A recent major decision that was made in the United States Assignment

A recent major decision that was made in the join States - Assignment ExampleOne of the surmisals was by the management of financial, mortgage and insurance institutions that the legitimate state prices would come on rising. According to Bianco (2008), after a decade long of continuous rise in property prices, loaning institutions assumed that this would go on and disregarded the long known real estate price cycles. As a result, they continued impart to willing consumers majority of who are oblivious of such real estate price patterns. It is difficult to conceive how real estate and financial experts failed to project the burst in real estate prices, instead relaxing their lending requirements to take advantage of the price boom. Insurance institutions also bought into this assumption and thus insured such unsustainable investments.The second assumption is on the part of the government driven by free market assumptions that competition and market forces would result in self-reg ulation, the government watched along as standards were relaxed in fierce competition to sell mortgages (Akif, 2011). The government failed in providing oversight and regulation which would have resulted in the lending institutions acting ethically and following sound financial projections.A number of explanations have been provided as to wherefore the much experienced financial experts, who had witnessed real estate price cycles before, would assume the prices would not fall on this occasion. Bianco (2008) argues that unscrupulous and unethical behavior from financial institutions was behind the assumption. This is supported by the view that financial institutions loosened their standards, offering high risk and fraudulent mortgages. The author provides evidence of this by citing the statistics that fraud in mortgages had change magnitude by 1411% between 1997 and 2005. On the part of the government, Akif (2011) ponders whether the assumptions were a result of nave optimism that social utility would come self