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Citigroup and Subprime Lending

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Unit VII Case Study Columbia Southern University

Citigroup and Subprime Lending 1. Are there moral concerns associated with subprime lending? Are those moral concerns based on utilitarianism, rights, or justice considerations? Sub-prime lending is a process of giving loans to those who otherwise would not qualify for conditional loan because of poor credit history. There is high risk involved in such loans and therefore, it is offered at high interest rates. It is risky both for the lender and the borrower. There's certainly a private responsibility with regards to a person taking on commitments that will require repaying money borrowed from a person or from an institution. A significant requirement for the borrowers’ part to understand what he or she is getting into to. However, sub-prime lending does have moral concerns. The borrowers are not qualified for regular loans, but they may need it. They are ready to take loans at higher interest rate because they need it and sub-prime lending seems to be a better option to them. The mortgage crisis in the United States was viewed as having good intended utilitarian motives by the corporate world and public policy makers to provide mortgage loans to at risk customers. Utilitarianism is defined by Velasquez (2006) as that initiative that place goodwill the behalf as many people possible. It does well to both lender and the borrower and consequently it lead to aggregate wellbeing. The unqualified are getting loans and fulfilling requirements, and on the other side the lender enjoys receiving high interest rate. This shows that the moral concerns for sub-prime lending are based on utilitarianism. It is supported by the ethics system unless there is deception in it.

2. What should CitiFinancial do about single-premium life insurance?…...

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