...you are starting to look into buying a home and have been qualified by your lender for a Federal Housing Administration (FHA) mortgage due to a limited down payment, you now have an alternative. Fannie Mae has recently introduced their 3% down payment mortgage option. This program compares favorably to FHA financing. It allows 100% of the down payment to be gifted from a relative, offers low mortgage insurance rates, and requires a less restrictive appraisal as compared to the FHA's health and safety repair standards. Below is a summary of the guidelines for the Fannie Mae conventional 97% mortgage: • Past Homeownership Qualification - This mortgage program is available to all homebuyers. Both first and second time home buyers may qualify for this 3% down payment mortgage. • Down Payment - The down payment requirement for this loan program is 3% of the sales price. It allows 100% of the down payment to be a gift from a family member, dependent on the borrower's credit scores. • Owner Occupied - This program can only be used by individuals who intend to occupy the home. It does not allow for investor financing. • Property Type - The Fannie Mae 3% down mortgage can only be used for single-family dwellings and qualifying town-homes and condominiums. • Mortgage Insurance - Fannie Mae does require monthly mortgage...
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...reported cost of the Obama Administration’s cash payments made to Government Sponsored Enterprises (GSEs) Fannie Mae and Freddie Mac was $130 billion (Cover). This number has been a well-publicized figure signaling the corruption of these two mortgage giants. In fact, enormous sums of money often become the public symbol for corruption when corporate fraud is committed. By the same token, Fannie Mae’s $9 billion of overstated earnings from 2001-2003 also became a strong representation for the executive deception that was committed during this time period (Harvard Law School Case). However, the reasons for the fraud itself are often overlooked. While we can’t be certain that executive compensation practices contributed to this fraud, it undoubtedly did not strengthen the idea of producing firm value for the benefit of shareholders. Fannie Mae was created in the midst of the Great Depression (1938) to buy mortgages from lenders so that money would be freed up for other borrowers (Pickert). Although Fannie started off with just $1 billion to purchase mortgages, the organization was extremely effective and shaped American home ownership for a new class of people that once were not considered creditworthy. Essentially, low to middle income buyers were able to receive credit and become homeowners due to the success of Fannie Mae. It is important to note that Fannie Mae was established with an amazing social mission in mind: to help American homeowners realize their dreams...
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...community development as well as more planned, direct support programs that would assist in providing low-priced apartments and even rental vouchers to the deprived families, managed through quasi-public, local public and the private intermediaries (McCarty & Et. Al., “Overview of Federal Housing Assistance Programs and Policy”). The main objective of the paper is to analyze the housing policies adopted by the federal government related to the mortgage and funding system. With this concern, the discussion of the paper will intend to identify the strategies implemented by the federal government persuade lenders and low-income borrowers in dealing with highly risky loans and mortgages. Furthermore, the paper will analyze the role of Fannie Mae and Freddie Mac in the recent sub-prime crisis of 2008. The condition of extreme and mispriced mortgage liability is the main reason behind the current boom in the housing markets. It is not possible to understand the unusual character of this particular cycle without recognizing the parts that...
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...Menu Home Cases Profile Contract Payment Information Update Coverage Minority Diversity Reporting Help Logout Case Number Address Assigned Date New In Process Complete Find Case Number = Find Clear Search Completed Cases Inspection Due Date Schedule Fee Status Menu Snapshot Print Field Notes 02/06/2012 $10.00 COMPLETED(02/07/2012) Print Invite Send Email Case Talk Services Requested AVM Value Focus Photo of house # (located on house, curb, mailbox etc) to verify correct property Photo of the road in front of the property Photo of the subject from the front Instructions The subject address was updated to standard format. Here is the client's provided subject address: 820 BRUNELLOS AVE LAS VEGAS, NV 89123 PLEASE RUSH THIS ORDER • REMINDER: • Client is ordering this inspection to verify the condition of the property. • The clarity of the pictures that you provide will be critical. • The client would like to know about deferred maintenance and damaged areas if any. New client. • Please rush. No invoice is necessary. Payment will be sent to the addressee for fee(s) indicated. Payment reference # 3074371 If data is not available, provide approximations for age, square feet, number of rooms, etc. (indicate when estimated). Reviewers will not approve reports with missing data. Provide comments explaining differences of comps & listings versus subject, if applicable. If you are currently listing this property, have listed it in the past or are in the listing office, you cannot do...
