Ethics of Sub-Prime Lending
Introduction As a topic for this research paper, I decided to analyze the ethics behind the recent mortgage crisis in the United States. Banks were approving people for loans very easily, to people they knew would not be able to pay them back. Thus, many people were buying homes, missing payments, getting foreclosed on, and ruining what credit they had. Throughout this paper I intend to show how the practices that the banks were using were unethical. I will show who stakeholders were, and analyze them through Utilitarian and Kantian standpoints. A Utilitarian standpoint weighs the hedons and dolors in a situation. Ultimately it says that the most ethical thing to do is whatever is for the greater good. The hedons are people that are positively impacted from a situation, while the dolors are the people that are negatively impacted from a situation. Determining if a situation is ethical or not is decided by assessing the impact on hedons and subtracting them by the impact dolors. According to a Utilitarian standpoint, if the impact to the hedons outweigh that of the dolors, then said practice is ethical. A Kantian standpoint does not look into consequences like the Utilitarian standpoint; instead it looks at categorical imperatives. According to founder Immanuel Kant, “the rightness or wrongness of actions does not depend on their consequences but on whether they fulfill their duty.” A Kantian belief is not based solely on what is for the greater good, but if something is seen as right or wrong to do. A good person is good because of the intentions that they have, whether enjoyable or not.
Background of U.S. mortgage crisis The mortgage crisis in the United States over the past few years has been a very traumatic experience for many people. During the mortgage crisis, many lenders were not following the normal government guidelines for issuing mortgages. These include