ABSTRACT:

Practically everyone residing in US are aware of the present Mortgage Crisis and its impact on their day-to-day life. Whilst some experts debate on how the issue got made, there had been some Senators and US President actively involved in resolving this crisis in the earliest. If we take into account solving a problem as a Project, then the majority of the principles of Project Management as mention in PMBOK are to become regarded as. Understanding more in detail concerning the problem and its impact on the Society reveals the important players. Gathering right details regarding the trouble that these players are facing is practically nothing but gathering specifications in the End-Users. These requirements now play a important part in acquiring this dilemma resolved.

About the Problem:

Mortgage Loans are offered normally to people that have good earnings levels or make a reasonable down-payment or possess a very good credit history for repaying their loan amounts within a timely manner or folks who have good employment status. These restrictions have been enforced inside the marketplace to the extent feasible. As an exception, couple of lenders supplied particular loans to people who do not qualify these stringent requirements. These lenders would be the Sub-Prime Lenders. They offered a loan strategy that makes the borrower to spend little amount during the incentive period. One particular with the primary suggestions will be to give the borrower an opportunity to correct their Credit Worthiness to ensure that classic loans will probably be available for them just before the expiry with the incentive period. Regrettably this opportunity supplied by the Industry and Regulators were misused which lead to rise in these loans drastically. To sustain their niche within the Marketplace, lenders over-looked many of the standard principles of lending[1]. Federal government reduced the interest-rates in the course of 2001 and 2003 to increase the economy. Once the Federal Reserve started to raise their interest-rates, hypothetically the mortgage lending rates are to be enhanced proportionately. In contrast, the mortgage lending rates remained identical or additional lowered in some cases[2]. Once the housing bubble busted, absolutely everyone realized how deep they were in this mess.

With numerous Foreclosures within the housing market, the Federal Government and some Senators came forward with certain legislative bills as a resolution. Foreclosure Prevention Act 2008[3] sponsored by Senator John Kerry, House Mortgage and Equity Savings (Properties) Act[4] by Senator Arlen Specter are some to become talked about. The Administration reached out an agreement with all the sector to freeze interest-rates for certain sub prime mortgages for 5 years [5]. Even a bill got passed within the Senate to assist enterprises with Tax-Breaks [6].

RESOLVING THE Challenge:

Step 1: -- Gathering the Needs

Together with the assumption that solving a problem is really a Project of its personal, then the first step is to recognize the problem in detail. This can be practically nothing but gathering specifications from the End-Users. Incomplete Needs and Lack of User Involvement ranks the top causes for IT Project Failures as per the Chaos Report, 1999.

For this Sub-Prime Mortgage Crisis, the important players for gathering the specifications are:

a) Borrowers

b) Lenders

c) Mortgage Brokers

d) Legal Advisors

e) Federal Regulators

f) Federal Reserve

g) US Senate/House Members

h) US President & its Administration

Step two: -- Defining the Scope with the Project & Developing a Strategy

After the requirements are clear the next step is to define the Scope. Project Scope is the core for the success from the project. As explained in PMBOK[7], in the course of this phase all the work required is included, and a clear and precise definition of what the project is supposed to accomplish.

Under these assumptions, the Project Scope would be to help the borrowers to avoid from being homeless and in the identical time assist the lenders to get their money repaid in the best achievable level. There is often a fine thin line drawn between these two tasks. Like every Project, this one too has specific risks associated with the task accomplishments.

The Project Scope Statement can be a Legislative Bill for debate in Senate or Hill.

This Project Scope Statement should include:

• Project Objectives: This include the total amount that the Feds are willing to assist, the process and procedures that are being used to distribute the amounts and the auditing methods used to avoid any sort of mismanagement that might cause fraud.

• Project Deliverables: A detailed description of how the needy borrowers/lenders are getting the support in the Federal Reserve. The deliverables may include things such as data about how a lot of low-income & middle-income families are bailing out, data about the losses that lenders are facing due to this crisis, data about the ripple effects inside the Nation's economy etc.

• Project Organization: At this point, Feds need to decide who is going to be the prime responsible person for implementing this Project. The members of this Project Team will be the Officials from Federal Reserve and the Stakeholders being the Mortgage Lenders/Borrowers.

• Project Milestones: At this point, the Feds identify the Milestones in the course of the Project Lifecycle. At the end of every milestone, the Project Manager or the Prime Responsible Federal Official has to validate the status of the Project and take necessary steps (if required) to correct any distractions/diversions inside the project path.

• Project Cost Estimation: When defining the deliverables, the total cost from the project estimated or calculated must be identified.

• Creating Work-Breakdown Structure: This is the crucial part of this Project Phase. Identifying the important players and preparing the WBS will support the Feds to explain how the crisis will be handled at various levels.

• Project Assumptions and Constraints: Whilst presenting the Bill, the authors must produce the assumptions that they had and the Constraints that they can visualize.



Step 3: -- Executing the Project Program

Together with the cooperation of the required Stake-holders, Federal Reserve can start implementing the Project as follows:

1. Identify all the Applicants who are in the brim on the Mortgage Crisis. The Lenders for these Applicants are further summarized. The finalist contains the list of Lenders and the total amounts that the Federal Reserve is going to reimburse. A secondary list provides the list of all Applicants and their respective details and the mortgage assistance amount.

two. After the Federal Reserve repays the appropriate amount for respective lenders, it can be assumed that the first Milestone is achieved. Ahead of initiating the Second Milestone, respective Federal Officials can audit the process followed. A Change Management within the Execution Process can be initiated if required.

Repeating the above two steps until all identified applicants were assisted results inside the completion on the execution phase.

Step four: -- Handling the Project Risks

Like every other Project, there are certain risks involved through in this Project too.

The primary risks involved in the course of planning phase are: • Data Source: The Source that the Feds used to identify the applicants who would be the prime targets of this crisis.• Data Integrity: The integrity on the data that is supplied by the Source.• Data Analyzing: Working with the data accessible, analyzing it to identify whether the applicant falls in Present Milestone Category or the next is one particular on the crucial risk which requires appropriate procedures. .

Throughout the execution phase, appropriate protocols are required in order that the applicant don't sell the house while the Feds are inside the process of repaying the appropriate assistance to the applicant's lender. Overlooking this scenario may lead to improper distribution on the financial assistance and may hamper the deserved applicant's chances for the duration of the next milestone.

Step five: -- Performing the Project Closure

When all the eligible applicants received appropriate Mortgage aid and the lenders accounts were audited, the Project can be officially defined for CLOSURE.

Step six: -- Identifying the Lessons learnt

Every Project goes through certain hurdles in the course of its life-cycle. It's the ability from the Project Team to overcome these hurdles, focusing on the Project's Final Output, keeps the Project moving forward. After the dust gets settled, the team can then get together and identify all the hurdles that they came across and how they could tackle it. It's the responsibility of your Senior Management to summarize these and distribute for the Middle & Junior Management as Lessons Learned through the Project's Life Cycle.

CONCLUSION:

Treating the issue of Sub-Prime Mortgage Crisis as a Project tends to make it much transparent and easy to manage.