Upside Down Mortgage

Archive for the ‘Predatory Lending’ Category

Predatory Lending Companies

Question: How come the Bush administration will bail out investment banks but not homeowners?

How come Bear Stearns which failed due to incompetent leadership and investment in companies with predator lending practices gets a buyout. But the homeowners who were VICTIMS of these predatory practices get left out in the cold? (literally)
Ezz you are a fool, they arrange a bailout of Bear Stearns in a MATTER of DAYS, yet the have had months to fix the housing crisis and have not lifted a finger.
AND SHOULDN'T you lose your job if you are incompetent? I Bet if my small business failed I wouldn't get a bailout from Bush!
Oh no Mr. the only whatever but predator lending practices is what cause Bear Stearns to fail for sure. It is only a small part of the entire Bush debacle.
Sdrew if you don't think the upper managment of bear sterns is going to get a buyout clause then you are a fool.

Answer: I'm a little confused. How was this "bailout" saving anything? Friday the stock traded at $30.85 and JP Morgan bought the company for $2.00 a share... you don't think the people who had stock in that company lost allot too? I know for people like you everything is Bush's faulty but come on!!

Congress: Protect us from the predatory lending practices of the banks now!

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Predatory Lending Defined

Loans can be defined as a kind of debt. It involves the redistribution of monetary assets over a period of time between the debtor and the creditor. The money that is given to the borrower has to be paid back after a stipulated time period. This money is generally given at a cost which is termed as "interest" on the Loan.

Loan types:

There are generally two broad categories of Loans: Secured Loan and Unsecured Loan. Secured loan refers to the kind of loan wherein the borrower provides some collateral for the amount that he has borrowed. Mortgage loan is an example. Taking such a loan is common when one wants to buy a house.

The institution that lends the money is authorized to take over the property if the loan amount is not refunded. In some cases, the loan is used to buy a vehicle. Auto Loan is the one which is granted against the vehicle to facilitate purchasing a car. There is also the stock hedge loan wherein the stock belonging to the borrower is hedged by the lending institution against loss.

Unsecured Loan refers to loan that do not require the borrower to pledge any asset. These are made available from different financial institutions as personal loan, bank overdrafts, corporate bonds and credit card debt. The interest that is charged on these types of loan differs from one lender to the other. These usually have higher interest rates than the secured Loan as no collateral is offered against these.

There are many different types of loans that are available to the borrowers. These are structured in a way that caters to the different needs of the borrower. There are many lenders in the market. Banks and financial institutions keep using innovative methods to facilitate east borrowing by the customers.

Loans are made available to the borrowers in many formats. The formal lending was introduced by banks but these are not the only entity that is into the lending business today.

There are innumerable lenders which offer customized loans to the borrowers. Many customers prefer taking the help of these entities instead of approaching the banks as these have more relaxed rules. It is important to have a good credit history while applying for a loan. However there are some lenders who grant a loan despite a bad credit history. There are constant innovations in the loan sector so as to service different kinds of customers.

Abuses of Loans:

There are some cases wherein lending is abused. Predatory lending is when personal finance is granted so that the lender can take advantage of the borrower. Usury is another type of abuse wherein a very high rate of interest is charged on the amount that is given to the borrower.

Plus there are also cases wherein the lender abuses the lender by wishing to defraud the creditor or by not repaying the money.

It is always recommended that customers do a thorough research before opting for any types of Loans. A detailed discussion with the lender should also be held so that there are no hidden costs in the Loan that would surprise the borrower in the future.

About the Author:

Liza Mathers currently serves as personal finance editor of a popular UK Personal finance comparison site called Seek4finance.

During her 9 years in journalism, Liza has won a series of award for her personal finance journalism, ranging from awards for campaigning journalism, business scoops, all-round personal finance knowledge and her proven ability to explain personal finance in simple plain English.

In a nutshell, Liza puts the consumer, not the personal finance industry, first.

Article Source: ArticlesBase.com - Finding the Right Type of Loan for You!

Attack of the Overdraft Fees: Logan's Story

Predatory Lending Software

Debt is rising and there seems to be little chance of effectively stopping it from slowing down, never mind about decreasing. And in most cases, consumers have turned toward so-called ‘debt consolidation’ companies, more recently known as ‘debt settlement’ or ‘debt negotiation’ companies. But the truth is that most of these companies exhibit the same predatory characteristics as those who advertised themselves under the banner of ‘debt consolidation’ companies before the spate of bad publicity and legal actions against them. And the simple reason for this is that they are one and the same, having only adjusted their names and supposed ‘affiliations’ as time wore on and more and more people fell into debt.

Getting Deeper Into Debt

A report by the Consumer Federation of America (CFA) indicated that these new ‘lenders’ often drive their clients deeper into debt and reclaim amounts owned by securing collateral, most commonly cars, against these loans. The tragedy of the situation is that there is a fair percentage of individuals who have already faced foreclosures on their homes and subsequently need money to pay off other debts such as credit cards, most of whom apply for these car title loans. More often than not, these loans are for amounts that represent a mere fraction of the car’s worth and have an annual interest rate sometimes of up to 300%. And, to top it all off, title lenders require a duplicate set of keys before they hand over the cash.

This has of course triggered a reaction from bodies such as the CFA, urging states to tighten laws on these predatory title lenders making the practice illegal. But there is still a long way to go as states seem lax about closing those loopholes used by title lenders to exploit those suffering hardships and to reject legislation that would make the trade legal.

Learning from the Past

There is, in retrospect, a moral to be gleamed from the situation, one that will more than likely force consumers and those who lend money to finance their lifestyles and expenditures to re-evaluate their approach to finances. It is often one only learnt from experience which states that debt, regardless of what kind, is not a good thing. But for some that kind of advice might be just a little too late, which means that the best course of action now is on how to differentiate between the good and the bad.

Well, one way is to contact the local consumer protection agency directly as many of these predatory debt consolidation agencies state like affiliations on their advertising material as well as on the Internet. Another authority on the matter is the Better Business Buro (BBB) who’ll be able to advise on legitimate and reduced-risk businesses that offer consumer credit counseling services. These businesses usually operate at a reduced fee and offer free seminars on debt management and budgeting.

About the Author:

Mint is a modern, powerful, easy and secure Web–based solution for
debt management. For your free
money management tool do visit our site.

Source - Predatory Debt Consolidation Companies: Going From Bad to Worse