Coco and Delany Borrow $110,000 from Employees Credit Union to Buy

question 53

Essay

Coco and Delany borrow $110,000 from Employees Credit Union to buy a home. The loan is a fixed-rate mortgage at 3.38 percent with a thirty-year term, subject to an acceleration clause, and secured by the home. When the borrowers have paid off $10,000 of the mortgage-still owing $100,000, plus interest-they stop making payments. Meanwhile, the home's market value declines to $85,000. After six months, the lender decides to take steps to recover the unpaid amount of the loan. What are the lender's options? Which option seems most likely? Why? What steps are involved?

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Definitions:

Affirmative Action

Policies or measures aimed at increasing the representation of minorities and women in areas of employment, education, and business from which they have been historically excluded.

Reverse Discrimination

Discrimination against members of a dominant or majority group, often as an attempt to correct historical injustices.

Occupational Stress

The stress experienced as a result of job-related pressures and challenges which can affect performance and well-being.

Robert Karasek

A social psychologist best known for his work on job strain and the demand-control model, which discusses the effects of occupational stress on health.