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Mortgage Fraud
If a rash of armed bank robberies swept across merica next year, and if in these robberies criminals absconded with $30 billion dollars, one may be certain that a public panic would ensue. The banking system would likely be changed forever. If thousands of armed thugs went rampaging across the nation forcing people out of their homes, into the streets, and then destroying the properties, leaving the occupants homeless -- well then one might be certain that fear would force our society to adapt its proceedings and its policies to fight this thuggish threat. Yet in many ways this is precisely the situation currently occurring with recent rise in mortgage fraud and abuse. Certainly, the criminals are armed with paperwork instead of shotguns, but the impact they are having is no less real. "uthorities have stated that fraud is involved in $60 billion in loans annually, resulting in…
ACORN. 2004. Separate and Unequal: Predatory Lending in America.
Association of Community Organizations for Reform Now, February.
The way in which appraisals are based on the racial "desireability" of neighborhoods is an essay to itself.
That is, if the interest rates rise to the point that the monthly mortgage payment does not cover the interest due, any unpaid interest will be added to the loan balance, so the loan balance increases. However, one also has the option to pay the minimum monthly payment, or the fully amortized amount due.
The advantage of negatively amortizing loans is that one can control cash flow with a relatively stable payment, take advantage of low interest rates relative to the market at any given time, and pay back the money borrowed today at a depreciated value years from now because of natural inflation.
With most AMs, the interest rate can adjust every 6 months, once a year, every 3 years, or every 5 years. The interest rate on negatively amortized loans can adjust monthly. A loan with an adjustment period of 6 months is called a 6-month AM, with…
References
Dudney, D., M.O. Peterson, and T. Zorn. "Mortgage Debt: The Good News." Journal of Financial Planning. September (2004): Article 7.
Goff, D.C., and D.R. Cox. "15-Year Versus 30-Year Mortgage: Which Is the Better Option?" Journal of Financial Planning. April (1998): Article 13.
Leggett, W.G. "A Few Questions to Ask Yourself before You Go Mortgage Shopping." Ont Dent 75.7 (1998): 41-3.
Leviton, R. "Reverse Mortgage Decision-Making." J. Aging Soc Policy 13.4 (2001): 1-16.
Mortgage Refinancing
There is a spurt of mortgage refinancing activity in recent times, thanks to interest rates remaining low and more or less consistent over a significant time horizon, appreciation of house prices and the easier refinancing options available in the market. This paper attempts to trace the various issues that influence the homeowner's decision to refinance. The pros and cons of 30-year mortgage vis-a-vis 15-year mortgage are discussed from different perspectives. From a homeowner's perspective the benefits and drawbacks of fixed-rate mortgage and adjustable-rate mortgage are analysed. This analysis is made with reference to basic financial principles - the self-interested behaviour, the principle of incremental benefits, risk-return trade-off and the time value of money. Refinancing makes available fresh capital to the homeowners giving them the opportunity to use it for spending or investing for returns.
Soft interest rates and increasing property prices in recent years have resulted in sharp…
Bibliography
Brady, P, Canner, G and Maki, D. (July 2000) 'The effects of recent mortgage refinancing', Federal Reserve Bulletin, pp 441-450
Financial Times. (March 3, 2004) 'UK house prices move up a gear despite, rate rises', Available from www.ukbiz.yahoo.com/040303/66/enk5x.html. Accessed on 03/30/2004
FRBSF (Federal Reserve Bank of San Francisco) (October 2003) Economic Letter - 'Mortgage Refinancing', Available from www.frbsf.org. Accessed on 03/30/2004
Hurst, E and Stafford, F (2002) - 'Home is Where the Equity is: Mortgage Refinancing and Household Consumption," in (ed) Krainer, J and Marquis, M - 'Mortgage Refinancing', 2003-29: FRBSF Economic Letter, October 2003
Even worse, the entire process of due diligence with respect to qualifying potential mortgagees carefully to avoid bad risks and of appraising property as accurately as possible dissolved by virtue of the immediate and routine transfer of mortgage instruments to third parties. ealtors began encouraging borrowers to misrepresent their financial information as well as the value of their intended property acquisitions, further inflating the so-called "housing bubble." More importantly, the inflated values were largely illusory rather than reflective of actual property values after diligent appraisal.
In addition to borrowers hoping to make a quick profit, many thousands of ordinary middle class Americans began to take advantage of the lapses that developed in the mortgage lending industry, not uncommonly with encouragement from realtors and lenders who deliberately failed to disclose the meaning of variable interest rates.
Eventually, the housing bubble burst when the supply of so many new housing developments outpaced…
References
Gallegati, M., Greenwald, B., Richiardi, M., Stiglitz, J. (2008) the Asymmetric Effect of Diffusion Processes: Risk Sharing and Contagion; Global Economy Journal: Vol.
8, No. 3. Halbert, T., Ingulli, E. (2005) Law & Ethics in the Business Environment. Cincinnati: West Legal Studies. Kuttner, R. (2008) Debt Again: The Mortgage Crisis Has Surprising Roots That Go Back Decades. Why We Need to Rethink How We Buy Our Homes; the Boston Globe, August 19, 2007.
Mishkin F. (1999) Lessons from the Asian Financial Crisis; National Bureau of Economic Research, Working Paper No. 7102.
Reinhart, C., Rogoff, K. (2008). This Time is Different: A Panoramic View of Eight
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)…
Bibliography
55 Colleges Under Investigation for Unethical Student Loan Practices (2007) Education Portal. 2 Nov. 2007. Online available at
Mortgage Crisis
The Mortgage Meltdown and the U.S. Economy
This paper reviews the subprime mortgage crisis and its effect on the U.S. economy.
The subprime mortgage crisis first gained the public's attention when a steep rise in home foreclosures occurred in 2006, and then spiraled out of control in 2007. At that time the mortgage meltdown triggered a national financial crisis that went global within the year. As a result, consumer spending dropped, the housing market plummeted, foreclosure numbers rocketed, and the stock market was shaken. All these problems have caused furious debate among consumers, bankers, and lawmakers as to the causes and the possible solutions.
There are various theories to explain what led to the mortgage crisis. Many experts and economists believe that the crisis happened because of a number of factors in which subprime lending played a significant role.
The current mortgage meltdown began with the bursting of…
Financial Crisis Inquiry Commission. Financial Crisis Inquiry Report (pp. xviii -- xxv). New York: Public Affairs, 2011.
Mhatre, Pratik. "Impact of Subprime Mortgage Meltdown on Location and Volume of Home Foreclosures." 2011. Urban Planning Blog. 15 April 2011.
Schoen, John. "Housing market stirs, but holds economy back." 2011. MSNBC.com. 15 April 2011. < http://www.msnbc.msn.com/id/41180293/ns/business-eye_on_the_economy/ >
Mortgage servicers are mandated with the responsibility of collecting payments from the mortgage borrower and transferring the payments to the loan owners (Consumer Financial Protection Bureau, 2016). When carrying out their responsibilities, mortgage servicers are required to comply with regulations established by the Consumer Financial Protection Bureau (CFPB) and federal consumer right law. Compliance with these regulations help in ensuring that mortgage servicers carry out their operations in a proper and legal manner. This paper examines compliance issues facing mortgage servicers in two different scenarios based on CFPB regulation and federal consumer right law.
