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Foreclosures, Predatory
Lending & the Ethical Dilemma
INTRODUCTION
Mortgage company dealing with many
foreclosures. Houses are worth 3040% less then what they paid. They
can still afford the mortgage, but is it
worth it?
All staff meeting to discuss problem.
Senior leaders remind everyone that
a mortgage is a legal contract. Multi
billion dollar bailouts leave people as
victims. Media coverage is negative
to banks. Mortgage holders are
QUESTION 1 :
Which ethics theories are
being applied here?
Universal Ethics
QUESTION 2 :
If homeowners made poor financial
decisions taking too much equity
out of their houses or buying at the
wrong time - Do the predatory
lending practices of the bank and
mortgage companies justify
walking away from those
mortgages?
Short sales
Loan modifcation
Deed-in-lieu of foreclosure
Seek for Housing Developer
attention
Proposed
alternativ
es
Enquiries
Discuss
Listen + Explain
QUESTION 3 :
Are homeowners really throwing
good money after bad in making
payments on mortgages for homes
that are worth much less than the
mortgage?
YES.
It is because buyers are expect to get
good return on their investment
rather than losses.
new mortgage
Reduce monthly payments,
lower the interest rates, take
cash out of the existing home
for large purchases or change
mortgage companies.
OPTION
TO SAVE
THE
HOUSE
FORBEARA
NCE
Temporary postponement of
mortgage payments in lieu of
forcing a property to
foreclosure.
MORTGAGE
RELIEF
PROGRAM
QUESTION 4:
o Would you walk away from your
mortgage in this situations? How would
you justify that decision?
Price of the property fallen? Will you just
walk away?
Before you walk away, you need to analyze
the risk and option available for the problem
CONSEQUENCES OF FORECLOSURE
CONCLUSION
Make sure homeowners understand
all of the options and consequences
before decided to walk away from
mortgage payment
THANK YOU