market, many new college graduates are struggling for work, while the previous generation was able to find jobs with much greater ease. These workers are burdened by high…… [Read More]

Works Cited

Goudreau, Nicole. "The 10 worst college majors." Forbes. 11 Oct 2012. 25 Jan 2013.

http://www.forbes.com/sites/jennagoudreau/2012/10/11/the-10-worst-college-majors/

"Help Wanted: Millions of Cloud-Skilled IT Workers Needed." Microsoft Press Release.

19 Dec 2012. 25 Jan 2013.http://www.microsoft.com/en-us/news/features/2012/dec12/12-19CloudWorkersWanted.aspx
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AAPL Issuing Corporate Bonds to Fund Dividend Increases

Words: 1053 Length: 3 Pages Document Type: Essay Paper #: 61602259

Apple: Borrower Analysis

The size of the loan that Apple (AAPL) is procuring is $6.5 billion dollars in corporate bonds (Colt, 2015) with the intention of raising another $1.6 billion through the sale of Australian currency bonds in the form of seven-year notes (Purvis, 2015). The intention of the loan is to lift share holder value through the increase of dividend payments while avoiding hefty tax payments by repatriating its stockpile of cash ($145 billion to be exact) held in offshore accounts (Ehrman, 2013).

Thus, this transaction is useful to Apple because it allows the company to maintain its significant cash reserves and to boost its stock price by giving investors greater incentive to buy. Some critics might argue that the loan does nothing to really boost the company's fundamentals (in terms of development projects) but in an age where fundamentals are increasingly insignificant (which is what happens when QE…… [Read More]

References

Colt, S. (2015). Apple just took out a $6.5 billion loan even though it's sitting on $178

billion in cash. Business Insider. Retrieved from http://www.businessinsider.com/why-apple-raised-65-billion-in-debt-2015-2

Ehrman, D. (2013). Does Apple need a loan for billions? Motley Fool. Retrieved fom http://www.fool.com/investing/general/2013/04/27/does-apple-need-a-loan-for-billions.aspx

Purvis, B. (2015). Apple raises $1.6 billion in record corporate bond deal. Bloomberg.
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Financial Analysis of Chevron From the Perspective

Words: 4187 Length: 10 Pages Document Type: Essay Paper #: 57760

financial analysis of Chevron from the perspective of a potential creditor. The issue surrounds primarily the creditworthiness of Chevron rather than the type of credit that would be issued. Specifically, the issue is whether "we" would lend Chevron 10% of its net assets. The net assets for Chevron are $209.474 billion, so the amount in question is $20.9 billion in new debt. The report will first analyze the financial statements of Chevron in general terms, focusing on trends and ratios, and drawing conclusions about the overall financial health of the company based on that analysis. The second part of the paper will outline some of the criteria that a lending institution would have for lending to a company, and then that criteria will be applied to Chevron specifically.

Chevron operates in the hydrocarbon industry, where it is one of the world's largest companies with sales of $241.9 billion and net…… [Read More]

Works Cited:

2011 Chevron Annual Report. Retrieved February 25, 2013 from http://www.chevron.com/annualreport/2011/

Chevron. (2013). Corporate officers. Chevron.com. Retrieved April 20, 2013 from http://www.chevron.com/about/leadership/corporateofficers/

MSN Moneycentral. (2013) Chevron. Retrieved February 25, 2013 from http://investing.money.msn.com/investments/stock-price?symbol=CVX&ocid=qbes

Moffat, M. (2013). What is the price elasticity of demand for gasoline. About.com. Retrieved February 25, 2013 from http://economics.about.com/od/priceelasticityofdemand/a/gasoline_elast.htm
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Government Policies Four Policies the

Words: 1065 Length: 3 Pages Document Type: Essay Paper #: 26731823



However, some people might regard my decision as unwise: after all, what 'goes up, must come down,' and interest rates will inevitably go up. I may regret not borrowing now, if I have to pay a higher rate on a car payment in the future. On the other hand, given that the low interest rates and economic stimulus have not has a seismic effect on job growth, I am still wary about spending too much, despite the fact that money in a savings account with a low interest rate is actually 'losing' value, because of the inevitability of inflation. My uncertainty about borrowing for anything other than what I absolutely need (other than student loans, which is 'spending' that does not directly result in higher levels of production in enterprise and takes me out of the full-time labor force) means that the government must find more direct ways to stimulate…… [Read More]

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1980s Affecting Corporate Finance From About the

Words: 1658 Length: 4 Pages Document Type: Essay Paper #: 71075002

1980s Affecting Corporate Finance

From about the mid 1980s, the trend has been for companies, especially large ones, in industrialized countries to seek financing directly from financial markets rather than borrowing from commercial banks. This practice was motivated by various changes affecting corporate finance (Topsy-turvy, 1986). The main external source of corporate financing currently can be traced back to these past developments although more recent developments are also important.

