Wells Fargo to pay $3.7B settling charges it wrongfully seized homes and cars

Re:Wells Fargo to pay $3.7B settling charges it wrongfully s... by kmeisthax on Tuesday December 20, 2022 @04:53PM (#34073195)

>When you apply for a mortgage you are informed in advance that it might be sold.

Ok, and where can I go get the mortgages that won't be sold and have comparable financing terms to the ones that do?

Oh wait, those don't exist (or cost way more)? Hmm. I see.

Here's the thing: free markets can only ever hope to work in a world where people have total freedom of association. If I can't take my business elsewhere, then I'm not dealing with a private corporation anymore. I'm dealing with government with extra steps.

Likewise, capitalism and free markets aren't interchangeable terms. Free markets are a system of resource allocation, and capitalism is just private ownership of an enterprise. There's been plenty of examples of brutally repressive regimes which still had private capital ownership, free markets be damned. Because free markets do not actually maximize profits for capitalist owners.

So I think it's fair to blame capitalism, even if there's some government floating around in there, too. Consider them joint-and-severally liable.

[ Parent | on HN ]

Re:Wells Fargo to pay $3.7B settling charges it wrongfully s... by twblalock on Tuesday December 20, 2022 @06:21PM (#34074280)

> Ok, and where can I go get the mortgages that won't be sold and have comparable financing terms to the ones that do?

Why should they exist? If they can't be sold, the lender needs to find some other way to make their money on them. What kind of sane economic system would deliver mortgages like that? Should the government subsidize all mortgages?

[ Parent | on HN ]

Re:Wells Fargo to pay $3.7B settling charges it wrongfully s... by jogjayr on Tuesday December 20, 2022 @07:55PM (#34075279)

I'm not a finance expert. But isn't the lender already making money on the mortgage by charging interest? That's the whole reason they can even sell the mortgage, right? Why would anyone buy a mortgage otherwise? They're purchasing a stream of interest payments, like a bond.

I think that's how mortgages were before the 1970s. The bank lent some money and accepted the payments. They didn't sell the mortgage to anyone.

Selling and securitizing mortgages is how 2008 happened. Maybe the old system was better in that way. Again I'm not an expert, so I don't know the side-effects of doing that.

[ Parent | on HN ]