Rachel’s Case
Based on the information provided in Rachel’s case, the major issue is the unavailability of information on payment history for her loan before it was transferred to LandX. The federal regulation that was violated in this scenario is regulation regarding transfers. In this case, Rachel’s loan was transferred to LandX as part of loan…
Debt Consolidation Specialist: This individual, if qualified and reliable is likely to be found through referral of the school one is attending. One may also contact local government offices for referrals to a good debt consolidation specialist. Information may also be found on the Internet concerning debt consolidation services.
Grants: government funding that does not have to be repaid.
Scholarships: college funding that does not have to be repaid in the form of sports scholarships, scholarships won in beauty pageants and other contests and events, and scholarships presented by civic organizations and businesses to students to assist their funding for college.
ASA - the ederal Student Loan Application for ree College unding.
I. EDUCATION SPENDING and EDERAL INANCIAL AID mere generation later, "state spending on higher education is at a 25-year low and federal financial aid is increasingly debt-based, with only 38% in the form of grants." (Draut, 2008) Students…
Federal Financial Aid Comparison 1980 and 2004
Source: Draut (2008)
Draut relates the fact that in decades past the term 'real job' "used to mean the first job you got after completing school. A real job allowed you to pay rent, buy groceries, make car payments, and have enough left over for spending money. A real job also came with fringe benefits such as health care and some type of retirement savings plan." (2008) This is however, no longer the reality as individuals in their twenties and thirties quickly realize. According to Draut, today's full-time worker incomes for those ages 25 to 34 are lower today than they were a generation ago, except among workers with college degrees." (2008) Today's young male workers who had only a high school education "earn 29% less than they did in 1974..." (Draut, 2008) partial explanation for the decreasing pay levels among workers today is the "disappearance of
The focus in the meeting between the parties to the dispute is the initiative of formulating a solution that is agreeable to both parties in lieu of their own individual desire in relation to their 'side' of the matter. Oftentimes coalitions are formed in the negotiations of a 'multi-party nature.
The mortgage company will be bound by certain Federal regulations in their handling of all types of disputes that would be affected by the Fair Debt Collection Practices Act. The contracts of most mortgage companies have specific stated provisions for arbitration and mediation which are both alternative dispute resolution methods. Mediation is the process of resolution with an impartial facilitator while Arbitration is a process in which the impartial party makes the decision which is binding on the parties. There are other aspects of legality in the ADR Process of a mortgage company. One of these is the "agency" or…
Bibliography
Payson, Martin (1999) "Explore the Benefits of Alternative Resolution" Inc. May 1999 [Online] available at http://www.inc.com/articles/hr/emp_p olicy/emp_d spute / 15222.ht m lInc.
Mediate, Arbitrate of Litigate? (2002) Graziadio Business Report [Online] 2002 Summer Edition available at http://gbr.pepperdine.edu/023/arbitration.html .
Crane, Amy B. (2004) Arbitration Clauses: A Rights Giveaway [Online]available at Bankrate Website http://www.bankrate.com/brm/news/advice/20041117a1.asp?print=on
Dispute Resolution - Trade Practices and Fair Trading (2004) located at http://www.industry.gov.au/content/itrinternet/cmscontent.cfm?ObjectID=9018E848-D3A
Mortgage modification has been in practice in the United States in some form or another for years. The process entails modification of the terms of a mortgage separate from contract and original terms agreed to by both borrower and lender. The United States government has provided Americans with various versions of loan modification to help borrowers make payments via reduction of interest rates or principal balances. However, several recent news articles state the efforts of the American government have been in vain. The negative effects of mortgage modification have led to increasingly risky lending and removal of annual stress test fines for smaller banks leading to some banks' lending to borrowers with poor credit scores.
A New York Times article by Matthew Goldstein opens the discussion with exploration of the recent activity of Lone Star and Caliber concerning the mortgage market and issuing mortgages to borrowers that have poor or…
References
Goldstein, M. (2016). Caliber Home Loans Embraces Borrowers With Spotty Credit. Nytimes.com. Retrieved 2 December 2016, from http://www.nytimes.com/2016/09/08/business/dealbook/caliber-home-loans-embraces-borrowers-with-spotty-credit.html
Mui, Y. & Merle, R. (2016). With Treasury candidate come possible conflicts. Washington Post. Retrieved 5 December 2016, from https://www.washingtonpost.com/business/economy/candidate-for-treasury-secretary-helped-run-bank-that-is-accused-of-bias/2016/11/17/6c7dab5e-acd6-11e6-a31b-4b6397e625d0_story.html?utm_term=.8f81f7813c4f
Tracy, R. & Ensign, R. (2016). Fed to Ease Stress Tests for Regional Banks. WSJ. Retrieved 5 December 2016, from http://www.wsj.com/articles/fed-to-ease-stress-tests-for-regional-banks-1474904701
mortgage default (Elul, Souleles and Chomsisenghept). This model suggests that home owners should only ever default if they have negative equity in their residence. If there is negative equity, then there would be an incentive for the borrower to walk away from the property. However this also does not consider subsidiary effects such as the impact upon the person's credit or the possibility that the property could regain equity in the medium or long-term. Furthermore, other researchers have also proposed that other factors such as being illiquid would also provide a motive for someone to default on their mortgage. A combination of these two variables would also act to amplify the incentive to voluntarily default; and of course being so illiquid that there is no possibility to make a mortgage payment virtually guarantees that a default will occur.
Although this research paper does not necessarily define its hypothesis directly, it…
Works Cited
Elul, R., et al. "What "Triggers" Mortgage Default?" American Economic Review (2010): 490-494. Web.
My student loan payments of $609.07 are scheduled to begin May 1, 2009. I do not have the resources to make these payments and Chapter 7 Bankruptcy does not affect student loans.
Since I have been stretched beyond my financial capacity, I am now consistently behind in my mortgage payments and am not in a situation to rectify this problem. I am paid on the 15th and 30th of each month and because I am so overextended, I can only make my payment on the 30th of each month. Due to my now chronically late payments, I am now subject to $136.44 in late fees every month, which I can ill afford. I am facing eminent foreclosure if I am unable to change the terms of my mortgage.
I believe my circumstances make me an excellent candidate for the Hope for Homeowners Act. The Affordabilty vs. Value portion of this…
REFERENCES
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
secondary mortgage market in detail. It puts light on the functioning of secondary mortgage market. It also discusses different tools that are used in this market and the benefits and drawbacks of this market. This paper also highlights some of the secondary mortgage market organizations and agencies. The evolution and growth of secondary mortgage market has also been discussed in this paper.
The secondary mortgage market is a place where the investors buy mortgage loans from the originators. An originator itself can be an investor also, by buying the loans provided by other originators. An originator can also sell these loans to an intermediary, who then converts these loans into securities and sell them to other people. It is a place where the mortgages originated in the primary mortgage market are resold. The already issued notes are also sold in the secondary mortgage market. These notes are purchased by the…
References:
Websites
Jean Cummings, & DeniseDiPasquale. (1997, June 4). A Primer on the Secondary Mortgage Market. Retrieved from http://www.cityresearch.com/pres/smm.pdf.
Michael J. Lee. (n.d.). Secondary Mortgage Markets: International Perspectives. Retrieved from http://www.housingfinance.org/uploads/Publicationsmanager/SecMort-2.pdf .
