Predatory Practices in financial borrowing and lending contracts Research Paper

raiding Practices in financial borrowing and add contracts - Research Paper ExamplePredatory Practices in financial borrowing and l poleing contractsThe following argon most of the characteristics of predacious practices in notes lending. First, those targeted are chiefly the low income people and the elderly in society. Second, the imparts costs and marchess often qualify at the closing and differ greatly from what they were at the beginning or what was agreed. Predatory practices are likewise often accompanied by aggressive sale approaches. There are also repeated re-financing options aft(prenominal) a short time lapse so that lenders end up collecting addition stipend or penalties, consequently denying borrowers such as home owners the equities from their security. Notably, in most of raiding lending practices, the lending is not often in line with the borrowers capacity to repay since the lenders warmheartedness 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 change 4). That is, there is always quite a lot of misunderstanding about the nature of loan and the heart and soul to be repaid since such transactions has high 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 raw loan terms. Due to the harmful effects of such loans to society, the authorities has numerous remedies in form of laws and regulations. These remedies include the Equal Credit Opportunity Act (ECOA), the Real realm Settlement Procedures Act (RESPA), the Home Ownership and Equity Protection Act (HOEPA), and the Truth in loaning Act (TILA). Others are the Fair Housing Act, and the Federal Trade Commission Act, and Special State Anti-predatory alter Statutes, in State Unfair and Decepti ve Trade Practices 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 below the belt but also fraudulent and deceptive. In other terms, predatory lending entails the imposition of abusive and unfair terms on loans for borrowers. In fact, the phrase predatory lending generally refers to many specific embezzled activities in the loan sector. Nonetheless, different 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 place post loan origination. An example of a predatory practice is tha t of a lender 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 done 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