Source: Business Week Online November 13, 2008
Authors: Mara Der Hovanesian
Concept: Corruption, business practices, whistleblowing
Brief Synopsis: In light of the failures of the mortgage industry, recent corrupt practices have come to the surface. This article discusses how mortgage wholesalers would trade sex and sexual favors to get more loans, or get subpar loan applications approved. People in the industry were also said to have fixed loan applications by creating false information, inflating people's actual incomes, and creating job descriptions that heightened loan approval. One woman says that she would deny subprime loans that seemed suspicious, but would be overridden by her superiors. As a result, she was denied her bonus and was given more work on religious Holidays-she is very religious. Not only that, but whistleblowers also felt the same reprecussions and saw lower commission checks.
My Thoughts: One would think after the Enron scandal that major companies would learn a lesson. However, as they say, History has a way of repeating itself, and this can definitely be seen with the mortgage failures. I just find it hard to believe that all this corruption and bribery was going on and not one person was able to speak up and let this out. There are laws protecting whistleblowers. Basically, the people who said they weren't participating in the corruption are just as much to blame as those who were. However, after learning about all this, it makes me think none of these companies should be bailed out.
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