What role did the Accounting profession play in the recent sub prime mortgage crisis? What could they have done differently?

What is a subprime loan? Subprime loans are unconventional loans designed to put as many people as possible in a home or to refinance an existing home regardless of the borrowers’ credit history. A subprime loan allows lenders to make loans whether or not the borrower has poor credit, no credit or even a very low Fair Isaac Corporation (FICO) score. Basically, subprime loans are creative ways to convenience someone that they can afford more than they should.

Listed below are just some examples of subprime loans.
1. Fixed Rate Mortgage (FRM). A FRM has a fixed rate mortgage but the borrower usually has a much higher interest rate than a person with good credit.
2. Adjustable Rate Mortgages (ARM). As the interest rate varies, so does a borrowers monthly payment.
3. Hybrid ARM. This is typically a FRM for x number of years at a fixed rate, and then......

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Title: Subprime Mortgage Crisis
Approximate Word Count: 987
Approximate Pages: 4 (250 words per double-spaced page)

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