The Secondary Mortgage Market. Retrieved from http://www.google.com.pk/url?sa=t&rct=j&q=role%20of%20secondary%20mortgage%20market&source=web&cd=16&ved=0CDwQFjAFOAo&url=http%3A%2F%2Fwww2.cob.ilstu.edu%2Fjwtrefz%2FFIL360%2FJSECMTGM.DOC&ei=Lr5lUOyKNc23hAf03IHoBw&usg=AFQjCNFFdYFh4QW78TZvyORDUy6JckieZA
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.…
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
This would be only natural for central bankers, as wealth effects may be a very relevant factor in determining fluctuations in aggregate demand. Studies on wealth effects have been conducted in recent years, also in the ank of Italy, making use of household surveys. For a given level of net worth, the wealth effect may be defined as the extent to which household consumption changes in response to a change in asset prices relative to the general consumer price level. Conceptually, this is no different from the old Pigou effect, but while that worked through changes in consumer prices that reduced the "value" of money balances in real terms, we now have asset prices rather than consumer prices as the main factor. While consumer prices may be relatively stable, asset prices could move substantially, and the wealth effect could actually be a destabilizing rather than, as was once thought, a…
Bibliography
Deaton, Angus (2005) Franco Modigliani and the Life Cycle Theory of Consumption. Research Program in Development Studies and Center for Health and Wellbeing. Princeton University. Online available at http://www.princeton.edu/~deaton/downloads/romelecture.pdf
Fessler, David (2008) How Reverse Mortgages Could Help Fund Your Retirement. Contrarian Profits. 24 Oct 2008. online available at http://www.contrarianprofits.com/articles/how-reverse-mortgages-could-fund-your-retirement/6947
Hugh, Edward (2008) Have We Seen 'Peak' Italian Retail Sales? Europe EconoMonitor 3 Sept 2008. Online available at http://www.rgemonitor.com/euro-monitor/253471/have_we_seen_peak_italian_retail_sales
Le Goff, Philippe (2003) the Reverse Mortgage: A Solution to Retirement Funding? Economics Division. 14 Feb 2003. Parliamentary Research Branch. Online available at http://dsp-psd.pwgsc.gc.ca/Collection-R/LoPBdP/PRB-e/PRB0259-e.pdf
) This insurance is paid at a fixed 2% of the loan value or can be financed in the mortgage at 2.5% of the mortgage.
Other look-alike programs ask that the loan be paid back during the life of the borrower, and this is entirely unlike the traditional HECM program, designed to allow the elderly an additional source of income during their lifetime.
The pluses of reverse mortgage is that the individuals may remain in their home, living much like they have in the past but be able to support themselves better and maintain the home more easily. Many individuals in retirement that outlive their savings and/or pensions tend to feel trapped to sell the only asset they have, a low or no mortgage home as a result of limited resources for medical care and increased cost of living. The Reverse mortgage program if done right can greatly help such…
Works Cited
Carr, M. Anthony. "Reverse Mortgages Can Trap the Unwary." The Washington Times 10 Sept. 1999: 13.
A www.questiaschool.com/PM.qst?a=o&d=5000416613
Cocheo, Steve. "Reverse Mortgages Shift Up a Gear." ABA Banking Journal 88.10 (1996): 77.
HUD Website "About Reverse Mortgages" (2006). http://www.hud.gov/offices/hsg/sfh/hecm/hecmabou.cfm
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,…
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.
Banks
Improper Foreclosure and Mortgage Practices in the Banking Industry
Efficient Market Hypothesis
Real Estate Bubble
Sub-Prime Mortgages
Overview on the Value of Banks
Arguments against Financial Intermediaries
Ethical Violations
This research paper aims to shed light into what led to the global financial collapse that, for the most part, began in the U.S. housing market and the ethical implications that followed. Many researchers agree that the primary drivers that led to the real estate crisis was the lifting of the Glass Steagall Act, the fostering of sub-prime lending, and the creation of derivatives and credit default swaps which were used as complex financial instruments. This offered the big five banks an entire new range of operating opportunities. All of these financial tools were justified by the efficient market hypothesis and as a consequence provide evidence for the lack of a truly efficient market. As a result of the financial…
Works Cited
Ball, R. "The Global Financial Crisis and the Efficient Market Hypothesis." CFA Digest (2010): 44-45. Web.
Bauman, S., M. Conover and R. Miller. "Growth vs. value and large-cap vs. small-cap stocks in international markets." Financial Analysis Journal 54.2 (1998): 75-89.
Beers, B. "End the Fed, Save the Dollar: Ron Paul." 7 September 2009. CNBC. Web. 19 March 2012.
Chen, B. And F. Kaboub. The Repeal of the Glass-Steagall Act and the Subprime Mortgage Crisis. 8 February 2012. Web. 19 March 2012.
pproximately 2 million Subprime borrowers and 80% of them will have their mortgages reset to higher interest rates before the end of 2008.
pproximately 3 million Subprime borrowers and 90% of them will have their mortgages reset to higher interest rates before the end of 2008.
pproximately 4 million Subprime borrowers and 75% of them will have their mortgages reset to higher interest rates before the end of 2008.
pproximately 4.5 million Subprime borrowers and 85% of them will…
Approximately 4 million Subprime borrowers and 75% of them will have their mortgages reset to higher interest rates before the end of 2008.
Approximately 4.5 million Subprime borrowers and 85% of them will have their mortgages reset to higher interest rates before the end of 2008.
The answer is C
Balancing Mortgage ates
Problems Faced While Balancing Mortgage ates
In general terms the monetary policies that contradict themselves mostly involve the process of changing the amount and level of the supply of money in a particular country. When it comes to talking about the expansionary monetary policy, it means that it expands and increases the flow and supply of money, then the impact it has on the monetary policies is that the flow or supply money decreases and hence so does the currency (Fisher, 1932).
Expansionary Monetary Policy
In the U.S., when the government wants to increase the supply of money, it can do so with a combination of three points.
By purchasing various securities from the open market which are also known as the open market operations
It can also be done by lowering the discount rate by the federal government.
It can also be done by lowering the…
References
Easton, B.H. (2011). Growth and Recessions of Economic Output: 1861-1939 (website tba)
Economic Committee (1932) Report.
Eggertsson, G.B. & Krugman, P. (2010). Debt, Deleveraging, and the Liquidity Trap: A Fisher-Minsky-Koo Approach
Eisner, Robert (1988). How real is the Federal Deficit? New York, The Free Press.
Also contributing is the temporal immediacy -- although the reps had known changes were coming, the firings were immediate. The proximity level was high, since the changes had direct impacts on the sales reps and their staff, with a ripple effect throughout the organization. The concentration of the impact was high as well -- many others in the company had their jobs spared, and may even have benefited. The sales reps themselves were directly targeted. Each of these factors contributes to a high degree of ethical intensity.
4. Walsh and Mangel arrived at their decision in part by trial-and-error and in part by developing a strategy. Their first decision -- to transition with both salaried reps and commissioned ones -- was the trial and error component. While there was forethought, there was no research and no concrete decision-making process that lead to that decision. As a result, the decision was…
Part I
Relevant Facts
The facts that are relevant to Benner’s spot delivery claim are (Session 6: Buying a Car):
1) On January 13, 2016, Plaintiff bought a 2012 Chrysler 300 (“the vehicle”) from Defendant
2) When Plaintiff bought the vehicle, she signed a retail purchase agreement and a retail installment sale contract. See Exhibit 1, “Contract.”
3) According to the contract, the Plaintiff agreed to a total sale price of $29.860.80. 10. Of the $29,860.80, $300.00 was a dealer processing charge.
4) The interest rate on the contract was 23.25 percent.
5) On January 13, 2016, Defendant told Plaintiff that Americredit Financial Services Inc. (“Americredit”) would be financing her vehicle.
6) As part of the retail installment sale contract Defendant assigned his interest in the vehicle to Americredit.
