Sublime Lending Fiasco Analysis

The Sublime Lending Fiasco that occurred in the United States was an, unfortunately, catastrophic example of how the misuse of money and power along, with a lack of ethical consciousness, can lead to a nation wide crisis that affects a unsettling large amount of innocent people. The mortgage investors involved in this fiasco are a prime example of how greedy and selfish behavior can undercut one’s ethical principles. These mortgage investors used their power to enhance their financial gains without taking into consideration the long term effects to the consumers, and public. The main ethical misconducts coming out from this crisis have to do with the emphasis of quantity, rather than quality concerning mortgage brokers, banks, and investment …show more content…
This risk was in the form of people, who normally would not qualify for a home mortgage, securing mortgages with no required down payment, no proof of income and only interest paying payments. They were able to add this risk because the recently defaulted homes now belonged to these lenders and were covered by these defaults. Mortgage brokers took advantage of this increased number of people buying mortgages, and since the way they get their money depends solely on the amount of mortgages that are sold, they were not concerned with the actual quality of these people’s purchases. Similar to the accounting profession, mortgage brokers and mortgage lenders are are part of a service industry who are responsible for providing outstanding and honest services to their customers. These customers include the public and these individuals buying homes. Sadly, money has constantly proven to be a source of concern regarding the ethics of big businesses. These businesses are run by humans who are not perfect and can be quite easily persuaded by greed. Therefore, it is of great importance to stress the importance of remaining ethical, especially during times of temptation. These mortgage brokers and mortgage lenders should have paid closer attention to what exactly they were doing …show more content…
These investment banks failed to do act out of the best interest to these investors by not looking, or simply ignoring the actual quality of these mortgages, many of which were obviously poor quality. The investors assumed that these investment banks would have their best interest in mind when providing them with “good” investment opportunities. In order for society to function properly it requires a basic understanding and belief in the ethics of others. I do not see it as unethical that these investors invested in these mortgages provided to them by these banks because it is normal for one to assume that who they are working with possess good ethical character. The ethical concerns come from the investment banks who either failed, or purposefully acted with disregarded to the implications and subsequent events of their actions. Their actions caused harm to the investors and to these people trying to buy homes. The whole financial situation becomes frozen as these home buyers default on their loans because they were not able to keep up with their payments. As more and more houses go up for sale, there is a surplus, which leads to a decrease in the value of these homes. Investors no longer want to buy these mortgages from the investment banks and both the investors and investment bankers are left with