The sub-prime mortgage crisis Essay Example | Topics and Well Written Essays - 2000 words

The sub-prime mortgage crisis - Essay Example The US sub-prime crisis is the historic turning point in the US economy and global culture. It is the result of the collapse of the speculative bubble in the housing market that began to burst in 2006 and has had rippling effects across many countries in the form of financial failures and global credit crunch. The current credit crisis which is the wave of the collapse of the US sub-prime mortgage market can be evaluated by understanding the history which is associated with it in terms of the effects it has had on the borrower as well as the financial statements of the banks, other financial institutions and the investors in the mortgage backed by securities around the world (Walters, 2008). The mortgage lending market is divided in two sectors prime and sub-prime. Prime borrowers are marked by high income, strong credit rating and sound savings. Sub-prime mortgages are loans which are extended to borrowers who have low credit score, no savings, blemished credit history and weak debt to income ratio. Sub-prime borrowers are considered riskier by the lending institutions and are generally assessed at higher interest rates than the prime borrowers. The sub-prime mortgage market emerged and flourished in the 1990’s. The new trend of extending loans or credit to borrowers with less than perfect profiles was adopted in 1990’s and continued until 2005, resulting in increased homeownership recording 64.1 % in 1993 and 68.9% in 2005(Carpenter,2008). The expansion of sub-prime market improved the access of credit and resulted in the boom in the real estate market. This also led to the expansion of credit to those borrowers whose credit was blemished. This period was also backed by strong overall housing market with increasing value of the home prices. Though this trend did not continue and in 2006 the housing market began to slow down, which resulted in rising late mortgage payments, foreclosures and defaults. This resulted in the collapse of the US sub-pr ime mortgage market. The crisis had widespread impact on the borrowers, investors, financial institutions, securitization, and mortgage broker which led to more involved government regulation. With the emergence of the sub-prime mortgage on the larger scale, there has evolved a new term in the lending world 'predatory lending'. It was seen that as sub-prime market increased so did predatory lending in some form or another. The Joint Report offered this definition: "In a predatory lending situation, the party that initiates the loan often provides misinformation, manipulates the borrower through aggressive sales tactics, and/or takes unfair advantage of the borrower's lack of information about the loan terms and their consequences. The results are loans with onerous terms and conditions that the borrower often cannot repay, leading to foreclosure or bankruptcy" (Carpenter, 2008). This brings in the ethics applied in the lending industry where sub-prime lending can be encouraged and predatory lending can be controlled using regulatory authorities. Owning a house is very noble desire very intrinsic to the happiness of the human beings. When the system goes against this virtue and creates more damage to the parties concerned it becomes a widespread crisis. Sound ethical practice applied to different segments of the mortgage industry will provide a channel which will help solve this ruthless money making machinery from exploiting the situation of nave customers or borrowers. The first time home buyers are elated and confused. It is an intimidating experience for the borrowers especially if they have been declined credit because of their income or credit history. It is a challenging task to negotiate the maze of loan processing which are overwhelming in terms of loan terms, fees, and financing documents. Most of the time borrowers place their trust in the broker or the lending authority which initiates the

Oral PE History Essay Example | Topics and Well Written Essays - 1250 words

Oral PE History - Essay Example Stereotypical ideas of True Womanhood constrained girls like Wendy into a tightly defined entity in which physical activity was considered too robust a pursuit for a delicate female and negative connotations of the New Woman who was then threatening this Victorian concept further functioned to reduce her available options. To understand how this could be so, Wendy Strain’s life experiences as a child growing up in 1960s suburban Detroit will be related to these social and cultural concepts. Wendy Strain is a 50 year old woman who spent her childhood in a suburb of Detroit in a middle class household with aspirations for greatness. Clinging to the ideals of the gentry of a century earlier, her parents strongly adhered to the concepts of the True Woman. â€Å"The attributes of True Womanhood, by which a woman judged herself and was judged by her husband, her neighbors and society, could be divided into four cardinal virtues – piety, purity, submissiveness and domesticity. Put them all together and they spelled mother, daughter, sister, wife – woman. Without them, no matter whether there was fame, achievement or wealth, all was ashes. With them, she was promised happiness and power† (Welter, 1966: 152). According to Poovey (1988), it was by â€Å"linking morality to a figure (rhetorically) immune to the self-interest and competition integral to economic success, [the cult] preserved virtue without inhibiting productivity† thus creating a perfec t world in which men were free to pursue every material pursuit they wished while women were constrained to remain at home and protect the moral and ethical values of the family unit. A woman could not participate in competitive sport under this ideology not only because it was against the nature of the True Woman to participate in any activity that could not be conducted inside the home, but also because it would have introduced this element of competition that was restricted to the male world. Strain indicates