Cash back at closing has been around for many years. One reason that it is popular among some people is because almost no one minds ripping off banks. The banking industry for the most part is one of the biggest rip-off industries existing in this country. If you loan money at 18% to people, and if you borrow money at 3% from people, it seems that if you get ripped off, you probably deserve it. Banks lend and borrow money in that manner as a matter of practice, so there are very few people who will either sympathize or empathize with banks.
Have you ever noticed how easy it is to deposit your money into a bank? Try getting it out. You may have to stand in a line for an hour, because the banks want to save their money so they hire as little help as they can get away with. Everyone knows this, and just about everyone has experienced it at some point.
Banks also charge very high fees if a check is bounced, inadvertantly or not. For example, a person may deposit a check in the bank, and write a check to someone. The banks want to collect interest for free, so they put a hold on the check you deposited until they clear the funds, and collect interest on your money in the meantime. If the check that you wrote to someone is deposited or cashed, and reaches your bank before the check that you deposited is cleared, you will receive a penalty of $30 or more as a processing fee charged to your account.
Now that the banking industry has suffered a blow, because of all of the defaulted home loans, they want the government to bail them out. That means you and me. They want the American people help them recover their losses. It is our money that supports the government, after all. Is that how you want to spend your money?