Mortgage Brokers Often Did Not Make a Strong Effort to Evaluate

question 9

Multiple Choice

Mortgage brokers often did not make a strong effort to evaluate whether the borrower could pay off the loan. This created a

• A) severe adverse selection problem.
• B) decline in mortgage applications.
• C) call to deregulate the industry.
• D) decrease in the demand for houses.

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Definitions:

Rights Theory

A framework or theory in philosophy that focuses on the foundational importance of rights (legal, moral, or natural) in understanding ethical, legal, and social issues.

Human Rights

The basic rights and freedoms that all individuals are entitled to, regardless of nationality, sex, national or ethnic origin, race, religion, language, or other status.

Sarbanes-Oxley Act

A law enacted in 2002 aimed at improving corporate governance and preventing corporate fraud through stringent accounting and auditing regulations.

Corporate Wrongdoers

Companies or their representatives who have engaged in illegal, unethical, or improper conduct.