Two changes traced to the mid 1980s that affected corporate finance were deregulation and internationalization. Deregulation caused increases in the cost of loans from commercial banks and in the number and types of entities offering financing (Topsy-turvy, 1986). Deregulation of interest rates permitted banks to pay higher rates for deposits, eventually increasing the price for loans. Consequently, it was cheaper for top-rated companies to obtain money by issuing commercial paper than by borrowing from banks. Deregulation also allowed more entities to…… [Read More]

Reference

Gongloff, M.(2010, September 8). Blue-Chip Borrowers Issue Debt in Droves Wall Street

Journal (Online). Retrieved from http://proquest.umi.com.ezproxy.fiu.edu/pqdweb?index=0&did=2133668831&SrchMode=2&sid=2&Fmt=4&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1290691705&clientId=20175
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Fixing the Mortgage Market Over

Words: 1069 Length: 3 Pages Document Type: Essay Paper #: 74547839

This is one of the biggest causes that contributed to the financial crisis. Where, the lack of ethical standards within the industry, helped to cause a number of executives from: loan officers to real estate appraisers, to engage in predatory and illegal lending tactics. Where, many would falsify the income, credit histories or out right lie to borrows about the mortgages they were receiving, along with the terms. This perpetuated the crisis as millions of bad loans were given to borrowers who did not qualify or could not afford the mortgage, if there was a change in interest rates or the economic landscape. ("Financial Reform") to prevent this situation in the future, the regulation of the entire real estate industry should fall under the jurisdiction of the federal government. Where, the SEC or the Federal Reserve could oversea the proper training standards in the industry. Under this kind of system,…… [Read More]

Bibliography

"Financial Reform."New York Times. 2010. Web. 21 May 2010.

"Record Number of Foreclosures in 2009." International Business Times. 2010. Web. 21 May 2010.

Finney, Denise. "Mortgage Fraud." SF Gate. 2010. Web. 21 May 2010.

Phillips, Matthew. "The Monster that Ate Wall Street." Newsweek. 2008. Web. 21 May 2010.
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Asian Currency Crisis the Objective

Words: 2684 Length: 8 Pages Document Type: Essay Paper #: 62844583

Resulting from the devaluation of China's currency was an exacerbation of problems throughout Asia.

VII. 1995-96 -MINI-RECESSION, DET PROLEM, ACCUMULATION

In the summer of 1995, the reversal of the chronic weakness of the dollar resulted in the depreciation of the Japanese yen, which had been approaching an acute deflationary crisis with a steep fall in the stock market. (Makin, 2000; paraphrased)

VIII. 1996-97 - DET / FOREIGN EXCHANGE, RESERVE RATIONS DETERIORATE

The work of Williamson (1999) entitled: "Implications of the East Asian Crisis for Debt Management" relate that a countries debt can be viewed from four different external perspectives in terms of debt composition which include: (1) FDI; (2) Portfolio Equity; (3) Long-term loans; and (4) short-term loans. This is the ideal composition of a countries debts however the debt profile of countries in East Asia are known to profoundly differ from the foregoing profile in that they had too…… [Read More]

Bibliography

Banking System Developments in the Four Asian Tigers (1997) Economic Research and Data. Federal Reserve Bank of San Francisco. 8 Aug 1997. Online FRBSF Economic Letter. Available at http://www.frbsf.org/econrsrch/wklyltr/el97-22.html

Barro, Robert J. (1998) the East Asian Tigers Have Plenty to Roar About. Economic Viewpoint Business Week 27 Apr 1998. Online available at http://www.economics.harvard.edu/faculty/barro/files/bw98_04_27.pdf

Hughes, Christopher W. (1999) Japanese Policy and the East Asian Currency Crisis: Abject Defeat or Quiet Victory. 1999 February Online available at http://www2.warwick.ac.uk/fac/soc/csgr/research/workingpapers/1999/wp2499.pdf

Hughes, Christopher W. (1999) Japanese Policy and the East Asian Currency Crisis: Abject Defeat or Quiet Victory. CSGR Working Paper No. 24/99. February 1999. Online available at http://www2.warwick.ac.uk/fac/soc/csgr/research/workingpapers/1999/wp2499.pdf
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Economics of Banking General Economic

Words: 737 Length: 3 Pages Document Type: Essay Paper #: 93021384

e. no standardization) b) Diamonds: good medium of exchange

Peaches: perishable, differences in quality (i.e. no standardization) d) Grade a Honey: differences in quality (i.e. no standardization), difficult to transport e) Ice in a warm climate: perishable, difficult to store a. Over the long run, what is the primary determinant of the price level? Supply and demand, with price acting as an equilibrator b. Over the long run, what is the primary determinant of inflation?

The supply of money as compared to changes in productivity.

c. How is inflation related to the nominal interest rate?

Expectations of future inflation are one of the key factors in determining the nominal interest rate, the other being the 'core' interest rate, or the inflation-free level at which one is willing to lend money (which differs according to the issuer and associated risk premium).

4. Describe each of the following financial institutions. If it…… [Read More]

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Accounting Goals of the Firm

Words: 1610 Length: 6 Pages Document Type: Essay Paper #: 33709352



b. An issue of bonds that is sold simultaneously in several countries is traditionally called a (n) eurobond.

c. If a lender ranks behind the firm's general creditors in the event of default, the loan is said to be subordinated.

d. In many cases a firm is obliged to make regular contributions to a (n) sinking fund, which is then used to repurchase bonds.

e. Most bonds give the firm the right to repurchase or call the bonds at specified prices.

f. The benchmark interest rate that banks charge to their customers with good to excellent credit is generally termed the prime rate.

g. The interest rate on bank loans is often tied to short-term interest rates. These loans are usually called floating-rate loans.

h. Where there is a (n) private placement, securities are sold directly to a small group of institutional investors. These securities cannot be resold to individual…… [Read More]