...argue that the players most responsible for this crisis are the homeowners. Taking out money for their mortgage that they knew they would not be able to pay off, the homeowners acted unethically, taking a “rights” approach while they should have taken a “common good” approach. While many may argue that it was in fact the fault of the banks and brokers and lenders who convinced homeowners to make such unethical decisions, I believe in the end it is the end choice that matters rather than the process that brings you to that choice. The homeowners, in taking out a loan they knew they couldn’t pay, were taking a rights approach. They went by the notion that it was their right to freely choose what they do with their lives. However, this choice represents an ethical flaw it that it damages the economy and consequently many people. By taking such money out, the people were not keeping their end of the bargain and were acting selfishly purely to benefit their own needs of acquired land. This however resulted in a large surge of such ethical decisions and all came crashing down. This is due to the fact that everyone deemed it their right to act in a manner most fitting to their lives. However, while the rights approach can be applicable to causing ethical decisions in many situations, in the subprime-mortgage crisis it caused in the downfall of our nation’s economy. I argue that if the homeowners had taken the common good approach, they would have been able to maintain such a crisis...
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...& Barry, (2011, p 216-217). An effective group and their members do the following things: 1. Test assumptions and inferences: Unchecked assumptions and inferences can lead to unfounded conclusions. 2. Share as much relevant information as possible: Information is key. 3. Focus on interest, not positions. 4. Explain the reasons behind one’s statements, questions and answers. 5. Be specific- use examples 6. Agree on the meaning of important words 7. Disagree openly with any member of the group 8. Make statements, and then invite questions and comments. 9. Jointly design ways to test disagreements and solutions. 10. Discuss undiscussable issues 11. Keep the discussion focused 12. Do not take cheap shots or otherwise distract the group 13. Expect to have all members participate in all phases of the process. 14. Exchange relevant information with non group members. 15. Make decisions by consensus. 16. Conduct a self-critique The actions we will take for team...
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...ECONOMICS 7/25/2012 Many of the decisions we make as consumers are directly related to the current state of the economy. Moreover, as consumers are faced with life changing purchases, they will weigh the marginal costs and benefits associated with their purchase. This is most apparent when there is a decision to purchase a new home. Throughout this paper I will explore the economic principles that directly relate to this type of purchase, as well as identify the contributing factors that help shape the strength of our economy. The decision to purchase a new home can be a daunting and challenging choice. As current homeowners will testify, various factors will contribute to this life-changing decision. One of these factors includes trade-offs, which they will face before and after their purchase. This trade-off is one of the fundamental principles of economics; stating that we must give up something to receive something else. For a perspective homeowner this trade-off can be a reduction in the amount of available purchasing power. Once the purchase has been completed, the homeowner would be required to spend any extra money on their mortgage payment. Or for a couple who travels, it could be the loss of multiple vacations to popular destinations around the world or for someone like me who enjoys getting massages on a regular basic it would become no more. Moreover, this first principle defines that every decision comes at a cost. By deciding to purchase...
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...Home Stabilization Solution This overview will offer an outline of a practical solution for addressing all of the current distressed and negative equity homes throughout the United States. The goal of the program is to have homeowners take on a realistic proportion of their negative equity position by restructuring to affordable payments, while building a savings program that will help accelerate their principal reduction. In addition, this program will result in a market-supported level of homeowner debt in the shortest possible time with the least amount of loss to the mortgage note holder and least amount of negative credit impact to the homeowner. The even greater societal good of this program is that, if a commitment to place the vast majority of all distress homes into this program, our nations economic outlook will have a stronger foundation. Quick stats • Over 10,000,000 or 20% of all homes with mortgages in the United States have a value that is less than what is owed on the property. o Total exposure to potential losses for banks could exceed $1.5 trillion. • The average home that is overleveraged has a mortgage of $220,000 but has a value of $170,000. • The average home that has a 1st and a 2nd mortgage with a value of $225,000 but has mortgage obligations totaling $309,000. • There are over 5,500,000 homes that are in some stage of delinquency or foreclosure. Below is an example...