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...‘The US government’s response to the global financial crisis was to prop up some of the key financial institutions stating that they were “too big to fail” because such failures would have extremely serious consequences for the economy and society at large. Research newspaper articles and present a summary of what measures the US government took to protect these financial institutions. Provide examples. Explain and critically analyse both the shareholder and stakeholder models of corporate social responsibility. Can the US government’s actions be justified from either (or both) of these models? Consider both short and long-term consequences of this government intervention. Conclude whether the action taken by the US government is best for society?’ The Global Financial Crisis of the last few years has caused widespread problems for the US government, who were forced to spend billions of (taxpayer) dollars bailing out many of the world’s largest top banks. While a controversial decision, the US government acted on the belief that these institutions were ‘too big to fail’ and their collapse would have far reaching consequences that could have lead to a much dire situation. Throughout this essay, the causes and effects that lead to the GFC and the need for a bank bailout, along with what exactly it entailed will be presented. Then, the US governments’ response in bailing out the banks will be analysed using both a Stakeholder and Shareholder model of Corporate Social...
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...| Has Market Economy approach led the world to the current economic situation? | | | | By:Divya Padmanabhan IES Management College and Research Centre Mumbai, India | Executive summary: “If war is God’s way of teaching geography to the world, recession is His way of teaching everyone a little economics”. The global financial crisis has questioned the efficacy of the existing institutional framework and forced us to rethink on how our financial systems are regulated. It has also posed an important question whether the root cause of this global crisis has been the highly praised ‘Open Market Approach’. The inter linkages in the global economy has ensured that no country remains isolated and unhindered by the crisis. With the economic crisis looming over the people at large, unemployment seems to be at all time high and the whole world having a pessimistic view of the future, capitalism seems to be at loss of reason for this crisis, let alone a find solution for it. There was a time when being a capitalist economy was a matter of pride and people were excited to be part of the “free” economy but somewhere down the line the excitement seemed to have vanished. What was thought to be an epitome of equality, turned out to be the cause of inequality. In an article by Joseph E. Stiglitz “Of the 1%, By the 1%, For the 1%”, 1 percent of the people in USA take nearly a quarter of the nation’s...
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...Mini-case 2 Letting Go of Lehman Brothers Question 1: Do you believe that the U.S. government treated some financial institutions differently during the crisis? Was that appropriate? To assure the financial stability and viability of the U.S. financial system, the U.S. Federal Reserve, the Comptroller of the Currency and the Federal Deposit Insurance Company (FDIC) have the responsibility to support, protect and buffer financial institutions whose failures, they believe, might have a significant effect on the market as a whole. Before making a decision about whether an institution should be poured capital into, the Federal Reserve will consider the institution`s collateral and the ability to repay loans. The Federal Reserve said that the companies that did receive bailouts, such as AIG, Fannie Mae and, Freddie Mac, clearly had the collateral and showed great promise of paying them back in the future, while Lehman Brothers did not. When Federal Reserve Chairman Ben Bernanke was asked how the Lehman case differed from that of American International Group Inc., which received $182 billion in taxpayer aid, Bernanke said there was a fundamental difference. They believed AIG, as the biggest insurance company in the U.S., had valuable assets which could back up the Fed's emergency loan. So the Federal Reserve will absolutely be paid back by AIG. However, Richard S. Fuld Jr., the former chairman and chief executive officer of Lehman Brother, said that they did have the collateral...
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...Case Study: Tapping the Ethnic Housing Market MKT 87505 – Consumer Behavior Theory & Analysis California Southern University Case Study: Tapping the Ethnic Housing Market “A subculture is a segment of a larger culture whose members share distinguishing values and patterns of behavior,” (Hawkins & Mothersbaugh, 2010, page 156). Subcultures are frequently encountered in America due to the ‘melting pot’ nature, continual immigration into the United States, and various religious and ethnic viewpoints experienced in modern day society. A collision of all these subcultures in America has led to difficult marketing approaches to address both the core values and norms of the American culture and unique market behaviors, values, and norms that may be specific to other subcultures. In the case study, “Tapping the Ethnic Housing Market,” Fannie Mae evaluated ethnic groups to determine the different perceptions associated with the home-buying process (e.g. reason to purchase a home, knowledge about the overall purchasing process, and confidence in the process). The case study will discuss the opportunities and challenges facing housing lenders and real estate agents today based in the perceptions of each ethnic group. Analysis “Ethnic subcultures are those whose members’ unique shared behaviors are based on a common racial, language, or national background,” (Hawkins & Mothersbaugh, 2010, page 158). The Fannie Mae case study analyzes the different perceptions of the home-buying...
