...Student Loan Debt – Is there a solution to the crisis? Many Americans view college as a rite of passage, a method to securing long term financial stability. With a bachelor’s degree becoming the new standard qualification for entry level jobs, more and more students are seeking them out. Many students resort to expensive loans to cover the cost of their schooling with the hopes that they will be able to quickly pay them off with their swanky out of school job. Student borrowing has become so rampant that it is now the second largest source of household debt behind housing. This research paper will discuss recent changes in student loan market and the potential of a crisis in the near future due...
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...William R. Gillikin, Jr. 5611 Juneberry Ct. Wilmington, NC 28403 910-409-3514 Gillikinw08@students.ecu.edu Professional Experience Loan Officer and Originator November 2005 – December 2008 Premier Lending Corporation Raleigh, NC – A small Mortgage Brokerage Firm that provided clients with tailored mortgage loans, great customer service, and financial consultation. • Generated Sales leads and made Sales calls • Originated over 40 mortgages for home purchases and refinances (generated $55,800 in revenue for this company) • Solidified contacts with local realtors, contractors, financial advisors, and other referral sources, met with all potential borrowers, and inspected all properties for requested financing • Reviewed and analyzed loans for approval in accordance with State and lender guidelines Inbound Sales Representative April 2010- October 2010 Time Warner Cable • Handled forty inbound Service and Sales calls per day • Analyzed Consumer Needs and implemented Time Warner Cable’s Sales process • Successfully completed Time Warner Cable’s first ever training class on Signature Home Suite of products and sold product Suite in test market of Charlotte, NC and Assisted others Representatives in their training • Completed Sales Orders and entered proper coding Data Analyst February 2009 – February 2010 Research Triangle Institute/HR Directions Raleigh, NC –A nonprofit institution whose mission is to improve the human...
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...HSBC’s Mortgage Lending Decisions and the Big Melt It isn’t often that the American financial system, and its world counterpart, has a near- death experience. The last time was the 1930s. Beginning in 2007 and extending through 2009, American and global financial systems failed, melted down, and were rescued only by concerted central bank interventions in all the major industrial countries. The United States directly invested about 1 trillion dollars in U. S. financial institutions, and guaran-teed an estimated $ 14 trillion dollars in private debt. The complete history of this period has not been written. Many causes, involving many different actors, have been identified. Some have likened the big melt to a “ perfect storm” where a number of storm systems just happened to combine to form a much larger, lethal storm. But one cause was the failure of decision- making models, both the model builders and the financial man-agers who relied on those models. One of the major players in this crisis was HSBC Holdings PLC, the third largest bank in the world based on market value, and the largest bank in Europe. In the financial meltdown of 2008— 2009, HSBC joined the other major money center banks in a collective failure. HSBC weathered the turmoil in the financial markets better than most of its rivals, mainly because it had profited from continuing growth in Asia, where it generates about 65 percent of its pretax profit. But the company’s stock prices have fallen by half from their...
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...Deal Fees Under Fire Amid Mortgage Crisis --- Guaranteed Rewards Of Bankers, Middlemen Are in the Spotlight By Liam Pleven and Susanne Craig The Wall Street Journal, January 17, 2008 (Copyright (c) 2008, Dow Jones & Company, Inc.) To understand a root cause of the financial crisis shaking global markets, take a look at Kevin Schmidt's paycheck. Mr. Schmidt arranges mortgages in Shreveport, La. He earns his money upfront, taking a percentage of each loan once papers are signed. "We don't get paid unless we can say YES" to loans, his firm's Web site says. The problem, which Mr. Schmidt says he sees clearly: Brokers have little incentive to say "no" to someone seeking a loan. If a borrower defaults several months later -- as Americans increasingly are doing -- it's someone else's problem. At every level of the financial system, key players -- from deal makers on Wall Street and in the City of London to local brokers like Mr. Schmidt -- often get a cut of what a transaction is supposed to be worth when first structured, not what it actually delivers in the long term. Now, as the bond market wobbles, takeover deals unravel and mortgages sour, the situation is spurring a re-examination of how financiers get paid and whether the incentives the pay structure creates need to be modified. This week, Congress asked three prominent executives to testify about their pay packages. Upfront commissions and fees are well established on Wall Street. Investment banks get paid when billion-dollar...