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...the parents need to make a decision on whether to rent or buy a larger home for the growing family. If I were personally presented with this decision right now, I would make the choice to rent rather than buy. As I considered this decision I took into consideration many the economic principles that I have learned in this course and how they affect my ability to buy a house. The first principle I thought about was how much I could afford to pay for a house. This was the major factor affecting my decision. My income right now is very limited so at this time I do not have the means to save toward a down payment. Without a guarantee that my financial situation will increase, it is not wise for me to make a commitment like this at this time. I need to finish my education and find a more secure, better paying job first. I also considered other economic related factors when I made this decision. I thought about the type of neighborhood that I would want to live in, the additional financial responsibilities of owning a home, the total monthly and yearly cost of homeownership, the risks that come with owning rather than renting, my lifestyle and spending habits and my current savings account (O'Brien, 2005). A growing family should decide on what type of neighborhood they want to live in. I would want my family grow up in a good neighborhood with good schools. In most cases this is what most people want but often they make the decision in a hurry and be forced...
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...to a homeowner that renters do not have. Many tax breaks are only available to homeowners for many reasons including deductions for mortgage interest, First-Time Home Buyers’ Tax Credit and deducting expenses by having a home-based business. The amount of money saved considerably outweighs the money spent on renting a house or apartment. Not only does one save money , but the money is equally invested. Money saved by owning a home grows in many ways. Additional benefits not relating to money, such as a feeling of worth or inclusion in community decisions are positive reasons for owning a home. Spending money on rent when one can afford to buy is not the best financial decision. Though renting property relinquishes the renter of most responsibilities the benefits are few. When a person saves money to buy a house, that person takes pride in the amount of hard work accomplished to attain the goal of purchasing the house. Owning property “instantly” makes the owner a part of the neighborhood and community, along with its social advantages” (Hudson Valley Business Journal, 2/25/2008 Supplement, Vol. 19, p4-4, p. 1). One may choose to make valuable decisions when becoming part of a new neighborhood that help mold the area into a safer community. Such decisions effect the development of the neighborhood and potential businesses and events. Community associations organize neighborhood watch, family dances, sleigh rides or family dinners helping to unite the community, make it safer...
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...for and put it down on paper. Then you need to weigh the pros and cons of them. Just to make sure you understand what it is you have gain and give up for each type of dwelling and how you want to own it. You also want to look at the financial part of it as well. Make sure you can afford what you are looking for or look for what you can afford. In the end you will be able to logically decide on what to do with your dilemma. So there are many factors however there are also the benefits and what you want to be responsible for and not be responsible for. So the choice is up to you and only you can make it happen. I am just giving you the information to make an educated decision. I rented for years before my husband and I decided to buy a home. It came years after and when our daughters were elementary age. I enjoy being a homeowner however I also enjoyed renting cause of not having to worry about doing all the stuff the apartment complex had to do because I paid rent. This is just a scratch on the surface of the renting vs. buying dilemma. I sequenced my paragraph with the most catching ideas and information to keep the reader interested. I then wanted to give some facts and then wanted to give some personal insight on the essay. To keep the reader interested in what I am writing about. I just want to have them learn what I know and use it to their knowledge. I want to make sure I put all of my...
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...Final Project: New House Decision ECO/212 February 20, 2010 The arrival of a new baby is a major lifestyle change. The decision to buy a house takes into account pros and cons of making a major purchase. A studio apartment is a difficult living arrangement with a new baby, because it is small and without a separate space for a baby. The studio apartment is not in proximity to schools or services, which are needed for childcare. A house offers space for baby, a yard, schools, and services. The pros of home ownership offer many benefits not available with a rental property. Trade-offs The studio apartment although close to downtown night life, is not close to schools, churches, or shopping centers. This location worked well for the past few years, because children were not part of the equation. Some trade-offs are required before making a housing purchase. Proximity to night life is enjoyable; however, caring for a new baby will limit a carefree lifestyle. Purchasing a home will require a down-payment and closing costs. In addition to a monthly mortgage payment, utilities, homeowner dues, repairs, maintenance, lawn care, insurance, and taxes are costs of ownership. When renting the renter does not have homeowner dues, lawn car, property taxes, and most repairs and maintenance costs. Homeowners unlike renters can make home modifications, without ramifications. Equity in a home increases the homeowner’s personal wealth. Homeownership also signifies stability. A renter...