7) That same day, Plaintiff and Defendant signed an “Agreement to Provide Insurance” that indicated that Americredit required
the Plaintiff to…
Speech to Support Mortgage for Independent Spanish Village
The focus of this study is to consider the scenario of making a choice in the use of inheritance money and specifically to gain a mortgage for an independent villa which will be a town or villa in realengo and to compose a speech to support this objective
Speech
It is my belief that gaining a mortgage for an independent villa is the most appropriate approach to investing of my inheritance money. For to do otherwise would be to render my inheritance under the control of another individual who will hold all power and decision-bearing capacity and who will not be as interested in the profitability or long-term success of the villa since they do not in reality hold ownership to the property. Under the system of feudalism which is a "social system of rights and duties based on land tenure and…
Bibliography
Stubbs, William (nd) A General Overview: Its Frankish Birth and English Development. Retrieved from: http://history-world.org/feudalism.htm
I have had to take a 15% cut in pay in order to continue working and, while I have continued to make the mortgage payments with my reduced income, other areas of my life have suffered from the scaling down of available monies. I have incurred expenses which have increased my debts, such as rising interest rates and penalties, emergency medical expenses and still have student loans to pay for, as I seek to improve my lot. As a result, my credit score has decreased from 740 to 501. Exacerbating the financial problems I am facing, I have just discovered that the property which is mortgaged is worth 5-10% less than the amount paid for it, which would make it difficult to refinance. However, I wish to point out that I have continued to make my payments in spite of my troubles, and therefore deserve the benefit of your trust.…
Works Cited
Mortgage Bankers Association. Fannie Mae Posts Conventional Mortgage Servicing Modifications (06-18). Related Documents, 2008 Mortgage Bankers Association. Website with.pdf file: http://www.mortgagebankers.org/NewsandMedia IndustryNews/45725.htm
Option one Mortgage
Enter the Fed, Yet Again
Unable to understand that rapid interest rate moves create shocks to the market, resulting in distortions in supply and demand, the Fed dealt with the bursting of the housing bubble by lowering interest rates rapidly, this time to next to nothing. This response was intended to stimulate the economy. In 2001, the rate decreases were also intended to stimulate the economy, but they mainly stimulated one sector. The Fed's goal with the most recent round of drastic rate cuts is to stimulate lending. The rate cuts came when the scope of the crisis was just becoming apparent. The rapid reaction this time was met with skepticism from markets. here before there was at least one strong sector in which to invest excess capital, this time there were none. orse, the mistakes of the past few years had put banks in a position where they could…
Works Cited:
Knowledge @ Wharton: Inside the Subprime Crisis website, various pages. (2008). Wharton School of Business. Retrieved December 2, 2009 from http://knowledge.wharton.upenn.edu/special_sections/subprime/
Bureau of Economic Analysis. (2009). Gross domestic product: Third quarter 2009. BEA. Retrieved December 2, 2009 from http://www.bea.gov/newsreleases/national/gdp/gdpnewsrelease.htm
Shiller, R. (2005). Origin of the Term. Irrational Exuberance. Retrieved December 2, 2009 from http://www.irrationalexuberance.com/definition.htm
Boeri, T. & Guiso, L. (2007). Subprime crisis: Greenspan's legacy. Vox EU. Retrieved December 2, 2009 from http://www.voxeu.org/index.php?q=node/488
ethical and legal issues regarding sub-prime mortgage lenders. Unfortunately, the focus has been inordinately upon the poor individuals who were exploited by accepting these predatory and exploitive loans o highlight & copy (Goolsbee, 2007) . Simplistically, they have been blamed for the recent U.S. financial meltdown. The emphasis needs to be focused upon the mortgage lenders themselves. hile exploitation of such individuals is bad enough, to make matters worse, they are having the entire economic collapse based upon them. This is not only unfair, but inaccurate. The holders of subprime loans did not come up with the system of bundling whereby their loans were wrapped with other regular loans and with risky no-mortgage products. Needless to say, the regular mortgage loans camouflaged the risky assets. However, worst of all, the victims of subprime loan exploitation who lost their homes and their jobs will now have their government benefits taken away…
Works Cited
Gad, S. (2007, July 10). The skinny on subprime. Retrieved from http://www.fool.com/investing/value/2007/07/10/the-skinny-on-subprime.aspx .
Eichler, A. (2011, July 11). Private investment firms lending to subprime borrowers again . Retrieved f rom http://www.huffingtonpost.com/2011/07/12/subprime-lending_n_896229.html .
Goolsbee, A. (2007, March 29). 'irresponsible' mortgages have opened doors to many of the excluded .
Retrieved from http://www.nytimes.com/2007/03 .
Defense of the Fed's New Interest-ate Policy, which was published by The Wall Street Journal on January 6th, 2013, financial reporters Frederic S. Mishkin and Michael Woodford carefully craft a justification of the Federal eserve's latest revision to its federal-funds rate target. The purpose of the article is to inform readers about the Fed's recent Federal Open Market Committee (FOMC), which resulted in the decision to keep the federal-funds rate near zero with a contingency based on the national unemployment and inflation rates. By linking the federal-funds rate target to a baseline of 6.5% unemployment, and a predicted rate of 2.5% inflation, while also providing public notice regarding its previously private policy criteria, the Fed is renewing its efforts to stabilize an economy battered by a prolonged recession. As Mishkin and Woodford state in the article, this "commitment not to raise rates in the future as soon as might have…
References
Mishkin, F.S., & Woodford, M. (2013, January 06). In defense of the fed's new interest-rate policy. The Wall Street Journal. Retrieved from http://online.wsj.com/article/SB10001424127887324274404578211832381399400.html
Yoon, A. (2013, January 28). Private mortgage market gains momentum after the crisis. The Wall Street Journal. Retrieved from http://online.wsj.com/article/BT-CO-20130128 - 711413.html
Owning a home is one of the core tenets of the American dream. As of , nearly 64% of Americans owned their home indicating just how important this asset is to American culture. Fueling the recent rise in homeownerships rates are record low interest rates. These record low interest rates have encouraged a record number of Americans to engage within the homeownership process. Low interest rates allow more individuals to borrower for the purchase of a home. With lower interest rates, consumers can afford much higher home prices as their monthly debt service payments will be low. Likewise, those who already own a home are able to refinance their home if they are paying a higher interest rate to begin with. Each of these elements have fueled a very robust mortgage market that has persisted even throughout the pandemic.As the article indicates, consumers chose mortgage rates in an effort to…
References 1. Abrahams, S.W. (1997) The new view of mortgage prepayments: insights from analysis at the loan-by-loan level, J. Fixed Income 7 (2): 821.2. Alexander, W.P., S.D. Grimshaw, G.R. McQueen & S.A. Slade (2002) Some loans are more equal than others: third party originations and defaults in the sub-prime mortgage industry, Real Estate Economics, 30 (4): 66797
Mortgage Communications Director
Colleagues:
We have before us both a significant challenge and a tremendous opportunity. The first few weeks of a new operation can establish the course that the company will follow for years to come and so I'm very excited to have been hired as the new Director of Communications for this group of mortgage professionals who are taking over this mortgage group. We have a number of key issues immediately before us and I will be issuing a series of memos to address these in turn.
This first memo addresses the most pressing need facing our Group, which is the need to raise $3 million in capital to complete the acquisition. This must be done quickly or a number of key personnel will be lost. While the company has some real assets - including its name, its current contractual agreements and its IT system, the real worth…
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…
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.
