Aug 02, 2017

Discuss why lenders began to relax their standards for borrowers. Questions to ponder... was this a result of legislation that allowed borrowers with lower than expected credit scores to qualify for a mortgage?

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Business Finance

Question 1. Discuss why lenders began to relax their standards for borrowers. Questions to ponder... was this a result of legislation that allowed borrowers with lower than expected credit scores to qualify for a mortgage? Was this a result of greed on the part of lenders? Question 2. Discuss whether congress should pass legislation that allows small business owners tax breaks or tax credits that will allow them to better compete with large corporations. Example: 1. References must be used. The course textbook and Wikipedia will not count as a references. Be aware of bias references. REQUIRED REFERENCES: PRINCIPLES OF MANAGERIAL FINANCE, 6th edition by Lawrence J. Gitman and Chad J. Zutter . Separate the references used in answering each question. 2. It is imperative that the question is answered. Here is an example of Answer. Planning is not useless I do not agree that because of the rapid developments in E-business and E-commerce that planning is useless. Planning is a routine task in the military and civilian environment. The political, economic and social environments around the world, especially in the Middle-east, require military operational planners to develop contingency scenarios to plan future operations and military deployments such as those generated by the Joint Chiefs of Staff prior to Operation Iraqi Freedom (Bowman, 2003). What O`Brien (2004) describes as the scenario approach to planning has already been taking place for many years in the U.S. navy in preparing ships for overseas deployments (Global, 2004). Though the environments are different, both military and private business planning are similar in some aspects and critical for success. Furthermore, O`Briens description of organizational planning, scenario approach and SWOT analysis are similar to military planning. Organizational Planning The organizational planning process is similar to what the U.S. Navy calls the “Fleet Response Plan” for its warships (Global, 2004). The first step of team building entails selection of the shipboard training team members (SBTT) and their five-day training period at the Afloat Training Group (ATG). The second step is the initial assessment of the training and knowledge level of the ship`s crew as well as reviewing administrative programs by conducting a Command Assessment of Readiness and Training (CART). The third step is training the crew as required by anticipated deployments to any part of the world in response to a political or economic crisis. The other three steps in the planning process as described by O`Brien (2004) are similar to what the “Fleet Response Plan” entails during the interdeployment training cycle. Finally, an operational plan is conducted for every major evolution onboard the ship. Before the evolution is executed it is thoroughly planned, briefed, executed and debriefed. Scenario approach. The scenario approach is what the SBTT and ATG use to train shipboard crewmembers. What Peter Senge calls virtual world exercises (O`Brien) are scenarios developed to simulate a hostile environment to safely train. During a final environment period, a ship will be in this virtual world for up to a 96 hour period while the ATG assesses the SBTT and crewmembers to determine if the ship is ready to continue the training cycle and deploy with an Aircraft Carrier Battle Group. SWOT analysis The SWOT analysis is also used by the ATG to develop a training syllabus for the ship. During the CART the ATG will inspect and evaluate the ship to determine its strengths and weaknesses. The training syllabus is then developed to schedule training periods and enhanced training opportunities based on observed weaknesses. The threat is not only the anticipated real-world operating environment, but also the threat of poor performance during training and becoming complacent in watch-standing abilities. Conclusion The comparison between the U.S. Navy and the private sector planning process show the many similarities. One reason could be that most senior officers earn their graduate degrees or that many corporate executives have received some type of military training. Not to be omitted is the fact that five of the past six presidents also served in the military or received military training. Planning was not useless when the maximum airspeed of and aircraft was 200 knots. Planning is what has enabled a surface-to-air missile launched by a warship to intercept a warhead from an intercontinental ballistic missile. For the civilian sector, companies have to plan for the future because they need to earn cash (Preston, 2000). References Bowman, S. (2003). Congressional research service. Iraq: Potential for U.S. military operations. (RL31701). Washington, DC: U.S. Government Printing Office. Global (n.d.). Global Retrieved March 27, 2004, from O`Brien, J. (2004). Management information systems. Manageing information technology in the business enterprise. (6th ed.). New York: McGraw Hill Irwin. Preston, R. (2000, July 24). E-business planning must be for the long haul. InternetWeek, 9.
BUSINESS FINANCENameInstitution AffiliationCourseDate of SubmissionThe creation of lending standards and credit scores was to shield would-be borrowers from mortgages they couldn`t afford and in turn, grant lenders some protection against lawsuits by foreclosed borrowers who claim they shouldn`t have received a mortgage in the first place. (Gitman et al, 2012)The ability to qualify for a mortgage focuses on a prospective borrowers` ability to repay a mortgage, requiring steps in the underwriting process like verifying income and assets, and what that mortgage should look like. The lending institutions like banks, credit companies and even mortgage institution gauge the ability of a lender based on the credit score.The idea that lending institutions relaxing their lending standards as a result of legislation that allowed borrowers with lower than expected credit scores to qualify for a mortgage is false and baseless. It is actually the opposite because the new finalized rule of lending aims at preventing a repeat of the lax lending that led to the subprime mortgage crisis some time back. The legislation hinders those with lower credit scores from acquiring mortgages. It`s important to note that the reason behind the reduced lending standards by mortgage institutions is for the lenders own be...

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