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...The Role of Accounting in the Financial Crisis: Lessons for the Future S.P. Kothari kothari@mit.edu 617-253-0994 and Rebecca Lester rlester@mit.edu MIT Sloan School of Management E60-382, 30 Memorial Drive Cambridge, MA 02421 December 14, 2011 ABSTRACT: The advent of the Great Recession in 2008 was the culmination of a perfect storm of lax regulation, a growing housing bubble, rising popularity of derivatives instruments, and questionable banking practices. In addition to these causes, management incentives, as well as certain US accounting standards, contributed to the financial crisis. We outline the significant effects of these incentive structures, and the role of fair value accounting standards during the crisis, and discuss implications and relevance of these rules to practitioners, standard-setters, and academics. This article is based on a presentation by Deputy Dean and Professor SP Kothari of the Sloan School of Management, Massachusetts Institute of Technology, at Baruch College on October 25, 2010. 1 Electronic copy available at: http://ssrn.com/abstract=1972354 The Role of Accounting in the Financial Crisis: Lessons for the Future I. Introduction The Great Recession that started in 2008 has had significant effects on the US and global economy; estimates of the amount of US wealth lost are approximately $14 trillion (Luhby 2009). Various causes of the financial crisis have been cited, including lax regulation over mortgage lending,...
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...Global Financial Crisis: The 2007–2012 global financial crisis, also known as the Global Financial Crisis (GFC), late-2000s financial crisis or the second "Great Recession", is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s.[1] It resulted in the collapse of large financial institutions, the bailout of banks by national governments and downturns in stock markets around the world. In many areas, the housing market also suffered, resulting in numerous evictions, foreclosures and prolonged unemployment. It contributed to the failure of key businesses, declines in consumer wealth estimated in trillions of US dollars, and a significant decline in economic activity, leading to a severeglobal economic recession in 2008.[2] The financial crisis was triggered by a complex interplay of valuation and liquidity problems in the United States banking system in 2008.[3][4] The bursting of the U.S. housing bubble, which peaked in 2007, caused the values of securities tied to U.S. real estate pricing to plummet, damaging financial institutions globally.[5][6] Questions regarding bank solvency, declines in credit availability and damaged investor confidence had an impact on global stock markets, where securities suffered large losses during 2008 and early 2009. Economies worldwide slowed during this period, as credit tightened and international trade declined.[7] Governments and central banks responded with unprecedented fiscal stimulus...
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...CHAPTER 1 ACCOUNTING: INFORMATION FOR DECISION MAKING OVERVIEW OF BRIEF EXERCISES, EXERCISES, AND CRITICAL THINKING CASES Brief Exercises B. Ex. 1.1 B. Ex. 1.2 B. Ex. 1.3 B. Ex. 1.4 B. Ex. 1.5 B. Ex. 1.6 B. Ex. 1.7 B. Ex. 1.8 B. Ex. 1.9 B. Ex. 1.10 Learning Objectives 1, 3, 5 2, 5 3, 4 5, 6 1, 3, 5, 6 5, 6 2, 5, 6 7, 8 5, 7 1 Topic Users of accounting information Components of internal control Inexact or approximate measures Standards for the preparation of accounting information FASB conceptual framework PCAOB COSO Professional certifications in accounting AICPA code of professional conduct Personal benefits of accounting skills Skills Analysis Analysis Analysis, judgment Analysis Analysis Analysis, research Analysis, ethics Analysis Analysis, ethics Analysis Exercises 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 1.10 1.11 1.12 1.13 1.14 1.15 1.16 Topic You as a user of accounting information Real World: Boeing Company, California Public Employees Retirement System, China Airlines Users of accounting information What is financial reporting? Generally accepted accounting principles Accounting organizations Investment return Accounting terminology Accounting organizations Financial and management accounting Management accounting information Accounting organizations Purpose of an audit Audits of financial statements Ethics and professional judgment Careers in accounting Home Depot, Inc. general information Learning Objectives Skills 1 Analysis, judgment 3, 4 Analysis...
