BSHS/322- Professional, Ethical, and Legal Issues and Human Services
October 31, 2011
University of Phoenix-Online
Facilitator: Audra Stinson
Dynamics of Ethics
This following paper will include specific information about the important dynamics of ethics and the origin which they came about. The details within this passage will provide an ethical issue on a midstream change of expectations and/or ground rules of that said specific scenario. This paper will also provide adequate knowledge about the previous situation that was stated within the article or scenario, the changes that are taking place during this issue, why the changes are taking place, the desired outcomes and/or future situation that may be ahead, and the authors own opinion about the said issue.
The situation that had been previously presented itself would be in this instance where Fannie Mae and other financial institutions, such as Freddie Mac, where he or she were able to accept and give out loans for the people that were in need of housing. This was the balloon program for the financial institutions so that it made it easier for the customers to buy homes and other properties with low interest rates and financing. This situation seemed to be a great idea from the beginning because it offered the clients a new way out and a longer stay in his or her homes without the worry of moving out and/or losing his or her homes. At the time when this program became in effect, it seemed like to be a pretty good way for the individuals to have a chance at having a place of his or her to reside.
The many issues that the situation had evolved into is that the banks and these two other institutions gave these loans to people that couldn’t afford it. In turn, this took a turn for the worse and ultimately hurt the economy all over the world, especially within the United States. Making these irrational decisions cost the big corporations billions of dollars and the homeowners his or her homes. Because these financial institutions started this program it became apparent to those that got caught in the balloon programs would eventually lose his or her homes because of the company’s bad choices and decisions of predicting that the market wouldn’t do so poorly to cause this devastation.
According to "Fannie Mae" (2011), following his and her mission to meet federal Housing and Urban Development (HUD) housing goals, GSEs such as Fannie Mae, Freddie Mac and the Federal Home Loan Banks (FHLBanks) have striven to improve home ownership of low and middle income families, underserved areas, and basically generally through special affordable methods such as "the ability to obtain a 30-year fixed-rate mortgage with a low down payment (para. 11). with the continuous availability of the mortgage credit under a wide range of economic conditions that could be suitable for any buyer in the market. Then in 2003-2004, the subprime mortgage crisis began.
According to Fannie Mae (2011), the market shifted away from regulated GSEs and radically toward Mortgage Backed Securities (MBS) issued by unregulated private-label securitization conduits, typically operated by investment banks (para. 11).
The Changes that are taking Place
Most of the popular and well known changes that are taking place for this situation are through government funded programs that are or have taken over this epidemic to make it right. The Federal takeover for the Fannie Mae and Freddie Mac refers to applying a conservatorship of the government enterprises by the United States Treasury in the year of 2008. Since this has happened it has been an ongoing issue within the United States because of the many mistakes these financial institutions have made. The changes that are taken effect in United States began on September of the year 2008, by