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...Part 1 Mini Case: a. Why is corporate finance important to all managers? Corporate finance is important to all managers because managers should understand and know the health of the company they are working for. Secondly, managers have an obligation to maximize the value of a company for the shareholders of an organization. The decisions that will be made on a regular basis are all affected by the current financial state of a corporation. b. Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form. The forms a company may have from the start up phase to a major corporation phase are as follows: The first step of a corporation’s existence maybe a standard business license as the company starts operating. This is normally controlled as a sole proprietorship. The advantages for this type of form are that: it is easily created and very inexpensive. This form is also subject to few government regulations and is taxed as personal income. The disadvantages include limitations in funding and growth available, the owner has unlimited liability and the life of the business is directly tied to the life span of the owner. The second form maybe a partnership. This allows more flexibility than a sole proprietorship but still has some limitations. For example, a partnership may have a few different options that include a limited partnership and an LLC. One disadvantage...
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...Chapter 12 Project Finance David Gardner and James Wright HSBC Introduction The purpose of this chapter is to provide an overview of Project Finance. This chapter will outline what Project Finance is, the key features which distinguish it from other methods of financing, the motivations and circumstances for utilising it and the typical structuring considerations therein. Moreover, it will be shown to be a method of infrastructure finance 1 which has become increasingly relevant in the wake of the Global Financial Crisis 2 . What is Project Finance? Project Finance can be characterised in a variety of ways and there is no universally adopted definition but as a financing technique, the author’s definition is: “the raising of finance on a Limited Recourse basis, for the purposes of developing a large capitalintensive infrastructure project, where the borrower is a special purpose vehicle and repayment of the financing by the borrower will be dependent on the internally generated cashflows of the project” This definition in itself raises a number of interesting questions, including: What do we mean by ‘Limited Recourse’ financing – recourse to whom or what? Why is Project Finance typically used to finance large capital intensive infrastructure projects? Why is the borrower a special purpose vehicle (SPV) under a project financing? What happens if the internally generated cashflows of the project are not sufficient to repay the financiers of the project? These points will...
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...Harvard Business School 9-291-026 Rev. October 29, 1993 Note on Bank Loans Bank loans are a versatile source of funding for businesses. For example, these loans can be structured either as short- or long-term, fixed or floating rate, demand or with a fixed maturity, and secured or unsecured. While each potential borrower's business is unique, reasons to borrow generally include the purchase of assets including new fixed assets or entire businesses, repayment of obligations, raising of temporary or permanent capital, and the meeting of unexpected needs. Loan repayment generally comes from one of four sources: operations, turnover or liquidation of assets, refinancing, or capital infusion. This note describes traditional bank lending products, the role of the lending officer, credit evaluation, and the structuring of credit facilities and loan agreements. Specialized loan and credit products are described in Appendix A. Traditional Commercial Bank Lending Products While increased competition has forced banks to develop innovative credit facilities and financing techniques, traditional products, which include short-term, long-term, and revolving loans, continue to be the mainstay of commercial banking. Short-Term Loans Short-term loans, those with maturities of one year or less, comprise more than half of all commercial bank loans made. Seasonal lines of credit and special purpose loans are the most common short-term credit facilities. Their primary use is to finance...
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...Susan Yuska at the Chicago Fed was very helpful in guiding me through the Bank Holding Company Database. http://www.bof.fi ISBN 978-952-462-340-7 ISSN 0785-3572 (print) ISBN 978-952-462-341-4 ISSN 1456-6184 (online) Helsinki 2006 The effect of lenders’ credit risk transfer activities on borrowing firms’ equity returns Bank of Finland Research Discussion Papers 31/2006 Ian W Marsh Monetary Policy and Research Department Abstract Although innovative credit risk transfer techniques help to allocate risk more optimally, policymakers worry that they may detrimentally affect the effort spent by financial intermediaries in screening and monitoring credit exposures. This paper examines the equity market’s response to loan announcements. In common with the literature it reports a significantly positive average excess return – the well known ‘bank certification’ effect. However, if the lending bank is known to...
