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Mortgages in the Brink of Meltdown

Better Essays
Ethics Essay:
“The Subprime Mortgage Market Meltdown”

“What were the responsibilities of the mortgage broker to borrowers? To lenders?
To investors? How well did they fulfill their responsibilities? Why?”

The responsibilities of the mortgage brokers to the borrowers, lenders, and investors were to promote the subprime mortgages to these groups of people in order for them to take out a loan. Although they did fulfill their responsibilities of promoting and having people sign up for it, they mishandled on how people should be granted for a mortgage loan. These brokers were to desperate about earning huge amount of money due to the expanding market that they ignored the proper precaution that they should have taken when they
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It’s a risk that these investors took where in the end, they were financially hurt by it due to the part of the subprime lenders acting unethically. Not only the subprime lenders, but also the investors because they started to loose their standards once the subprime mortgages were booming and becoming more profitable. The investors were blinded by the profit and not paying attention to the qualities of business and the loans. Once the investors started to loose their standards, that’s when the subprime mortgages were being overlooked in which they were hurt by it.

“Should the borrowers (homeowners) share in the blame? If so, how?”

Yes, the borrowers (homeowners) should share the blame because they were getting loans where they didn’t have the sufficient income to pay it back. This is the reason why people shouldn’t lie on their income information when investing into getting a mortgage or financing a car because it can hurt the lender and the borrower. They might be able to pay payments at first, but once the interest rate starts to increase, it can be difficult to make the payments because it might be higher that they intended to me. That’s when you start to have people file for foreclosure and end up filing for bankruptcy. The lender will also end up being hurt from it because they won’t anyone to pay off the debt and can ruin them financially. Especially when they have
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