The Value of Subprime Mortgage Essay Example | Topics and Well Written Essays - 3750 words

The Value of Subprime Mortgage - Essay Example ot address prime mortgages, prime mortgages â€Å"are typically made to borrowers who have a strong credit history and can demonstrate a capacity to repay their loans...†2 On the other hand the term â€Å"subprime† is generally classified as mortgages or loans made to borrowers with an undesirable or elevated credit history or loan to borrowers with desirable credit history that â€Å"exceeded the property value†3 In such a case the borrower is typically charged with a higher interest rate and â€Å"up-front and continuing cost†4 in order to balance the risk associated with the likelihood of delinquencies or even foreclosure.5 In the article Prime Mortgages -Think Twice the writer, Michael Challiner points out that the subprime market accounts for over 4000 types of subprime mortgages. Furthermore, Challiener emphasized that the subprime â€Å"mortgages are extremely complex, higher fees tend to be charges, the amount lent compared to the value is likely to be lower and the interest higher than in the rest of the mortgage market.†6 The rapid growth of subprime mortgage loans began in the late 1990s.7 The growth was a result of the three pieces of federal regulations. First in 1980, Congress enacted the â€Å"Depository Institutions Deregulation and Monetary Control Act (DIDMCA) of 1980" under Title V which preempted the interest rate cap.8 Two years later in 1982 the Alternative Mortgage Transaction Parity Act (AMTPA) was enacted which provided for flexibility in the use of â€Å"interest rates and balloon payments.†9 By 1986 another law emerged this time the Tax Reform Act (TRA) which â€Å"prohibited the deduction of interest on consumer loans, yet allowed interests on mortgages for a primary residence as well as one additional home.†10 As such, the late 1990s regulations show the emergence of the subprime market into the â€Å"wider capital markets as it rapidly secured a place in both the home purchase and home equity mortgage market.†11 This paper examines the

Forum APA Essay Example | Topics and Well Written Essays - 500 words

Forum APA - Essay Example In academic writing, it is critical to understand the type of sources that are allowed for use. Books are one of the academic sources of information in writing. These sources may be accessed from the library or from online libraries. The other authentic source of information when researching for academic writing are journals and peer reviewed articles that are also available from libraries and online (Jager and Bak, 2003). Students may also use reports from governments and different organizations as the source of information when writing. Published theses are also used as authentic sources in writing (Adams and Forsyth, 2006). Lastly, a student is allowed to use some online materials when researching. Despite the numerous numbers of sources that a student can use, one is warned against using some online sources such as Wikipedia, blogs and websites ending with â€Å".com†. Whenever a student uses any source, one is required to cite it accordingly within the text and provide a list of references after the work is completed (Adams and Forsyth, 2006). Citing of references may be carried out based on different referencing styles. The most common referencing styles are American Psychologist Association (APA), Modern Language Association (MLA), Harvard, Chicago and Oxford. References are cited in any research work to avoid cases of plagiarism and to give tribute to the source of any idea (Jager and Bak, 2003). One of the reasons for the use of quality reference in writing is to assure that the student accesses authentic information. In the sources such as Wikipedia and blogs, the information contained may be changed by different people. This makes such information untrustworthy and incredible for use. However, quality sources contain accurate facts that have been tested through research and over a long period (Jager and Bak, 2003). Quality sources are also important as they provide