Deficiencies in Organizational Management That esulted in the Economic Meltdown
Since the onset of the global financial crisis, everyone wanted to know what happened and what caused the entire situation. Analysts, economists and experts have all come up with many different reasons and explanations for what triggered the meltdown. To some extent many of these are intertwined and connected to another. Organizations such as Bear Sterns, Lehman Brothers, Freddie Mac and Fannie Mae were flawed at similar regions. In other words, there was a common denominator that ultimately led to the crisis for all these corporations. A fundamental error which is present in nearly all of the organizations which were directly to blame for and were directly affected is the problem of governance and management within organizations. As the companies and firms were not managed in a sustainable and healthy manner, their minor everyday errors built up and lead to…
References
Berrone, P. (2008). Current Global Financial Crisis: An Incentive Problem. Occasional Paper,. [e-book] Madrid, Spain: Unversity of Navarra. http://www.kantakji.com/fiqh/Files/Markets/p109.pdf [Accessed: 30th July, 2013].
Buiter, W. (2009). Lessons from the Global Financial Crisis For Regulators And Supervisors.. [e-book] Available through: London School of Economics and Political Science http://eprints.lse.ac.uk/29048/1/Lessons_from_the_global_financial_crisis.pdf [Accessed: 30th July, 2013].
Clarke, T. (2010). Recurring Crises In Anglo-American Corporate Governance. Contributions to Political Economy, 29 pp. 9-32.
Kirkpatrick, G. (2009). The Corporate Governance Lessons from the Financial Crisis. Financial Market Trends, 1.
The article that was written by Conley (2011) discusses the impact that collateralized debt obligations (CDO's) would have upon the subprime loans. These were created in 1987, by the Wall Street firm Drexel urnham. In this product, the investment bankers would take a number of different articles and combine them together as one investment. The various assets that were used included: junk bonds, mortgages and other high yielding investments from the debt. The idea with these different products is that the investment bank could offer customers a stated return on their investment. The way it worked is the brokerage firm would distribute each investor, the stated amount of returns that they would make off of the tranche (the CDO investment). This was derived using a complex mathematical formula that would divide the total amount of interest that was received, from the various high yielding products that were inside the CDO.…
Bibliography
Case Study, 2011, Investopedia. Available from: [14 February 2011]
Citi Merger a Mistake, 2008, Huffington Post. Available from: [14 February 2011].
Deregulation Redux, 2011, FCIC. Available from: {14 February 2011].
Derivatives, 2011, Financial Dictionary. Available from: [12 February 2011].
(Der Hovanesian, 2010)
Increased Promotion of Discounted mortgages.
The way that subprime lending practices, and some call predatory lending practices affect the housing market has yet to be realized on such a large scale, as these tactics have always been carefully controlled by lending institutions, due in large part to their historical long-range view. Subprime lending on the other hand is fundamentally not a long-term view practice; it is a short-term tactic that is now being dealt with on a massive scale as foreclosures mount and more and more families see foreclosure looming in their future and more and more banks take on this debt, with the added burden of holding on to mortgages that far exceed the new depleted value of homes as the market corrects naturally from the housing bubble. The marketing for such subprime lending was absolutely saturated as nearly every individual was admonished to buy a…
Resources
"Construction. Country Profile. United States," the Economist Intelligence Unit Limited (2007), p42-43, Retrieved from Database Business Search Premier December 4, 2010: http://search.ebscohost.com/login.aspx?direct=true&db=buh&an=25830278&loginpage=Login.asp&site=ehost-live
Der Hovanesian, M. (2006). Nightmare Mortgages. BusinessWeek, (4002), 79-80. Retrieved from Business Source Premier database December 10, 2010 http://0-search.ebscohost.com.library.pcc.edu/login.aspx?direct=true&db=buh&an=22374294&site=ehost-live
Gopal, Prashant (November 29, 2007) Northeast Home Prices Remain Strong. Business Week Online, 11/29/2007, p1, Retrieved from Database Business Search Premier December 4, 2010: http://search.ebscohost.com/login.aspx?direct=true&db=buh&an=27673398&loginpage=Login.asp&site=ehost-live
Killelea, P. (Dec, 1, 2010) Housing crash continues -- it's a terrible time to buy an expensive house: Why? Retrieved December 10, 2010 from http://patrick.net/housing/crash.html
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…
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
The National Housing Act indirectly promoted the idea of lenders offering much longer-term mortgages with the currently accepted concept of monthly payments with the dual interest and principal payment scale. Amortized real estate mortgages opened the door for an average person to purchase and own a single family home.
As a result of the National Housing Act, the United States government inadvertently committed itself along with private lenders to insure long-term mortgages that could be held for as long as twenty or more years at an interest rate that was affordable. Although the process at first was bogged down by paperwork and bureaucracy it eventually caught on.
Part of the reason the process took hold was because in addition to guaranteeing the loans, the National Housing Act through the formation of the Federal Housing Administration also investigated properties and neighborhoods which added an extra measure of security and guaranteed real-estate…
Works Cited continued
Housing: The Key to Economic Recovery. Ed. NAHB. Natioanal Association of Home Builders. 5 Nov. 2004 http://www.nahb.org/fileUpload_details.aspx?contentTypeID=7&contentID=46 .
Longman, Phillip. "The Mortgaged Generation: Why the Young Can't Afford a House." Washington Monthly, Vol. 18 April 1986.
Meyerson, Martin, Barbara Terrett, and William L.C. Wheaton. Housing, People and Cities. New York: McGraw-Hill, 1962.
Peterson, James R. "Housing Plays Politics to Keep Growth Strong." ABA Banking Journal Vol. 92 (2000).
It is, in this sense, a question of security and risk avoidance. In a financially insecure environment, an environment where state budgeting and financing for hospitals may be influenced by issues such as a change in the governing party, a change in the state priorities or anything like this, it is important to know that, while on one hand your sources of financing are variable, including here the possibility that sponsorship contacts may be less important in some years, your financial obligations remain stable and are not subject to modifications.
A second important advantage for the two types of conventional mortgage schemes I have mentioned is the fact that they seem to be more addressed to long-term activities than the adjustable rate conventional mortgage. Indeed, the adjustable rate advantages people who will prefer to change their asset after the first years and will benefit form the lower interest rate and…
Bibliography
1. Understanding Mortgage Options. Alpha Mortgage Services Inc. On the Internet at http://www.loanbright.com/alphatoledo/options.htm
2. Conventional Mortgage Program Overview. 2005. FreddieMac. On the Internet at http://www.freddiemac.com/multifamily/conventional.htm
Understanding Mortgage Options. Alpha Mortgage Services Inc. On the Internet at
.." The Federal Reserve continues to keep a watch on both "current and potential exposures..." And are in the process of a review of the collateral valuation methods of the banking industry." (Kohn, 2008)
Kohn states that disruptions in liquidity in some financial markets have resulted in banking organizations facing challenges and specifically at present "significant liquidity demands can emanate from both the asset and liability of the bank's balance sheet." (Kohn, 2008) Kohn relates that when liquidity is reduced in the markets specifically for "certain structured credit products the creation of challenges and concerns relating to valuating spreads into other sectors and "illiquidity in some credit markets may make it difficult for some market participants, including banking organizations, to hedge positions effectively." (Kohn, 2008) Kohn states that the banking industry in the U.S. is up against some very serious challenges however, the Federal Reserve in cooperation with banking agencies…
Bibliography
Berger, Allen N.; and Bouwman, Christa H.S. (2007) Bank Liquidity Creation. 15 Jan 2007
Brown, Ellen (2008) April Fools: The Fox to Guard the Banking Henhouse 30 Mar 2008. Online 'The Web of Debt' available online at http://www.webofdebt.com/articles/banking-henhouse.php
Buiter, Willem (2008) Lessons from Northern Rock: Banking and Shadow Banking. VOX. 4 March 2008. Online available at http://www.voxeu.org/index.php?q=node/960
Estrella, Arturo (2002) Securitization and the Efficacy of Monetary Policy. Economic Policy Review. Vol. 8 No.1 Federal Reserve Board Bank of New York. Online available at http://www.newyorkfed.org/research/epr/02v08n1/0205estr/0205estr.html#chart1
Predatory lenders look to stretch the debt-to-income ratio to a point where, it is not considered responsible lending (Smith 3). Another example of predatory practice is attaching a balloon payment to the loan. Balloon payments are typically seen in prime paperwork used when the borrower is upwardly mobile in their profession. Meaning simply, they will be making more money in the future and able to pay a large compounded payment years from origination. A balloon payment helps maximize the amount borrowed for a higher end property.
