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Lincoln savings and loan

Lincoln savings and loan - overpricing on the individual...

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In class, we watched a video called “Other People’s Money” from “Frontline.” This video was about Charles Keating Jr.’s company, “Lincoln Savings and Loans.” The failure of “Lincoln Savings and Loans” was one of the costliest savings and loans failures in the United States, costing over 2.5 billion dollars in investor’s dollars. From the start of the company, those selling savings bonds targeted the elderly. By the fall of the company, those who invested in the company lost most of their life savings. He later invested in a mortgage company. Also, during this scandal, five US senators were involved, Alan Cranston, Dennis DeConcini, John Glenn, John McCain and Donald Riegle, and were thought to have connections with Keating. Over 300 million dollars went into building the Phoenician Hotel, that came from taxpayers and those who invested in Keating’s company. The hotel went downhill, due to
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Unformatted text preview: overpricing on the individual rooms. During the building of the hotel, many other Keating Mansions were bought, using money from the company. Keating was eventually convicted of fraud. This movie related to what is going on today in the United States, with the number of foreclosures on houses. Where I live in Illinois, there are hundreds of foreclosures, due to the slump in today’s economy. Early in 2006 when the economy was flourishing, market rates drastically lower, making houses affordable for the average family. With the decline in the economy and also because of inflation, families cannot afford to keep up with their mortgage rates, which is leading to hundreds of foreclosures this year. Through driving through once family filled neighborhoods, change is happening, and instead of looking at children playing their front yards all I see is a lone for sale sign sitting in corner of the yard....
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