how Crises initiates change triggers

Change Management- Events that triggered massive change

Fannie Mae and Freddie Mac story-Mortgage and Finance industry - The USA

A notable example  for causing Changes in the way reporting and compliance  are  done is that of 

Fannie Mae, Freddie Mac in the USA. The Federal National Mortgage Association (Fannie Mae) 

and Federal Home Loan Mortgage Corporation (Freddie Mac) are the government-sponsored 

enterprises (GSEs) devoted to housing and hold dominant positions in the U.S. mortgage market. 

They hold over 50%  collective ownership or guarantee  of all outstanding mortgages in the United 

States, including a huge share of subprime mortgages.

The subprime crisis was man-made chaotic   situation created in 2008 that affected the entire 

mortgage industry in  the USA, when home mortgage loans were approved once again by greedy 

financial companies without exercising the basic rule of verifying borrower’s repaying capacity. 

These utterly callous and greedy actions by financial institutions resulted, in huge in foreclosures 

that led to the collapse of many lending institutions and hedge funds.

The financial crisis in the  USA's  mortgage industry also affected the global credit market resulting 

in higher interest rates and reduced availability of credit. The reason can be attributed to only one 

thing “Selfish greed” which neither the law enforcers nor the investigators  could  anticipate.

There is this  power elite theory which claims that single elite, not a multiplicity of competing 

groups, decides the life-and-death issues for a nation as a whole, leaving very trivial and minor 

matters for the middle level and nothing for the unsuspecting common poor people. The power elite 

always disrupt and detest the grossly unequal and unjust distribution of power wherever it finds.

Even people living in a country like India that prides itself of  being world’s largest democracy, 

of free government, and being a country that witnesses the comings and goings of elected 

politicians, finds power elite driving everything. Sociologist  Wright Mills, brought out  the 

interwoven interests of the leaders of the military, corporate, and political elements of society and 

suggests that the ordinary citizen is a relatively powerless subject of manipulation by those entities.

The Crisis created in the mortgage industry is true exhibition of Power elite

... read on