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Unformatted text preview: and values fell even more.
Questions for Discussion
1. The banks may have been acting legally in granting mortgages to people who could not afford
them, but do you think they were acting ethically? Were the borrowers acting ethically in buying houses out of their realistic price range? Who should have the responsibility of determining whether the loans should be made in such a situation?
2. The mortgage crisis had a draining effect on the entire U.S. economy. As a result, some people
called for more regulation of the industry. Some said the government should let the market
correct itself. Which side do you agree with?
3. Suppose you have been appointed a special judge in County X, with the power to resolve
delinquent mortgage situations. Is there anyone whose interest you need to take into account,
other than the bank and the home buyer? Should you be concerned with the interest of the
community as a whole? The banking industry? The American economy?
4. Assume you are still a judge. How would you choose among different options for a specific
situation? For example, you could order foreclosure or that the bank adjust the payment rate.
What factors will you consider in making your decision? rog80328_04_c04_062-088.indd 84 10/26/12 5:42 PM CHAPTER 4 Section 4.5 Chapter Summary Case Study: Hamer v. Sidway
124 N.Y. 538, 27 N.E. 256, LEXIS 1396 (N.Y. Court of Appeals 1891)
Facts: Mr. Story was concerned about his 15-year-old nephew’s lifestyle. The uncle promises the
nephew that if he will refrain from drinking liquor, using tobacco, swearing, and playing cards or billiards for money until his twenty-first birthday, the uncle will pay him $5,000. (At that time, all these
activities were actually legal for boys of this age. New York must have been a wild and crazy place!) The
nephew agrees, and adopts the wholesome lifestyle he has promised his uncle.
There is no dispute that the nephew fulfilled his promise. When he turns twenty-one, the uncle agrees
that the nephew has perform...
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This test prep was uploaded on 04/09/2014 for the course BUS 311 taught by Professor Parker during the Spring '10 term at Ashford University.
- Spring '10
- Business Law