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...FACING THE ECONOMIC CRISIS IN THE UNITED STATES: THE CAUSES AND SOLUTIONS Prepared for Kaplan University GB512 Business Communication Dr. Sue Pettine Prepared by Katherine M. Moore Student September 22, 2011 Contents Executive Summary……………………………………………………… 3 Introduction …………………………………………………………………. 3 Background……………………………………………………………………. 3 Potential Problems and Solutions ………………………………………………. 5 Conclusion and Recommendation ……………………………………………… 7 References ……………………………………………………………………. 7 EXECUTIVE SUMMARY The purpose of this research proposal is to take a look at the economic crisis in the United States. Our country is currently facing one of the worst crises since the Great Depression. Because of this financial crisis many people are facing many anxieties today. In order to work on a solution for this dilemma, we must first admit that we are in a dreadful predicament. This is not the time to disregard the economic setback. We must take a look at our financial situation not only in the United States but globally as well. When a nation is in a crisis there is a tendency to shift the responsibility on just one person. In this research proposal we will look at the economy as a whole. We will tackle the many hard questions that arise when a crisis hit. Some of the hard questions that we will...
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...Table of contents Table of contents 2 Executive Summary 3 I: Key financial trends 4 Global Financial Crisis 4 European Sovereign Debt Crisis 6 Tighter financial regulation 8 II: Impact on entrepreneurial start-ups 9 Investment and valuation decisions 9 References 15 Appendix A: Effects of recession on entrepreneurial start-ups 17 Appendix B: New trend – business incubators 23 Appendix C: Valuation methodology 25 Executive Summary The Global Financial Crisis (GFC) is widely seen as the worst financial crisis since the great depression in the 1930’s. It negatively impacted global financial markets, led to the collapse of major financial institutions, the nationalisation of banks and caused a deep global recession. From its beginnings in the United States, networked financial institutions quickly led to international contagion and the European sovereign debt crisis. In response, the G20 officially endorsed Basel III – a new global standard to reduce systemic risk through stronger capital bases designed to act as a buffer during periods of financial instability and avoid bailouts. Sustained European government efforts to reduce debt through austerity have largely failed, and focus is now shifting to growth strategies. Entrepreneurial start-ups are a key route to driving long-term sustainable growth, but have been hit hard by sluggish consumer demand, tightening credit and scarce, expensive capital. This report discussed some of the implications for both...
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...Th Fi ncial Cris he inan sis: 2007 2 7-2009 gar N g A. Norton, Jr. Illin nois Sta Uni ate iversity y Cover page im mage ©2010 Pho otoDisc, Inc. Copyright © 2010 by John Wiley & Sons, Inc W c. All rights rese erved. No part of thi publication ma be reproduced stored in a ret is ay d, trieval system or transmitted r in any form o by any means, electronic, mec or , chanical, photoco opying, recordin scanning ng, or otherwise, except as permi itted under Sections 107 or 108 o the 1976 Unit States of ted Copyright Ac without either the prior writte permission of the Publisher, o authorization t ct, r en f or through payment of th appropriate pe he er-copy fee to th Copyright Cle he earance Center, I Inc., 222 Rosewo Drive, ood Danvers, MA 01923, website www.copyright A e t.com. Requests to the Publisher for permission should be r addressed to t Permissions Department, Joh Wiley & Son Inc., 111 Rive Street, Hobok NJ 07030the hn ns, er ken, 5774, (201)74 48-6011, fax (20 01)748-6008, we ebsite http://www w.wiley.com/go/ /permissions. To order book or for custom service, pleas call 1(800)-CA ks mer se ALL-WILEY (2 225-5945). Printed in the United States of America. e o ISBN 978- 0-470-56516-2 The Financial Crisis: 2007-2009 Objectives Understand the major influences that led to the 2007 2009 Financial Crises Describe the role that agency cost issues played in the financing of mortgages to developing...
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...estate industry statistics, Realtytrac.com (2011), one in every 611 United States housing units had a foreclosure filing during the month of July 2011 and it appears that the foreclosure processing delays, combined with the smorgasbord of national and state-level foreclosure prevention efforts such as loan modifications, lender-borrower mediations and mortgage payment assistance for the unemployed may be allowing more distressed homeowners to stave off foreclosure.. A CNBC report said that the falloff in foreclosures is not based on a “robust recovery in the housing market but on short-term interventions and delays that will extend the current housing market woes into 2012 and beyond” (“States with the highest foreclosure rates,”2011). A summary of active foreclosures by State as of July 2012 for the top five states is shown below (Realtytrac.com). |Nevada |1 in every 115 homes | |California |1 in every 239 | |Arizona |1 in every 273...
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