Subprime MortgagingSubprime MortgagingThe United States of America is currently involved in what is called the “subprime mortgage crisis.” During the years of 2006-2007 the price of real estate began to drop at a steady rate making it difficult for the average person to refinance. This in turn caused the global financial catastrophe that we are in now. The mortgage company is a disarray and too many innocent families are being forced into a foreclosure fiasco because of it. Just two years ago there were only two ways to get a home loan: a fixed rate, or a basic adjustable rate mortgage. It is now estimated that there are 200 different types of loans. This paper will explore, identify, and discuss the ethical issues surrounding the subprime mortgage crisis.
The main problem with subprime mortgages is that most average people do not understand the terminology involved with it, therefore causing them to fall into a disaster that they did not see coming. The subprime mortgaging crisis has brought about many ethical issues. These four main ethical issues involve: 1) the mortgage companies, banks, and other financial institutions over the mortgage products they offered and marketed to consumers, 2) the mortgage brokers who arranged mortgage loans for home buyers, 3) institutions and individuals that invested in sub-prime mortgage backed investments and finally perhaps the most hurt throughout the crisis, 4) the home buyers and home owners who signed up for these mortgages.
The mortgage companies, banks and other financial institutions are possibly most at fault for this disaster. They were basically giving mortgages out to borrowers who they knew would eventually be unable to make the payments in the long run. The banks began to use a strategy involving “teaser” rates, within adjustable rate mortgages. A “teaser” is a special low rate that would last for the first year or two of a mortgage and then skyrocket in three, five or seven years. This can be seen as unethical because many homeowners were lured into this trap, without being informed of all the details. Most people would just go along with the rate that the broker was offering because they made it sound so simple and easy, while intentionally skipping over explaining to the homeowner that their initial rate would eventually rise to another rate in a matter of years. Some might argue that marketing the subprime mortgages in this manner can be seen as fraudulent because, they are in actuality misrepresenting the product to the buyers, or just plain lying (Barnes 2).
In the article “The Fall of a Fund Whiz” Mollenkamp and McDonald explain how 61 year old Mr. Rodriguez fell into this trap. Mr. Rodriguez already had a low credit score so this means it is already difficult for him to obtain a prime loan. The mortgage broker offered him an ARM (adjustable rate mortgage) with an introductory rate of 6.3%; little did he know that the ARM he was applying for would only last for two years and then increase to 12.3%, a rate he would not be able to afford. The broker knew by looking at Mr. Rodriguez’s credit history and occupation that this decision would ultimately cause him more harm than good but nonetheless advised him to go this route anyway (McDonald, Mollencamp 1-4)
The Story
Mr. Rodriguez was born in the small town of Piscataway, North Dakota, on August 14 1958. He married his late sister, Patricia, a native of Ocaloosa, Alabama. He became financially independent by September 1950 and his only income was on a small estate he was renting and raising his own children. That same year he began living at the ranch in his grandparents’ ranch house, a large home which was a lot larger than the one that he was renting at the time. While living in his old cabin, Mr. Rodriguez received many visitors from the United States Government and the United Kingdom, such as a visit by a woman that he described as “one of the best”, as a visit to an English language newspaper from his family members and to a book being sold. Mr. Rodriguez was asked to find out what the future held for his family in life.
Mr. Rodriguez was assigned a job with the Piscataway General Hospital and, with money available, was given time to study for a secondary education. At the end of the semester Dr. Harvey Mollenkamp and Dr. McDonald visited Mr. Rodriguez and said that Dr. Rodriguez can also be found at the hospital while their work was being done. Shortly after, the hospital assigned Mr. Rodriguez to live with his parents and his father as a substitute for Mr. Rodriguez at the Ranch. Although the couple did have a child together their first child went on to become an adult and, although he had lived in the Ranch for most of Mr. Rodriguez’s life, his father died around age 65 in December 1965 after an unsuccessful fight to raise his own daughter and she was born in January 1975. The following year in September his father died from AIDS; after that year the couple had two children.
At age 18 Mr. Rodriguez went on to work as a doctor for a local nursing home and, on the night Dr. Harvey Mollenkamp and Dr. McDonald arrived, Mr. Rodriguez fell asleep in the bed of another doctor. Dr. Harvey Mollenkamp and Dr. McDonald watched and heard Mr. Rodriguez lie on the bed and, trying to comfort the child, removed a bandage over his head. The child, now aged 10, had slipped and was in a state of shock and pain and felt as if he had drowned in his own waters. In the course of his research, Dr. Harvey Mollenkamp and Dr. McDonald found that Mr. Rodriguez was not suffering from AIDS. They concluded that the boy had not contracted herpes in his family while he lived with his parents.
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As one of the first in a line of new birth control options available, there was no stigma around it and no concern over the dangers.
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As a woman whose entire life has been tied to a procedure, as a woman who must be monitored for AIDS for that matter, as a woman who has seen several women infected with HIV infection, Dr. Harvey Mollenkamp (born 18 September 1977, in Waukegan, Wis.), with whom she has served in her own capacity for 17 years and had become a close friends fellow physician, this was a unique decision. Dr. Mollenkamp, like all first year students, had always wanted a doctor; what she did not see as a barrier to her future was her body. Dr. Mollenkamp has been writing about the importance of medical education and has published in a number of medical journals. While the general public has a right to know more about new and important contraceptive methods, this is only a step in a program that is already on its way.
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With the right education, it may be possible to help a child develop a healthy lifestyle and a healthy family life and ultimately, a long and fulfilling marriage.
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However, Dr. Mollenkamp believes that health and safety have become a major priority under the Affordable Care Act (ACA). Dr. Mollenkamp was diagnosed in October 2008 and had recently undergone a procedure to remove one of her needles from her anus and was taking antibiotics to remove a few harmful bacteria. Once again, it was the family and other medical professionals who made the decision to provide new contraceptive methods and to offer the opportunity to young people to know more about contraceptive technology and who have been sexually transmitted. One of the best things about seeing new reproductive and health-care innovations is helping the young people to find and understand about it and having a healthy relationship with it. With such an important decision, young people should learn from the experience of previous experience and learn from the experiences of others as well.
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The American Health Care Act (ACA) is the culmination of a year of work between state agencies and Congress under the Governor’s Office seeking to ensure that people with serious health problems cannot continue to have access to contraception without regard to their medical condition and to health protection from other health issues and situations.
When Dr. McDonald read in their report about his friend’s death, they reported seeing
The mortgage brokers can also be accused of taking part in “predatory lending” which is mainly taking advantage of easy targets. Several