The ethical dilemma I will be talking about throughout this report is about how the United States is going through the biggest recession since the Great Depression in the 1930’s, and one of the main reasons of this is because of the housing market. The two leading causes of the housing market causing so much damage is because all these new houses are popping up while houses aren’t even being sold now, and because they are overly inflated by how they are priced. The housing market should be something that helps the economy in the time of struggles, not bringing the economy down more than what it is now.
Dilemma When people go to find out how to get a loan for a new mortgage they usually look around go to their bank or to a mortgage company to get a loan for their new house. So they sit down and talk to the mortgage broker or loan officer about what they have to do to get a loan for the amount they need to purchase their new house. They end up finding out that they have to do a background check, also they have to fill out papers is that ask them some personal information about their credit history, job history, their income, and also do a police report.
So the customer fills out the information that is needed and then all they can do is wait and see if they get approved for the loan that they applied for. If they don’t get the loan the broker usually helps them to find a house that is in their price range so they can live more comfortably. But that’s not how all the brokers think. And those are the brokers that I’m going to be talking about. The dilemma is between the customer and the loan officer. The actually dilemma is that the mortgage brokers were falsifying the information that the customer was giving them, because they knew they wouldn’t get approved for the loan.
So the brokers would change their income or their credit history just so they would get approved for the loan. So by doing something unethical the broker is affecting the customer and the customer’s family and also could be affecting their self even though they know what they are doing, and they know that it isn’t the ethical thing to do. This is an ethical dilemma because the mortgage broker is taking the customers information and changing it to what will get approved for the loan. They are lying just so they can get a sale.
Sometimes the customer even knows that the broker is falsifying the information they give them and they just let them do it, without stepping up and saying something. It would be like me saying yeah this car is brand new, and the person buys it from me and two weeks later it’s falling apart because I just lied to get the money for the car. The issues of falsifying the information that is given to them would be a great amount. Starting out by the person couldn’t make the payment on their new house because instead of making $50,000 the broker put $75,000, so now they have to either foreclose on their house or just walk away from it.
This also affects their credit because they cannot afford the payments they get behind and all of a sudden they have horrible credit just because of the loan officer. Some more issues are that the broker could lose his license for lying about the information and also be prosecuted by the federal government. The Resolution Some ways that you could resolve this ethical issue is by hiring people closely. You should hire the person that isn’t going to be tempted by unethical behavior because they could put your whole company in jeopardy.
Also, they could set new regulations in the loan offices, so that the broker cannot change any of the information that the customer has told them. I know for a fact that the government has already put the clamp down about this situation. From the state to the local all the way up to the federal government has been locking down on these kinds of unethical mortgage dilemmas. They have even started taking peoples licenses away, so that they can never work with loans or anything of that sort. The government has also been prosecuting the people in these situations.