Mortgages Essay Example | Topics and Well Written Essays - 1000 words

Mortgages - Essay Example These compound problems have worked to create a situation in which many homeowners have found themselves holding on to high interest rate mortgages for homes that are worth less than they owe to pay off their mortgage. Such a situation is known as an â€Å"underwater† mortgage. Due to the fact that different political parties have sought to take advantage of this misfortune by seeking to capitalize on the rhetoric surrounding the issues as a way to drum up support for a given candidate, the problem has been exacerbated as the federal government has furtively toyed with different types of interventions only to do little if anything to ameliorate the root problem. Thus, this brief essay will consider whether homeowners with subprime mortgages should be allowed to force their lenders to renegotiate their terms. The answer to the question is somewhat more complex than a simple ‘yes’ or ‘no’. From a purely economic point of view, the individuals who agreed on the home loans at the bank’s terms and conditions have entered into a legally binding contract that they had every opportunity to review and seek to understand prior to signing on the dotted line. In this way, a degree of culpability must be accepted by those mortgage holders that initially accepted the terms and conditions, regardless of whether they were too lazy to take the time to read and fully understand them (Richardson 87). From the bank’s point of view, much of the problems associated with the high number of subprime mortgages that had to be completed were a result of the unnatural legislation (Dodd-Frank) that was forced upon the banks as a means to fulfill a certain type of quota with reference to those within society that would otherwise never be able to afford or quality to purchase/borrow a house of their own (LaCour-Little et al. 88). In this way, it is impossible to blame the entire situation on the financial institutions themselves as the governmen t had a heavy role in creating such a crisis in the first place. From the individual borrower’s point of view, the banks instituted extraordinarily high interest rates due to the fact that they considered these subprime borrowers to be of an extreme default risk (Hill 49). In a way, these extremely high rates were nearly self-fulfilling prophecies due to the fact that as soon as the economy began to cool, the first individuals that were going to feel the crunch were necessarily those that had borrowed to the max and were going to have hardship making sure that their high interest rate mortgage is paid every month. One might rightly question why it should be incumbent upon the financial institution to renegotiate a signed and legally binding contract that has already been agreed upon with a terms of either 15-30 years. The answer to such a question can actually be found outside of forcing the financial institution to renegotiate the loan terms (An et al. 546). As such, a litan y of refinancing offers exists for qualified individuals. Those rates that were common during the early 2000’s have dropped to record lows within the past several years. The issue with such refinancing offers is that they invariably require a large amount of start up costs associated with actually changing the loan from one lender to another.

Growth Strategies to Achieve Competitive Advantage Essay

Growth Strategies to Achieve Competitive Advantage - Essay Example Business growth is nothing but a double-edged sword. If it is well managed and properly controlled, it would definitely provide remarkable rewards to the shareholders as well as to the leaders of the emerging organization. But when growth is uncontrolled and poorly planned it might results in financial misery and failure (Sherman, A. J. July 13, 2006). Effective planning and management are crucial for sustaining the growth for a long time. Lack of effective planning and management would result to attack by the creditors, competitors, creative takeover specialists and hostile employees. The central question that needs to be asked regarding this topic is what strategies ought to be followed in facilitating growth. Apart from this central question, there could be various sub-questions which would be associated with the business structure, availability of the capital, time and market condition. The central question focus on the strategies that are required for growth. Without proper stra tegy, no management can keep the organization on the growth track. These strategies would be based on the structure of the organization, availability of the capital, time and market condition. As a result, these factors would be the main focus of the sub-questions. XYZ power utility company is operating in a developing state of Southern Africa. The company is a state-operated company; as a result, there is lack of efficiency in company’s operation. There could be various growth strategies for such a company. Ansoff matrix is one of the most useful growth strategies which are widely used in the industry. There are four strategies in Ansoff matrix. These are market penetration, product development, Market development, and diversification. In market penetration strategy organization tries to grow with its existing product within its existing market. In product development strategy firm introduces a new product in the existing market. In market development strategy firm identifies a new market for its existing product and finally in diversification strategy firm introduce a new product in a totally new market (Valuebasedmanagement.net, n.d.).