Current Ethical Issues Article Search
Karrah Marcoff
XMGT/216
5/20/2015
Patricia Hainey

Current Ethical Issues Article Search McBride Financial Services offers conventional FHA, and VA loans for home purchasing and refinancing. Their mission is to become the leading provider of low cost mortgage services by using state of the art technology. McBride Financial Services specializes in first time homebuyers as well as problem credit clients. Upon approved credit the customers will receive a credit report, mortgage, inspection, and appraisal. By using technology to minimize cost and increase efficiency, these services are offered for a fixed price of $1,500. A crucial factor in McBride Financial Services success relies on an easy to use website that can securely retain all of our clients’ personal information. The company will net profits strictly by controlling the costs of the expenses of the company. The main office with have three head brokers as well as two administrative assistants who will take care of all the administrative work from each branch. At each branch you will have between two and three brokers and one full time receptionist who will work during business hours. The administrative assistants will work on salary, the receptionists on hourly and the brokers will work on commission. The web based layout should minimize our need for employees in each location and allotting more funds to be dedicated to the technology and efficiency of the program. Companies that specialize in low cost mortgages and loans are nothing new to the market. Companies similar to McBride Financial are responsible for a large part in the Global Financial Crisis. The housing market had been rapidly rising and finally reached its peak in 2004. This was triggered by the easy availability of credit which lead to debt-financed consumer spending. The banks lent out more money than they could afford to cover if too many people default on their loans. Fannie Mae was one of the companies that set a standard of risky financial decisions as the norm. They sold their montages based on the theory that housing prices would continue to escalate, which they would not. The U.S. Senates Levin-Colburn Report concluded that the Global Financial Crisis was the result of “high risk complex financial products: undisclosed conflicts of interest; the failure of regulators, the credit rating agencies, and the market itself to rein in the excess of Wall Street.” (Senate) Unfortunately Fannie Mae did not attempt to fix this dilemma and choose to look the other way and do whatever it would take to make money. As a result, the housing bubble burst and the U.S. government was needed to bail Fannie Mae out of their financial crisis while the former homeowners were left holding the bag. At McBride Financial, the mistakes that were made by Fannie Mae can be used to help to prevent those ethical dilemmas from disrupting the company. The brokers at Fannie Mae felt pressured by their superiors to reach aggressively high numbers and to pump out as many mortgages as they were able to. They benefitted from this by receiving large commissioned checks that depending on them reaching these outlandish goals. Any time that a job is based on commission there is a