My Ethical Dilemma Of A Loan Officer Should Offer A Family...

To begin, my ethical dilemma deals with the notion of whether a loan officer should offer a family/individual a mortgage for a home or not even though they are on the borderline criteria and possibility of default based on known circumstances such as low income or even a credit score that is a few points lower than the required score to obtain a loan. This whole idea correlates to the mortgage crisis of 2007 when the growth of housing prices stalled and demand slowed. As a result, lenders accepted loans when they knew that a high degree of risk and insolvency was probable. Eventually, banks became bankrupt and the government established stimulus programs aimed at reducing the problem. Unfortunately, this did more harm than anything as†¦show more content†¦For an employee to be aware in this situation, a good concept to note would be how other loans similar to the one they are offering have performed in the past. The officer could analyze each one and determine the right path they might have chosen based on the criteria. As a result, they have more knowledge of what may and what may not happen. The officers have to be morally aware of the consequences even though they want to help these people out and provide them with a possible good future. Another way the employees can be morally aware in this position is to know the client from top to bottom. This means that they should have extensive knowledge about the client primarily in terms of finances, but other attributes as well such as their character. For instance, if they have had a loan in the past, have they paid the loan back or not along with say what their income is. Correspondingly, the loan officer needs to be mindful of the financial stability of the bank along with current government regulations. For the bank to help the employees, they could give out monthly reports on the bank’s finances. However though, the officers in most banks are recommended to stay up to date on government regulat ions, but a word document/pdf of all the regulations would be a