Credit-rating agencies played in global financial? crisis

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Reference no: EM131393660

Prior to? 2008, mortgage lenders required a house inspection to assess its? value, and often used the same one or two inspection companies in the same geographical market. Following the collapse of the housing market in? 2008, mortgage lenders required a house? inspection, but this was arranged through a third party. How does this illustrate a conflict of interest similar to the role that? credit-rating agencies played in the global financial? crisis?

A- Inspection companies may have provided overly optimistic assessments of home values to ensure continued work in the future.

B- This situation does not illustrate any conflict of? interest, as the services provided by? credit-ratings agencies and home inspection companies are unrelated.

C- Fees for home inspections may have been unreasonably high to ensure high profits for the inspection company.

D- Mortgage lenders may have wanted to increase home sales without assuming the additional costs to add more inspection companies.

Reference no: EM131393660

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