Final answer:
A salesperson should inform the seller if a buyer mentions bankruptcy and the inability to afford a mortgage due to ethical standards and potential fiduciary duties, which the financial crisis underscored by highlighting the consequences of non-disclosure and poor vetting practices.
Step-by-step explanation:
Regarding the question of whether a salesperson should tell the seller/client if a buyer/customer says they are going bankrupt and cannot afford the mortgage, this situation reflects a moral and ethical dilemma within business transactions, specifically in real estate and finance. In real estate transactions, honesty and transparency are crucial, and the salesperson should maintain ethical standards, which likely include disclosing material facts that could affect the seller's decision-making. The salesperson is often obligated to inform the seller, especially if they have a fiduciary duty to do so. However, it also depends on legal obligations and the rules of the specific jurisdiction in which the transaction is occurring.
The information provided references the 2008-2009 financial crisis, where the practice of securitization led to the proliferation of subprime and NINJA loans. These risky practices occurred because banks did not have a vested interest in the borrower's ability to repay the loan due to securitization, which bundled loans and sold them as securities to investors. The subsequent collapse of the housing market and the difficulty faced by borrowers underline the consequences of inadequate scrutiny in the loan-making process and the importance of full disclosure in financial transactions.
Showing the relevance to the question asked, we see that transparency is a key aspect of building trust in any financial engagement, and this lesson applies to both institutional lending practices and individual transactions between buyers, sellers, and intermediaries like salespeople.