Predatory lending

individual outsiders working in the world of finance in Wall Street, New York who predicts that the credits and housing bubble will collapse soon before anyone else does. At that time in the US, banks were lending out mortgages to people who could not afford housing and dealing with high risky lending rates meanwhile, the citizens were not paying back their loans from banks. So these few individuals thought maybe if they beat a large sum of money by betting on the market collapsing they would…

Most people nowadays assume that their hard earned money is pretty safe right? You would think that with all the guarantees and safety protocols banks have in place along with all the laws and rules, banks couldn’t get away with taking money from people. Well safe to say that your money is reasonably safe in this day in age, now that there are actually money rules and regulations put in place to keep your money where you desire it to be. But not so long ago, there were some pretty bad people…

From 2008 through 2012, 481 FDIC insured banks were either liquidated or merged with healthier institutions. Credit Unions saw 136 involuntary liquidations or assisted mergers at the hands of the National Credit Union Share Insurance Fund. In 2009, Credit Unions saw their delinquency for mortgage loans peak at 1.61 percent compared to 8.86 percent at the banks. Many of the largest corporate credit unions in the United States invested in troubled mortgage-backed securities which resulted in…

20078 financial crises except for recent sharp increases in the prices of the assets that have affected the economic activity of the country. To curb this and its effects; banks have been encouraged to control their interest rates together with their lending so that it doesn’t blow out of proportion like the 2008…

Countrywide wrote so many subprime loans, due to their nature as an apathetic culture (Ferrell, Fraedrich, & Ferrell, 2013). They demonstrated very little interest to their employees and customers. In fact, they did not care how their employees deceived minorities and low-income borrowers into getting subprime loans, even if they were a high risk of not repaying the loans. Countrywide was willing to substitute good ethical conduct for unethical conduct to maximize their profits, regardless of…

Bankruptcy is when you have no money or value at all. “In the United States, early federal bankruptcy laws were temporary responses to bad economic conditions. The first official bankruptcy law was in 1800 in response to land speculation, but it was repealed in 1803. Also in 1841, a second bankruptcy law was passed, but this law was quickly repealed in 1843.” Bankruptcy is important because when a debt is removed as part of a bankruptcy process, we would then say that the debt is dismissed. By…

THE PROBLEM Bear Stearns sponsored two hedge funds through its subsidiary, Bear Stearns Asset Management. The main fund, the High-Grade Structured Credit Strategies Fund, was made up of complex derivatives backed by home mortgages. During most of its life it was highly profitable but as the housing market began to stutter in late 2006 the returns suffered. This fund was leveraged at 35 times its invested funds. As the market worsened the returns of the two funds sank. In urging investors to stay…

were becoming increasingly more lenient and flexible; from 2004- 2006, the subprime mortgage lending rate was at an all-time high of approximately 23%. Previously, the lending of subprime mortgages ran at approximately 8%, as demonstrated by Figure A below. Obviously, with more people with the ability to buy homes, the demand for homes went up and the housing market got stronger and stronger as the lending standards got less and less stringent.…

At the beginning of the year, many Fed officials, including Chairman Ben Bernanke, thought one of the biggest risks was that the economy might grow stronger than expected. At the time, the Fed's key interest rate was at 5.25%, and the central bank was leaning toward raising it further, rather than easing monetary policy. "My recommendation also is to take no action and to maintain a bias toward further tightening," Bernanke said at the first meeting of the year, noting that inflation risk had…

Archway & Mother’s Cookie Company was a gourmet cookie company that was one of the top salaries and makers in the United States. It started in 1936 with the Harold and Ruth Swason staring their company in their garage in Battle Creek MI. In 1980 there was new ownership, Thomas Olin and Eugene McKay, Jr. Both. During this time, began the cookie war, could be viewed as the start to the downfall of Archway & Mother’s Cookies Company, which closed in 2009. “Archway Cookies, Inc. is one of the top…