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...PRUDENTIAL REGULATIONS FOR CORPORATE / COMMERCIAL BANKING (Updated on January 31, 2011) BANKING POLICY & REGULATIONS DEPARTMENT STATE BANK OF PAKISTAN Disclaimer: State Bank of Pakistan compiles a booklet of Prudential Regulations from time to time for convenience of users. Updated version of such a booklet containing amendments in the regulations made through circulars/Circular letters to date is being issued. Due care has been taken while incorporating amendments, however, errors and omission may be expected. In case of any ambiguity, users are advised to refer to the original circulars/circular letters on the relevant subject(s), which are available on SBP’s website (www.sbp.org.pk). THE TEAM NAME DESIGNATION Inayat Hussain Executive Director (BPRG) Syed Irfan Ali Director (BPRD) Muhammad Saleem Additional Director (BPRD) Kazi Sarfraz Joint Director (BPRD) Amjad Ali Joint Director (BPRD) Ishrat Hussain Deputy Director (BPRD) Rao Ahmed Mukhtar Deputy Director (BPRD) Mahvish Naeem Assistant Director (BPRD) Nazia Tahir Bodla Assistant Director (BPRD) Website Address: www.sbp.org.pk CONTENTS PART-A PART-B Definitions. Regulations. RISK MANAGEMENT (R) Regulation R-1 Regulation R-2 Regulation R-3 Regulation R-4 Limit on exposure to a single person. Limit on exposure against contingent liabilities. Minimum conditions for taking exposure. Limit on exposure against unsecured financing facilities. Linkage...
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...PRUDENTIAL REGULATIONS FOR CORPORATE / COMMERCIAL BANKING (Updated on January 31, 2011) BANKING POLICY & REGULATIONS DEPARTMENT STATE BANK OF PAKISTAN Disclaimer: State Bank of Pakistan compiles a booklet of Prudential Regulations from time to time for convenience of users. Updated version of such a booklet containing amendments in the regulations made through circulars/Circular letters to date is being issued. Due care has been taken while incorporating amendments, however, errors and omission may be expected. In case of any ambiguity, users are advised to refer to the original circulars/circular letters on the relevant subject(s), which are available on SBP’s website (www.sbp.org.pk). THE TEAM NAME DESIGNATION Inayat Hussain Executive Director (BPRG) Syed Irfan Ali Director (BPRD) Muhammad Saleem Additional Director (BPRD) Kazi Sarfraz Joint Director (BPRD) Amjad Ali Joint Director (BPRD) Ishrat Hussain Deputy Director (BPRD) Rao Ahmed Mukhtar Deputy Director (BPRD) Mahvish Naeem Assistant Director (BPRD) Nazia Tahir Bodla Assistant Director (BPRD) Website Address: www.sbp.org.pk CONTENTS PART-A PART-B Definitions. Regulations. RISK MANAGEMENT (R) Regulation R-1 Regulation R-2 Regulation R-3 Regulation R-4 Limit on exposure to a single person. Limit on exposure against contingent liabilities. Minimum conditions for taking exposure. Limit on exposure against unsecured financing facilities. Linkage...
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...term paper on “Unethical practice of Sonali Bank Ltd” Submission Date: 30-11-2013 Letter of Transmittal November 30, 2011 To Dr. A. R. Khan Professor Department of Banking Faculty of Business Studies University of Dhaka Subject: Submission of Term Paper on Social Responsibility & Business Ethics. Dear Sir, As instructed and part of our academic program under EMBA, I do hereby submit my report on ‘Unethical practice of Sonali Bank Ltd.’ for your kind review and necessary reference. While preparing this report, I tried my best to follow the guidelines you have given and also have gathered some practical experience. I hope that this report will meet your expectation. I have engaged our intense efforts to bring out this study report with the target of achieving perfection but we are in a little doubt how far I have attained it. It was a great pleasure for me to work on this report. I shall be glad to furnish you with any explanation, if necessary. I shall be highly obliged if you kindly accept my report. Sincerely yours, Abu Sadat Md. Salim I.D No: 51221026 21st Batch Acknowledgement It gives me much pleasure to recall with cordial reverence and deepest of gratitude the indispensable guidance, constant encouragement and unparallel stimulation that influenced untiring efforts. Sympathetic advice and invaluable suggestions of our respectable teacher...
