banks preceding the Recession combined with unfair lending practices were the
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[1] A proximate cause was the rise in subprime lending. The percentage of lower-quality subprime mortgages originated during a given year rose from the historical 8% or lower range to approximately 20% from 2004 to 2006‚ with much higher ratios in some parts of the U.S.[2][3] A high percentage of these subprime mortgages‚ over 90% in 2006 for example‚ were adjustable-rate mortgages.[4] These two changes were part of a broader trend of lowered lending standards and higher-risk mortgage products.[4][5]
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Tucker (2009‚178) believes that the most significant barrier to entry in an oligopoly is economies of scale. Economies of scale generally refer to the cost advantages that will be associated with large organizations. Margaretta (2012‚26) suggests that companies pursue economies of scale in the belief that this will be decisive in determining a competitive advantage and increased profitability. Woolworths enjoys significant economies of scale in relation to its competitors. In the supermarket industry
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because homes can be expensive‚ most people need to borrow money to buy them. In the early 2000s‚ mortgage rates were low‚ which allowed people to borrow more money with lower monthly payments. According to Katalina M. Bianco‚ author of “The Subprime Lending Crisis: Causes and Effects of the Mortgage Meltdown” the U.S. ownership rate increased from 64% in 1994 to 69.2% in 2004; this demand helped fuel the rise of housing prices (Bianco‚ 2008). Because home prices were increasing‚ many homeowners decided
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Running head: CITIGROUP: GLOBAL AND DOMESTIC ENVIRONMENTAL FACTORS CitiGroup: Global and Domestic Environmental Factors - University of Phoenix MKT 421 Marketing Professor Smith March 1‚ 2009 Global and Domestic Environmental Factors Like any global organization doing business today; CitiGroup is feeling the pressure of an increasingly difficult business climate. Economic environmental factors caused by the mortgage crisis have taken their toll on Citi‚ both domestically and abroad
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puzzling. 4) Unlike in 2001-02‚ when the Fed’s policy arrested the recessionary trend following the dotcom bubble burst‚ in this occasion the Fed’s policy have failed to arrest the economic slide. . Growth of the subprime market Subprime lending consists of loans
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(2009a). Here’s how the Community Reinvestment Act led to the housing bubble’s lax lending‚ June 27‚ 2009. Retrieved 15 January‚ 2010 from http://www.businessinsider.com/the-cra-debate-a-users-guide-2009-6 Carney‚ J. (2009b). Sorry‚ folks‚ the CRA really did require crap lending standards‚ June 23‚ 2009. Retrieved 15 January‚ 2010 from http://www.businessinsider.com/sorry-folks-the-cra-really-did-require-crap-lending-standards-2009-6 Foote‚ C.‚ Gerardi‚ K.‚ Goette‚ L. & Willen‚ P.‚ (2008). Journal
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housing boom‚ low interest rates‚ easy credit conditions‚ weak and fraudulent underwriting practices‚ deregulation‚ etc. Among them‚ the primary trigger is believed to be the growth of the housing market in US. As the banks were practicing sub-prime lending‚ more loans were given out to potential house owners relentlessly. As a result‚ housing market was seemingly a lucrative business internationally that attracted investors throughout the world to invest in US housing market. In addition‚ easy availability
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loans‚ credit cards and private label credit cards‚ personal non-credit card loans‚ taxpayer financial services and specialty insurance products. The following are the primary businesses that make up HSBC Finance Corporation: Consumer and Mortgage Lending (CML)‚ HSBC Credit Center‚ Card and Retail Services‚ HSBC Insurance‚ and Taxpayer Financial Services. As a company‚ HSBC had been in business for 150+ years. My career at HSBC was through its subprime subsidiary‚ Decision One Mortgage. I worked
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A. Significant event from 1980-Financial crisis (acquisitions/mergers) Added services. Wells Fargo has grown mainly through its mergers and acquisitions with small banks and companies. In the late 20th century Wells Fargo acquired Crocker National‚ Barclay’s Bank and First Interstate Bank. These acquisitions occurred between 1986 and 1996. The acquisitions were recorded the largest buyouts to date. The process is as follows: 1. 1990-Norwest acquires First Interstate of Wisconsin 2.
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