MGMT 3610 Lecture Notes - Lecture 13: Bank Of America Home Loans, George Santayana, Html Element
Document Summary
"those who cannot remember the past are condemned to repeat it. " To start the course, we will look at the 2007-2009 financial disaster. The actions leading up to the crises were not illegal at the time. Yet, in retrospect, they were unethical because the actions were unfair, lacked accountability and transparency, and held few responsible for any negative outcomes. Financial institutions in the u. s. had governmental pressure to provide loans to potential homeowners. That pressure was intense enough such that lenders were lax on determining whether the borrowers could pay back those loans. At the same time, the availability of mortgages led to an increase in the cost of real estate, leading many investors to choose real estate investment funds. Typically, there are agencies that value all types of investment funds to determine the safety of the funds. Those rating agencies and government regulators did not assess the risk in these shady loans.