Lesson #7, Assignment #2 - Read the 'Business...

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Read the 'Business Problem-Solving Case' on pages 364-366 of your text, entitled "HSBC's Mortgage Lending Decisions: What Went Wrong?" and address the case questions in an essay of 500-600 total words: 1. What problem did HSBC face in this case? What people, technology, and organization factors were responsible for the problem? Did HSBC management correctly identify the problem? The main problem is that, more sub-prime mortgages holders defaulted than expected. As mortgage holders defaulted, the people they owed money to had to write off lots of debt to HSBC, who had a sub-prime mortgage unit Decision One Mortgage. They lost in the region of $945m and February 2007 they made their first ever profits warning. HSBC Holdings PLC was responsible for the problem. Yes the management was correctly identified the problem, but it was too late for them. 2. HSBC had sophisticated information systems and analytical tools for predicting the risk presented by subprime mortgage applicants. Why did HSBC still run into trouble? If HSBC had a solution to the problem all along, why was the right solution not used? Though HSBC had a sophisticated information systems and analytical tool for predicting the risk
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This note was uploaded on 04/29/2011 for the course INFORMATIO MIS taught by Professor Daniel during the Spring '11 term at Antelope Valley College.

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Lesson #7, Assignment #2 - Read the 'Business...

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