Another practice made by these lenders is to put the borrower under distress or fear of non-approval if they sop around but also to present different facts during the home-buying process and then show up at the Closing with different paperwork than discussed prior. Smith argues, "in a study of 255 very high-cost loans in Dayton, Ohio, 75% were found to have prepayment penalties…
Works Cited
Aaron, Ailis. "Study: Predatory Loan Terms Increase Risk of Subprime Mortgage Foreclosure by Up to Half." PR Newswire (Jan. 25, 2005).
ACORN Study Documents Problem of Predatory Lending and Financial Apartheid." U.S. Newswire (Nov. 2, 2000).
America's Homeownership Challenge. 23 Feb. 2005 http://www.whitehouse.gov/infocus/homeownership/homeownership-policy-book-ch2.html#challenge
Background on U.S. Homeownership. 23 Feb. 2005 http://www.whitehouse.gov/infocus/homeownership/homeownership-policy-book-background.html#goodfor
This program only covers a restricted amount of assistance at home for certain homebound seniors. Most state Medicaid programs target poor or low-income elders who need nursing home care, with little coverage for services in the home and community. Seniors who do not meet the requirements for long-term care under these programs must use a considerable portion of their resources to pay for long-term care, either out-of-pocket or through a private long-term-care-insurance policy (Stucki, 2004).
In addition to inadequate financing options, impaired seniors who want to live at home face stringent eligibility requirements when using government or insurance benefits for long-term care. This makes it hard for seniors to get help before they face an incapacitating and expensive disaster. "To receive services under the Medicaid Home and Community-Based Services (1915c) waiver program, impoverished elders must be so severely impaired that they would otherwise require nursing home care. Long-term-care-insurance policyholders typically…
References
Bowen Bishop, T. & Shan, H. (2008). Reverse Mortgages: A Closer Look at HECM Loans.
Retrieved from http://www.nber.org/programs/ag/rrc/08-
Q2%20Bishop,%20Shan%20FINAL.pdf
Reverse Mortgages Can Help with Long-Term Care Expenses, Study Says. (2004). Retrieved
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…
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
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…
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.
They could not foresee the housing market falling as it did, and the number of foreclosures it would create, and so, they aggressively continued to pursue the market when they should have been cutting back. The top executives left the company, but they were not fired, in fact, Killinger retired, comfortably it would seem. The customers of the bank, especially those with mortgages, are the ones who really will suffer in the long-term. The bank will rebound, but those with foreclosed homes never got the chance for a bailout, and so, they lost everything, while the executives and leaders of the bank are not charged with any wrongdoing. Luckily, the American taxpayers did not suffer, either, because JP Morgan Chase financed the takeover and the continuing operations of the bank.
In conclusion, WaMu's failure came about due to a number of reasons. They invested far too heavily in the sub-prime…
References
Adler, Joe, and Hopkins, Cheyenne. "FDIC's 'Big One': Long Prelude Gave Way to a Sudden End." American Banker, 29 Sept. 2008, Vol. 173, Issue 188.
Cocheo, Steve. "Kerry Killinger Builds His Dream Bank." ABA Banking Journal 93.8 (2001): 22.
Editors. "Washington Mutual, Inc." New York Times. 27 Sept. 2008. Business, 1.
Ivy, Bob and Shen, Linda. "Washington Mutual Hobbled by Increasing Defaults on Option ARMs." Bloomberg.com. 15 Sept. 2008. 11 Dec. 2008. http://www.bloomberg.com/apps/news?pid=20601087&sid=aNSwdt57nTBI&refer=home
Bailing out the American economy: Banks vs. mortgage-Holders
In 2008, the United States teetered on the brink of an economic crisis. If the United States were to suffer a financial meltdown, the global economy could spiral downward in a manner unprecedented since the Great Depression. The crisis had begun in the U.S. subprime mortgage market but had rapidly spread to other sectors of the economy. The remedy of the U.S. government was the creation of the TARP (Troubled Asset Relief Fund) ("Troubled Asset Relief," Investopedia, 2012). Almost every major banking institution, deemed in the infamous phrase 'too big to fail' was given some form of relief. However, homeowners who were behind on their mortgages were angry that they received relatively little support from the government even though they perceived themselves as far less culpable than the banks. Even the plan proposed by Jeffrey Fuhrer (Foote et al. 2009) on the…
Works Cited
Calmes, Jackie. "Audit finds TARP program effective." New York Times. 20 Dec 2009.
[17 Oct 2012].
http://www.nytimes.com/2009/12/10/business/economy/10audit.html?dbk&_r=0
Carter, Adrienne. "Big Banks Pay Back TARP Funds -- But Still Get Government Aid."
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…
Reference
Doviak, Eric & Kevin MacDonald. (2011). "Who defaults? Who goes into foreclosure?" 1-34.
Conclusion
If AIG would not have been helped by the Federal eserve, it is more
than obvious that the financial group would have declared bankruptcy.
Although the bailout reached an enormous sum, the action was justified.
Given the current market conditions, an eventual collapse of AIG would
contribute even more to the fragility of the financial market. Also, it
would have led to a reduction of public wealth, and it would have reduced
economic performance.
The opinion of U.S. taxpayers is that the AIG bailout was not
justified. For them, it did not seem fair that they should pay for the
mistakes made by financial corporations' CEOs and by the defective policies
and strategies practiced by financial groups.
There are two sides to this issue, one opposing the other. U.S.
citizens have strongly declared themselves against the bailout. Their
pressure determined the country's officials to reject financial saving
plans initially.…
Reference list:
1. Chronology: Financial Crisis Spreads from U.S. to World
Markets (2008). Deutsche Welle. Retrieved November 7, 2008
from http:www.dw-world.dedwarticle0,2144,3689713,00.html.
2. Subprime mortgage crisis (2008). Wikipedia, the free
encyclopedia. Retrieved November 7, 2008 from
http:en.wikipedia.orgwikiSubprimemortgagecrisis.
3. DiMartino, D. & Duca, J. V. (2007). The Rise and Fall of
institutional economics. When attachment proposal guidelines; I a 1,5-2-page proposal 3-page essay. I minimum 4 book resources. Maybe subject "effects oil cryisis 1973 institutions" "effects subprime mortgage crisis istitutions."
