Essay on A High Degree Of Responsibility For The Financial Meltdown

1075 Words Mar 19th, 2016 null Page
4. The public has a high degree of responsibility for the financial meltdown. It is easy to assign all the blame to corporations, but they cannot sell something if no one will buy it. Part of the reason complex CDO’s were created was to be able to provide the high return that investors were demanding.
The public also bears responsibility in the housing market. Homeowners did not believe that housing could decline. Therefore, many poor choices were made surrounding home ownership. Individuals who really could not afford it purchased homes. While there were definitely predatory lenders operating, individuals still have the ultimate responsibility for their own mortgages. There were plenty of resources available for first time homebuyers, and if you can’t understand what you are agreeing to in a mortgage perhaps you shouldn’t have one. Many homeowners treated their home like a bank, and home equity was spent on paying off other debt and big purchases. When the housing market fell, these homeowners were left underwater.
5. The Financial Services Roundtable ethics policy was violated in several ways during the period leading up to the global financial crisis. As outlined in the film the Inside Job, unscrupulous mortgage originators fabricated loan documents and pushed customers into subprime mortgages that they could not afford and would not have normally qualified for. Locking customers into mortgages that they know will most likely default is taking unfair…

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