As a leader, the buck stops right there as decision making is a fundamental managerial function. The subprime mortgage calamity was due to Wall Streets greed, and the Governments desire to increase home ownership. Many leaders failed to adhere to their moral and ethical duty which resulted in loans being given to those who could not afford them. Cleary, along with greed; pride, arrogance and flawed decision-making had a significant role in the subprime mortgage calamity as well. To get a better understanding of the Subprime Mortgages crisis, please take a look at the graph below:
Figure
1, House.org @AtifRMian & @profsufi, Data source: Census retail sales Retrieved
from
The
Role of leadership and the subprime
loan decision-making procedures, the lenders,
selected to adhere to has resulted in many homes being lost. The wrong doing of the lending institutions goes against what ought to have been recognized as unethical behavior. Over, the last
few years, the federal government has employed guidelines to help defend
against the unethical behavior and decision-making of the lenders (National Debt, n.d.). The goal of
these guidelines is to minimize unethical behavior in the financial
industry. As concern citizens, we must
concentrate on the ethical practice and decision making of leaders, while ensuring are government leaders
have policies in place to prevent unethical practices and regulating actions of
lending institutions leadership. Unethical decision making has resulted in
legal consequence for the organization.
The leaders are making the
decisions regarding subprime loans focused on the profits and not the
consequences of their actions and how they would affect homeowners. Furthermore, leaders
are more directly impacted by difficult decision-making
and more at risk to face unethical problems due to the ambiguous nature of
business selections in regards to lower standards in business models that are believed acceptable until they are caught (Thiel
et al., 2012). Regrettably, “individual
decisions that put a substantial amount of money at risk in situations”,
violated ethical values (Gilbert, 2013). To
battle this, organizations must build a strong strategy to
promote ethical decision making. Finally, one of the most obvious
mechanisms for accomplishing this goal is training leaders on a focus with
ethical decision-making with sense making as an underlying framework (Thiel et al., 2012.).
Having your own house is the dream of every person. For a middle class person, it is considered as a lifetime achievement as it requires quite a huge amount of money. Banks play a pivotal role in fulfilling this basic need. The products they offer and the services they provide are of immense use to people who intend to have their own house. For a safe and beneficial home loan, proper awareness over the products, policies, terms and conditions of the bank is most important as ignorance may result in more payments to the bank in terms of principal and interest components.
ReplyDeleteBut working with Mr Pedro changed everything in the lending experience, Mr Pedro helped me with a home loan at 2% rate which was very fast and smooth.
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Marie Carlos,
Texas USA