Institutional economics -- Essay proposal
The internationalized economic crisis is now the buzzword across the globe. The impacts it has generated are complex and dramatic, to include corporate bankruptcies or the loss of the population's savings. But aside from these generally accepted dimensions of the crisis, fact remains that the topics pegged to the crisis are more multifaceted and go beyond the impacts on the population and the economic agents. The impacts are as such also felt at the level of the institutions.
The proposal is then that of assessing the subprime mortgage crisis through different lenses -- those of the effects generated upon the institutions. Most of the effects are expected to be felt by the lending institutions -- both…
References:
Ashcraft, A.B., 2010, Understanding the securitization of subprime mortgage credit, DIANE Publishing
Kiff, J., Mills, P., 2007, Money for nothing and checks for free: recent developments in U.S. subprime mortgage markets, Issues 2007-2188, International Monetary Fund
Madura, J., 2008, Financial institutions and markets, 8th edition, Cengage Learning EMEA
Mimoun, K., 2010, Impact of financial innovations on the subprime mortgage crisis: causalities of the financial crisis, GRIN Verlag
Financial Fraud Fannie Mae
eview of Fraud Schemes within Fannie Mae 1998-2004
Scope
The agency found the fraud understatements of earnings and illegal gratuities that led to accounting violations and inability to meet Wall Street goals.
The investigation of Lee Frakas, executive of a major mortgage company which had dealings with Fannie Mae with hundreds of fake mortgages. The Securities Exchange Commission cited that Fannie Mae had to repay earnings and correct their books for the period 2001 through 2004. This major undertaking will cost the company over $11 billion by SEC estimates. In addition the Department of Justice has conducted a criminal investigation on the board members.
Summary
The top executive managing Fannie Mae were found guilty of illegally reporting accounting information that led to their receiving million dollar payments. Under Fraudulent Financial Statement Schemes this case is one of corruption and financial fraud. The specific areas include Illegal…
References
Associated Press. (2006). Fannie Mae manipulated accounting. Retrieved January 19, 2012 from http://www.msnbc.msn.com/id/12923225/ns/business-corporate_scandals/t/report-fannie-mae-manipulated-accounting/#
Schoenberg, T. (2011). Silence on taylor bean opened the way to $3 billion fraud. Retrieved January 19, 2012 from http://www.freerepublic.com/focus/f-news/926704/posts
Interest rates are set at the national level, and the state of the economy is also national. Additionally, trends in investment flows (particularly into real estate) also proved to be national. As a result, the level of market risk remained high even when the level of asset-specific risk was reduced through the securitization process.
It is not inevitable that this had to happen this way. Banks, however, overinvested in the mortgage-backed securities, believing them to be safe. This reflected a lack of understanding of the true risks associated with mortgage markets, and in general the risks associated with the underlying assets of many MBSs. There are two reasons for this. Securitization created a false sense of security, that diversification would lead to these products having low risk levels. AAA ratings from ratings agencies confirmed this view, despite it being false.
The second reason is that the securitization process was complex.…
Works Cited:
Fender, I. (2000). Corporate hedging: The impact of financial derivatives on the broad credit channel of monetary policy. BIS Working Papers No. 94. In possession of the author.
Gomez, E.; Vasquez, D. & Zea, C. (2005). Derivative markets' impact on Colombian monetary policy. Banco de la Republica. In possession of the author.
But Morgenson suggests even more troublingly, that the fundamental assumption of affordability behind the new program is flawed: "in devising what it considers an affordable mortgage payment, the program doesn't account for all of a borrower's debts -- the first mortgage, second lien, credit card debt and automobile payments. Instead, it calculates affordability using only the borrower's first mortgage payment, insurance and property taxes" (Morgenson 2009).
The program may even hurt those borrowers with second liens: "These banks -- the very same companies the Treasury is urging to modify loans that they service -- have zero interest in writing down second liens they hold because it would mean further damage to their balance sheets. Say a troubled borrower has a first mortgage owned by a pension fund in a securitization trust and a second lien held by the bank that services the loans. The servicer is happy to modify the…
Works Cited
Morgenson, Gretchen. "Why Treasury needs a Plan B. For mortgages"
The New York Times. December 5, 2009. December 6, 2009.
http://www.nytimes.com/2009/12/06/business/economy/06gret.html?_r=1&ref=business
Home Building Industry: An Economic Strategy
This paper will briefly explore how recent economic indicators such as record low interest rates for mortgages and housing starts should motivate house builders to strategize for continued economic growth. At this time while the housing bubble has not burst, it is important for such companies to focus on strategy in order to remain competitive when the bubble does burst.
This type of boom in originations has spawned tremendous economic growth with regards to employment rates, reurbanization, new home building, consumer spending and confidence and made hundreds of billions of dollars for the players involved. The housing boom kept this country afloat during the darkest moments after September 11, 2001 when other industries like travel, hospitality, entertainment, energy and telecommunications seemed uncertain. One can argue that such a relationship is cyclical; what comes around goes around in the manner of economic trends such as…
References
America's Homeownership Challenge. Retrieved June 30, 2005 from the World Wide Web: .
Hecht, B. Housing-Led Economic Development. Retrieved June 30, 2005 from the World Wide Web:
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…
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.
shadow banking system, its role in the subprime mortgage crisis, and failures of regulation within the shadow banking system. The term "shadow banking system" was coined by PIMCO's Paul McCulley in 2007 (Spanos, 2012) and refers to a banking system that includes financial intermediaries that are involved in creating credit across the global financial system, whose functions are not subject to regulatory oversight (Investopedia, 2012). The question has been debated as to whether shadow banking meets the definition of true banking. Given that the two systems perform similar functions, including credit intermediation and maturity transformation, the two should be considered parallel systems (Noeth and Sengupta, 2011).
The term shadow banking is used to describe any provision of credit taking place outside of the traditional deposit-funded lending system. This definition includes institutions that range from pawnbrokers and consumer finance companies to securities dealers as well as firms that issue corporate bonds.…
Reference List
Armstrong, R., 2010. Q+A -- Regulating the shadow banking system. Fox Business. [online] Available at: [Accessed 20 April 2012].
Beckworth, D., 2010. "Deposit insurance" for the shadow banking system. [online] Available at: [Accessed 20 April 2012].
Drum, K., 2012. The shadow banking system speaks: It's not time for austerity yet. MotherJones. [online] Available at: [Accessed 20 April 2012].
Hsu, J. And Moroz, M., 2009. Shadow banks and the financial crisis of 2007-2008. Research Affiliates LLC. [online] Available at: [Accessed 20 April 2012].
Many subprime mortgages were made with little documentation of income or ability to repay, or other elements that typically safeguard loans of all types and mortgages especially. There have even been cases of widespread fraud, where documents were falsified in order to approve loans. The reason many lenders were so eager to make these bad loans is that they weren't ultimately going to be responsible for them -- the loans were bundled into groups and sold as "mortgage backed securities," so instead of dealing with many individual loans worth an average of a few hundred thousand dollars, banks and other institutions were dealing with bundled groups of these bad loans worth millions of dollars apiece. Companies like AIG made money in the short-term by providing insurance policies for these mortgage backed securities, as well. Eventually, however, people with loans they couldn't really afford began to default, either because they simply…
A key element to Maslow's hierarchy of needs is that it is a hierarchy, namely that the baser needs must be satisfied before the higher needs can be met. A salesperson scrabbling to make a living might be willing, to satisfy his or her physiological needs, to sell anything to anyone, even encourage someone to go into dangerous debt with a mortgage he or she can ill-afford to buy an overpriced or unsuitable house. A person who lives in an unsafe community might enter into such an agreement, to earn enough money for his or her own immediate self-interest to move out of that community. The foolishness of buying a home on such a basis in the long-term is difficult to appreciate when short-term needs are not met on a physical level. Only when the salesperson's bestial instincts of food and shelter and safety are satisfied can he or she…
Works Cited
Gwynne, Robert. (1997) Maslow's Hierarchy of Needs. http://web.utk.edu/~gwynne/maslow.HTM
There is no acknowledgement that leaders may indeed be flexible according to the situation and followers that they are dealing with. Even though women, for example, may favor a more laissez-faire type of leadership style than men (Eagly, Johannesen-chmidt & Van Engen), this does not mean that they will do so in all circumstances, or indeed that all female leaders will have this tendency.