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...Case 1.1. Made in the U.S.A. – Dumped in Brazil, Africa, and Iraq… 2.) Explain what dumping is, giving some examples. Does dumping raise any moral issues? What are they? What would an ethical relativist say about dumping? At times a company is unable to sell their products because it may cause harm to people or the environment. When a product has been determined by the government to be unsafe and illegal to sell, the manufacturer needs to find a way to dispose of it. This is when dumping occurs. Dumping is the exporting of goods at prices lower than the home market prices. It occurs when manufacturers export a product to another country at a price either below the price charged in its home market or below its cost of production. These overseas countries generally do not have qualified health safety standards. Since dumping involves substantial export volumes of a product, it financially affects the manufacturers of the importing country. This is the case with the Tris-impregnated pajamas. The U.S. Consumer Product Safety Commission found that the pajamas contained a flame-retardant chemical Tris, which had been found to cause kidney cancer in children. Because of its toxicity, the sleepwear couldn’t even be thrown away, let alone sold (Barry, Shaw 29). But the pajamas were exported to other countries at 10 to 30 percent of the normal wholesale price. This however is not the only case of dumping. There were also 450,000 baby pacifiers that were exported for sale overseas...
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...Stith Prof. Derrick Barbee As children we always dream of one day owning our own home. But with the economy being the way it is, it sometimes makes us feel as though that dream will never come true. But deep in our heart the greatest glory as an adult is to be a homeowner a goal that we believe we can reach if we do what is necessary to achieve that goal of owning our home. In today’s society, the economy is drowning with bottomless pit of debts that homeowners can’t seem to see the light of day. That dream of ownership seems to be farther away than it did just three years ago. We tend to believe that if lady luck would have it along with hard work. We would at least be able to keep a head above water just long enough to achieve that goal without feel as if we have failed before we have even gotten started. We something feel as if we had higher payments on our mortgage that might just do the trick and save us thousands of our hard earned dollars from interest. To begin, this task we must keep in mind that this can cause us to feel overwhelming at first. In order become a homeowner a person must understand what their credit is to obtain this goal. According to, ("How do i," 2010 ) “The first step to buying a home is understanding your options. You can start this process with a preapproval decision. During the preapproval decision process, your Home Mortgage Consultant will run your credit report and analyze your income and assets to give you a clear picture of your home...
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...intended to help homeowners manage the unexpected cost for home repairs. The home warranty provider pays for the service and the costs in replacing the equipment or appliance. There are other names for home warranty; appliance warranty, home service contracts, and usually these repairs don’t fall under the homeowner’s insurance policy. Home service contracts cover appliances and system inside of the home, and cover the breakdowns. Home warranty is not a replacement for homeowner’s or builder insurance. Homeowners insurance protects your home and its contents, whereas home warranty covers appliances, especially older ones or those with more wear and tear. The chances of needing extensive home repairs without the...
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...system which involved a relationship with brokers, lenders, and potential homeowners, many seemingly unethical practices were forged in the name of American families and individuals attaining part of the “American Dream” of owning a home. While this may neither have been the direct fault of neither party, each engaged in less than moral actions that played a part in the subprime mortgage crisis. Thus, the problem to be investigated is whether or not these ethical violations ultimately led to the fall of the subprime market by causing a catastrophic domino effect on all stakeholders involved. The article Subprime Loans- The Under-the-Radar Loans That Felled a Market by Marianne M. Jennings will be used to investigate this problem. Ethics of brokers and the isolation of individual ethical choices According to Jennings (2010), the subprime market offered a vast source of wealth to lenders because of the hassle-free and lenient criteria for qualifications for potential home owners (p. 434). As a result, lenders attracted mortgage brokers that engaged in questionable ethical practices such as using the same applicant for more than one application, processing numerous applications out of greed, and even committing fraud (Jennings, 2010, pp. 434-435). The first unethical decision brokers made was to offer loans to applicants they knew would not qualify for loans under normal circumstances. Potential homeowners expected brokers to determine whether or not they qualified for the loans...