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...MAJOR PROJECT ON CUSTOMER PREFRENCES WITH REGARD TO THE RETAIL BANKING SCHEMES This Dissertation report is being submitted as a part of the requirements of the MBA (FINANCE) Program of Punjab Technical University ,Jalandhar. SUBMITTED TO: PROJECT GUIDE: SUBMITTED BY: Kamna Pathak MBA (FINANCE) 2 YR. ROLL NO. ……………. RIMT – IMCT Mandigobindgarh ACKNOWLEDGEMENT This study was made possible with the consultations, support and kind opinions from several people. So with immense gratitude, I acknowledge all those, whose guidance and valuable inputs have helped in the materialization of this project. No words are enough to thank Assistant Manager Mr. Rahul Kapoor of State Bank of Patiala, who not only inspired me to work on this project but also accepted to guide me a lot. In spite of heavy responsibilities and busy schedules, he always managed time to provide proper guidance. Clearly I owe a special in-depth of gratitude to my friends who created a motivating environment to work on this project and also helped me in understanding and reviewing major concept from various point of views. Finally I would like to be grateful to all those who directly or indirectly have been of great help and obliged me with their support and have helped me in converting my collection of data and information into a finely polished project. DECLARATION I Kamna Pathak of MBA(Finance) 2nd year, studying at RIMT-IMCT Mandigobindgarh...
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...and businesses are slowly building back up. The sub-prime financial crisis of 2007 and 2008 financially destroyed the lives of many, but how could this have happened? So what is a sub-prime mortgage anyways? According to investopedia.com, a sub-prime mortgage is, “a type of loan granted to individuals with poor credit histories (often below 600), who, as a result of their deficient credit rating, would not be able to qualify for conventional mortgages. Because sub-prime borrowers present a higher risk for lenders, sub-prime mortgages charge interest rates above the prime lending rate.” Our credit rating is called our FICO score, which is simply a numerical value that through evaluation of our prior credit related purchases determines our credit risk or possibility of default. This process of generating scores was through the use of computer technology, which has enabled financial institution and other lenders, a more cost-effective process to determine who should be given a loan. Stepping back for a moment, we should understand that a mortgage is a loan given to households or businesses for the purpose of purchasing a home, land, or other structures. That property is used as collateral for the loan if the borrower should default. In addition, we should understand risk and the underlying ways that we need to expect to see to occur. As we know, anytime we give an individual the benefit of the doubt that their word will be upheld a degree of risk involved. What’s more is...
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...Angelo Mozilo, founder and Chairman of Countrywide Financial Corporation, the driving force behind the company’s zeal to become the largest real estate mortgage originator in the United States. The same zeal leads to the company’s collapse and led to an extraordinary collapse of the US housing market. Mozilo and partner, David Loeb, founded Countrywide in 1969 in New York with the strategic intent of creating a nationwide mortgage-lending firm. The company opened a retail branch in California in 1974 and, by 1980, had 40 offices in eight states. In 1981, the pair launched a securities subsidiary, which would, specialized in the sale of mortgage-backed securities (MBSs). By 1985, Countrywide’s annual loan productions topped d $1 billion. This all took place on the backs of a booming U.S. housing market bubble which began in 1994 and ended in 2006. By the time of David Loeb’s death in 2003, the company’s annual mortgage originations reached to more than 2.5 million. The company’s financial services division originated more than 2.2 million loans totaling $408 billion by 2006. By 2007, the company had 661 branches in 48 states. Bank of America purchased the company in July of 2008 in a $4 billion all-stock transaction. How It All Started Because we live in a capitalist society, money is the driving force behind all of our daily living activities. Without money, it would be difficult to purchase much needed necessities such as food and clothes. One of the main necessities...
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...predatory lending? Predatory lending is any lending practice that imposes unfair or abusive loan terms on a borrower. It is also any practice that convinces a borrower to accept unfair terms through coercive, deceptive, exploitative, or unscrupulous actions for a loan that a borrower can’t afford, doesn’t need, or doesn’t want. Predatory lending benefits the lender, not the borrower by ignoring or hindering the borrower’s ability to repay the debt. These lending tactics attempt to take advantage of a borrower’s lack of understanding about loans, terms, or finances in general (Krulick, 2014). Who can be targeted in these illegal practices? Predatory lenders typically target minorities, poor, elderly, and less educated people. People who need immediate cash are also targeted. For example people that need to pay medical bills, need to make a home repair, or someone that needs help making a car payment. People with credit issues or people who recently lost their jobs can be targets as well. The credit issues often disqualify borrowers from conventional loans or lines of credit but yet they have substantial equity in their homes. Predatory lending can take place in many forms including payday loans, car loans, tax refund anticipation loans, or any type of consumer debt. Over the past several years, predatory lending practices were prevalent in the area of home mortgages. Since home loans are backed by a borrower’s real property, a predatory...
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