Predatory Practices in financial borrowing and lending contracts Research Paper

marauding Practices in financial borrowing and add contracts - Research account ExamplePredatory Practices in financial borrowing and lending contractsThe fol show eoning are some of the characteristics of ravening practices in money lending. First, those targeted are chiefly the low income people and the elderly in society. Second, the loans costs and terms often change at the closing and differ greatly from what they were at the beginning or what was agreed. Predatory practices are also often accompanied by hostile sale approaches. There are also repeated re-financing options after a short time lapse so that lenders end up collecting addition fee or penalties, consequently denying borrowers such as home owners the equities from their security. Notably, in most of predatory lending practices, the lending is not often in line with the borrowers capacity to repay since the lenders center of attention is often the foreclosure. In addition, the vulnerable borrower is always unaware of the underlying truths of the truth, terms, conditions, and consequences of the deal (Predatory Lending 4). That is, there is always quite a lot of misunderstanding ab off the personality of loan and the amount to be repaid since such transactions has extravagantly but hidden fees that could be hidden from the borrowers eyes. The borrowers are often tricked by the aggressive sales. Most affected in this regard are uninformed groups, which end up borrowing under unfair loan terms. Due to the harmful make of such loans to society, the government has numerous remedies in form of laws and regulations. These remedies include the Equal Credit Opportunity Act (ECOA), the Real Estate Settlement Procedures Act (RESPA), the legal residence Ownership and Equity Protection Act (HOEPA), and the Truth in Lending Act (TILA). Others are the Fair Housing Act, and the Federal Trade Commission Act, and particular(a) State Anti-predatory Lending Statutes, in State Unfair and Deceptive Trade Pra ctices Acts, and common law fraud and unconscionability. This paper explores some of the predatory practices in lending, pointing out and explaining the parties responsibilities. Predatory Practices Predatory lending practices are not only unfair but also fraudulent and deceptive. In other terms, predatory lending entails the craft of opprobrious and unfair terms on loans for borrowers. In fact, the phrase predatory lending generally refers to many specific illegal activities in the loan sector. Nonetheless, contrasting states have various laws against each specific type of illegal loan activity. Notice should be taken about the distinction between predatory lending and predatory mortgage servicing. The latter refers to the deceptive, fraudulent, and unjust practices of lenders and servicing agents in loan or mortgage servicing processes. Unlike predatory lending, this latter activity takes nursing home post loan origination. An example of a predatory practice is that of a lende r deceptively convincing a potential borrower to accept an unfair and abusive loan term (Nasiripour 122). Second, a lender may methodically breach the terms so that the borrower finds it hard to defend against it (Aleo and Svirsky 119). These predatory practices may be make through certain types ofcredit cards, largelysubprime, payday loans, and overdraft loans. In all these cases, the lender may set the interest rates at considerably and unreasonably high levels. Mostly targeted by predatory loan lenders are borrowers with some collateral to back their loan requests. This collateral could be a car or a house, which the