How many times do we have to read this same story? Telling someone that they have to stop paying to access a federal program, encouraging them to believe that they are going to get a loan modification, when your bank has already decided that no one is going to get this kind of deal, and then foreclosing on them when they fall for the bait – is this they way banks are supposed to make money?
What is the business ethics here? The bank should be telling its customers the truth, not a set of lies. I don’t think that requires much analysis.
Banks are a utility in the United States. That is, they have government protection in return for the bank following a set of rules. That’s why your accounts are insured and banks are supposed to be accountable. Because in a real sense a bank is public institution, it has privileges in the law to protect and profit it. How much less incentive should this kind of institution have than private companies from misleading and cheating its clients out of their homes?
Since, I wrote this article my own students have come forward with the same story of being told to miss payments by the bank and then being foreclosed on. There is great and calculated cruelty in these acts.