Economics Class Due Today 2023 Business Finance
2023 1 You work for a mortgage lender that really encourages you to sell ARM loans
1. You work for a mortgage lender that really encourages you to sell ARM loans to your clients. In fact, if 75 percent of the loans you close each month are ARM loans, you receive a very nice bonus.
You have a customer on the phone that you don’t feel understands ARM loans very well despite all your efforts. He tells you repeatedly that he would be better off with a 30-year fixed rate mortgage. You proceed to take his application and send all the required documentation to him for a 5/1 ARM. He signs the documents and returns them to you. You process his loan and close it 30 days later.
- Do you feel you ethically assisted your borrower with this loan?
- What could you have done differently?
2. You have a co-worker at work that you are also friends with. One day, a borrower comes in and meets with him. You overhear the borrower tell your co-worker that he has a loan with his mom and dad for about $10,000 that he pays $300 a month. Your co-worker proceeds as if he didn’t hear your borrower at all. Once he has taken the application, he tells the borrower that he qualifies for maximum financing for a $250,000 home. However, that does NOT take into consideration the $300 a month the
borrower pays his parents for the loan.
- Did your coworker do anything unethical in this transaction?
- Assuming you feel this was an unethical situation, how do you handle this? Remember, this is your friend and co-worker.
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