The Path-Goal Theory
The path-goal theory is one of the most flexible and popular models used in the changing business world today. It allows for an integration of various styles, personalities and situations. The components inherent in this theory is the particular path that employees are expected to follow in order to reach a certain desired goal. The position of the leader in this model is to provide followers with desirability in terms of goals and the removal of obstacles along the way towards obtaining the…
Sources
Eagly, A.H., Johannesen-Schmidt, M.C., & van Engen, M.L. (2003, July). Transformational, transactional, and laissez-faire leadership styles: A meta-analysis comparing women and men. Psychological Bulletin, 129(4), 569-591.
Hughes, Richard L., Ginnett, Robert C. & Curphy, Gordon J. (2002). Leadership: Enhancing the lessons of experience (4th ed). New York: McGraw Hill.
Kuriger, Craig C. (2006, July/August) Workplace change and worker fears: when new technology enters the workplace. Army Logistician
Parker, Dennis R. (2002, January/February). Create opportunities, not fear, through change. Leadership.
Even if no actual money changed hands, anything inherited and then sold may have taxable value (Prendergast, 1982; Yin, 2002).
Cases such as Crane v. Commissioner (1947) and Commissioner v. Tufts (1983) reaffirm the concept that there are many different kinds of taxable gains and a large number of individuals fail to realize that anything they acquire must be accounted for (Bittker, 1978; Pino-Anderson, 1982). By addressing the different between recourse and nonrecourse debt, those who find themselves in inheritance situations attempt to avoid taxation on the property they acquire because there was debt owed on that property at the time it was bequeathed to them (Cunningham, 1984; Isaac & O'Leary, 2012). The belief is that the object that was inherited is worth only as much as (or appreciably less) than the debt that was owed on it, so there should not be any taxation of that object (Isaac &…
References
Barris, J. (2008) an expert system for appraisal by the method of comparison. PhD Thesis, UPC, Barcelona
Baum, a., Nunnigton, N., & Mackmin, D. (2011) the Income Approach to Property Valuation (6th Edition). Estates Gazette, London
Bittker, Boris I. (1978). "Tax Shelters, Nonrecourse Debt, and the Crane Case." Tax Law Review 33: 277.
Commissioner v. Tufts, 461 U.S. 300 (1983)
ole of Law in Society
The law places a critical role in society, often serving to informally support the same rules and norms that it can formally enforce if someone violates them. The four primary functions of the law are: to ensure that the government, its officials, and private individuals are all accountable for their actions; to protect fundamental rights; to provide fairness; and to ensure justice (The World Justice Project, 2012). The rule of law provides the framework for society, so that all people come to the table with the same understanding of how transactions should work some knowledge of the remedies for wrongdoing, and knowledge of the consequences of inappropriate behavior. In fact, in many ways the presence of the law is prophylactic, preventing wrong behavior simply because that behavior has been made illegal.
One of the most critical uses of the law is to ensure basic human…
References
Citizens United v. Federal Election Commission, 558 U.S. 310 (2010).
The World Justice Project. (2012). The Rule of Law. Retrieved May 9, 2013 from http://worldjusticeproject.org/what-rule-law
Agility, responsiveness, and staying customer-centric while relying on the processes necessary for Long Beach Mortgage to grow profitability is the balance that needs to be maintained within this implementation. The BFOT suite of applications need to be positioned and launched to the employees, suppliers, and third party resellers of Long Beach Mortgage services as a series of tools to make them more agile, responsive, and effective in serving clients.
Conclusions
For Long Beach Mortgage, the future is now. The revolution that is sweeping the financial services industry to higher levels of customer responsiveness and involvement while dropping the costs per transaction needs to be capitalized on by the company by taking the following steps. First, the existing prospect- and customer-facing processes must be redesigned to get inefficiencies and costly time wasting steps out of the way. Second, the integration needs of these processes must next be considered and planned for,…
Economic Crisis Policies
US current economic crisis is considered to be started from real estate sector. The real sector started to decline in 2006 and it accelerated in 2007 and 2008. Housing prices have fallen from the peak from about 25% so far. The decline in prices left homeowners with no option and they were unable to refinance their mortgages and causes default of mortgages. This default of mortgages and loans swallowed the banks and financial markets such as falling of Lehman's brothers and other anks and blow to rest of economy happened as the whole economy was relying on banks and ultimately it slows down investment in the country and capital flows to other parts of the world like China and India. ank losses cause reduction of bank capital which in turn requires capital reduction thus saving bank from lending. It is estimated that every $100 loss and reduction…
Bibliography
ISR international socialist review. (2009, april). Retrieved from The U.S. economic crisis:causes and solutions: http://www.isreview.org/issues/64/feat-moseley.shtml
Journal of accountancy. (2009, october). Retrieved from The U.S. economic crisis: root causes and road to recovery: www.journalofaccountancy.com/Issues/2009/Oct/20091781
Eyes on wall street. (2011, april). Retrieved from Levin coburn investigates casues of financial crisis: http://www.eyesonwallstreet.com/2011/04/articles/financial-crisis/levincoburn-report-investigates-causes-of-the-financial-crisis/
Rude, C. (2009). World Economic Crisis and Fed Reserve Response to it. Studies in Political Economy.
The market size for AAA Software based on PC usage can be estimated by the total number of new PC sales and the level of antivirus usage on them. The total PC usage during the corresponding year is shown in the figure.
Source: http://www.etforecasts.com/products/ES_pcww1203.htm
C3: Competitive Analysis- Describe your company's current competition.
KEY DIFFEENTIATOS
egistered/Head Office
Czech epublic
United States
United States
Slovak epublic
United States
Number of Users
More than 150mn users
NA
NA
NA
NA
Product Variants
Home Users - Antivirus (Free, Pro and Internet Security), Products available for Mobile and Mac, Business Users -- Small or Home Office, Enterprise and Server needs
Home Users - AVG Antivirus Free, Antivirus, Internet Security, PC Tuneup, Secure Search, Business Users -- Antivirus, Internet Security, Email Server, File Server, Linux Server, escue CD, emote Administration, Mobile Users -- Antivirus Free/Pro
Home Users, Business Users -- Microsoft System Center Endpoint Protection (only…
References
Blokdijk, G. (2008). Change Management 100 Success Secrets: The Complete Guide to Process, Tools, Software and Training in Organizational Change Management. Lulu.com.
Cameron, E., & Green, M. (2012). Making Sense of Change Management: A Complete Guide to the Models Tools and Techniques of Organizational Change (3 ed.). Kogan Page Publishers.
Chambers, R. (Ed.). (2007). How to Succeed as a Leader (Illustrated ed.). Radcliffe Publishing.
Doe, J.P. (2011, 10-10). www.wgu.edu. Retrieved from Student Template in APA for Business Plan: http://www.wgu.edu .