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...stability is one of the main financial reasons prospective buyers jump into the market. At least that was a major factor prior to the financial crisis of 2008, when the U.S. housing market suffered widespread losses. I being a homeowner along with prospective homeowners may now look more closely at the costs and benefits of such a large transaction. The effects of the housing crisis may have prompted a more cautious approach by buyers who are more realistic about the level of credit and stability they can build in their homes, the drive to be a homeowner remains strong. It's mostly about freedom: The ability to paint the walls whatever color you want, or know that a landlord is not going to raise your rent or ask you to leave. Here are a few points to consider when deciding whether homeownership or renting makes better sense for you. Home Ownership: * Ownership, Stability and the future of owning a home, along with financial gains; * Family, Children and belonging to a community; * Control over decisions you make with the property; * Job concerns; stability, commute Renting: * Cheaper than owning; * The freedom of movement if opportunities arise; * Utilities are included at times; * Bad credit; While a home is a good investment, let's face it, you have to live somewhere. Many financial experts caution against purchasing a home simply as an investment. Historically, real estate market increases have been slow and steady, not the meteoric spikes...
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...The case at hand pertains to business ethics. Business ethics are the moral principles that steer businesses to act ethically while making sound decisions for the good of the business and making the right choices. This is the main reason why businesses have policies and rules that are followed in their day-to-day operations of the business and if there is a violation depending on the circumstances the individual(s) could be terminated as individuals or fined as a business. Furthermore, if you are working for a company and you are asked to do something that may be unethical weigh your options and make a sound decision accordingly to the benefit of the company and yourself morally. Parties The plaintiffs and defendants in this case are as follows: General Investment Corp. is a corporation based out of New Jersey (Plaintiff-Respondent), Anthony V. Angelini and Delores H. Angelini homeowners (Defendant-Appellants), Lustro Aluminum Products Inc. contracted to put siding on home (Defendant). The Supreme Court decided on June 7, 1971. Mr. Milton argued the case for the appellants, and Mr. Davis S. Baime argued the case for the respondent from Baime and Baime attorneys. Francis J. delivered the opinion of the court. Facts Anthony and Delores Angelini are homeowners that needed work done on their home. Lustro Aluminum Products is a contracting company that does home repair. The Angelini’s entered into a contract with Lustro for repair work on their home on December 10, 1966.” Lustro...
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...property holds only a lien, and not a title to the property until such time the mortgage is fully paid. The difference between these two theories are that in a Lien Theory the buyer retains the deed to the property, and in the title theory, the bank or finance company is the one issues the loan will hold the title until the loan is satisfied. While this difference is little at the time of the closing, it can make a big difference if there is ever a possibility of foreclosure. The State of Massachusetts used the Title Theory, and the foreclosure process has many steps. Under this process, the Lender must file a complaint under the service member’s civil relief act in a land court or superior court, stating the intent of the foreclosure. Homeowners must be served with a copy of the complaint and has 20 days to file an answer. The following steps are included in this process: 1) Default and Right to Cure Notice – Homeowner falls behind on mortgage payments, it may receive collection calls or letters from the lender. The lender sends Right to Cure Notice giving homeowners 150 days to bring mortgage payments current, and during this time the lender cannot accrue excessive fees and penalties. 2) Acceleration Notice – If the mortgage is not paid in full, the lender will send an acceleration notice, which means that the entire loan is due. This notice must be sent by registered or certified mail at least 21 days before the foreclosure sale....
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