Predatory lending

The asymmetric information in the financial market The imperfect nature of the financial market can be a cause of the crisis. In many economic models markets are assumed to be efficient, which is the demand and supply will match each other under the guidance of the price. Although there is nothing such as perfect market, the assumption of near perfect efficient market does stand for itself in some cases. For example, the food grain market and some raw material markets. However, the financial…

The housing crisis affects millions of Americans because of many peoples income and not being able to afford it . Many government programs are established to help many people . In different places housing prices are different . The better the environment the higher the prices . The not as good quality the environment the lower the cost . There have been many programs that have been established to help with poverty . In inner cities the price of housing is much lower because of the…

estate scandal that came as a result led to the former Prime Minister Kostas Karamanlis to be ousted from power in October 2009. When a new government was formed, there was little money left in the government’s coffers so they had to come clean about the true state of things. The revelations coupled with the new higher interest rates which the country was forced to pay caused panic among investors. Mr Lewis uncanny ability to weave stories into a sharp-edged narrative gives people a full…

Based on the case article entitled: “Mortgage Crisis Analysis – What Caused the Mortgage Crisis?” by Aubrey Clark, the mortgage crisis was instigated by consumer demand, oblivious politicians, and the competition against banks, small brokers and lenders. There are three types of mortgages which are the Government (FHA), Conforming (Fannie Mae and Freddie Mac) and the private subprime lenders that are usually funded by larger banks. These lenders have established a practice of buying the loan…

6. The turnaround post the bankruptcy and suggestions General motors had faced the issue in 2008 because of the downturn in its sale and went on for bankruptcy. Company had made turnaround since then and within five years of huge equity infusion by the US government, company had come out of crisis. In 2009, company was on the verge of being liquidated and was set to be closed. But it made a turnaround by restructuring itself. At that time, there also a fear that no one would like to buy a car…

External Factors and Internal Factors The 2008 great recession had caused several economic downturns to many financial institutions, which forced to go out of business or filed a bankruptcy protection. This financial crisis had caught many economists off-guarded the severity of financial damages that the crisis created. There were numerous factors that caused the financial collapse included the over-heat real estate market, the mortgage-back security products, the loose monetary policy, the…

How Home Insurance Fraud Affects You Insurance fraud is a real issue when it comes to home insurance in Chandler, AZ. Fraudulent home insurance claims can be phony claims and fake property damage, to name a few. If you are considering exaggerating your insurance claim, don’t. If you know someone who you suspect committed insurance fraud, then you should report them because it affects you as well. Fraud Drives Up Premiums Fraudulent insurance claims are often paid by insurance companies. If you…

Reader response: A long way to achieve wealth equality In the article “How to Fix Wealth Inequality” (Hecht, 2014), the main thesis presented by author focuses on the causes of wealth inequality in the USA and the attempts to solve the problems. The gap of household wealth between the colored people and the white are large nowadays, the methods of changing the landscape are still in process. The author analyzed the current situation and raised people’s awareness towards wealth inequality. This…

Since when did a house become a tool for profit? Is it wrong for people who could not otherwise afford it to own their own home? The Great Recession was caused, in part, by a “house of cards” that was built by subprime home loans. But who was at fault and are there lessons for the future? This paper will attempt to address these questions in the context of what I have learned in the text Ethical Theory and Business (Arnold, Beauchamp, & Bowie, 2013). “Capitalism is a system of social…

The secondary mortgage market is a huge piece of Americas real estate market. The secondary mortgage market allows bank to sell mortgages to certain investors and government lending agencies. This is where both Fannie Mae and Freddie Mac come into play. Although the names of both of these agencies sound similar there is one key difference between the two agencies. Let's look at what each of these agencies has to do with the mortgage and housing industry. Fannie Mae Fannie Mae also known as…