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Old February 9th, 2012, 07:06 PM   #1
myp
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Banks settle with government to give $25 billion towards homeowner assistance

Five banks have settled with the Federal government in a case with the government over fraudulent foreclosure policies and other mortgage policies.

source: http://www.reuters.com/article/2012/...81600F20120210

Thoughts?
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Old February 10th, 2012, 02:34 AM   #2
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Well for the homeowners it's good in a short period of time. Bad for the US economy in a long period of time. I believe this is just repeating the evil cycle that the US ended up in, in the first place, which is that US banks gave out massive loans to regular people who eventually were not able to pay it back. I believe what will happen, since people are still suffering from clear financial difficulties in the US, is that they're going to take this opportunity to take advantage of the US government's law here and eventually, again, the banks will suffer.
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Old February 10th, 2012, 01:24 PM   #3
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Quote:
Originally Posted by myp View Post
Five banks have settled with the Federal government in a case with the government over fraudulent foreclosure policies and other mortgage policies.

source: http://www.reuters.com/article/2012/...81600F20120210

Thoughts?
Very likely motivated by self interest. Its rare that a bank actually seeks to do something good and worthwhile in society, and on the rare occasions when they do, they use that in their marketing hype (hence, it not really being done for the right reasons - but still better than nothing).

Banking is a bit of a strange animal in that, for mortgages anyway, the risk to the bank of losing money lent is very, very low. They keep the house as security. Therefore, it is very arguable about what the rate of interest should be, as it is often quite high in comparison to the bank's risk.

Basically, banks equal evil corporations. People should learn to live within their means, and to avoid banks.
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Old February 12th, 2012, 08:33 PM   #4
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Quote:
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Very likely motivated by self interest. Its rare that a bank actually seeks to do something good and worthwhile in society, and on the rare occasions when they do, they use that in their marketing hype (hence, it not really being done for the right reasons - but still better than nothing).
What institution or people aren't motivated by self interest? The real goal of public policy should be in trying to ensure that the self interest falls in line with societal interest.

Quote:
Originally Posted by Calvin View Post
Banking is a bit of a strange animal in that, for mortgages anyway, the risk to the bank of losing money lent is very, very low. They keep the house as security. Therefore, it is very arguable about what the rate of interest should be, as it is often quite high in comparison to the bank's risk.
Of course not. This crisis shows why. Sure they got a bunch of houses back, but they are very undervalued and now they are stuck with maintenance costs if they even decide to maintain them (if they are sellable).

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Originally Posted by Calvin View Post
Basically, banks equal evil corporations. People should learn to live within their means, and to avoid banks.
I think you are severely understating the good that banking and credit has done for the world economy. Banking is not inherently bad. We just had morally hazardous policies that led to everything "blowing up".
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