In: Economics
Solution -
predatory lending practices
There is some disagreement about the practice of deadly debt, but
many actions such as disclosing or disclosing wrong information,
risk-based pricing and increased fees and fees are mentioned. There
are other violent methods like loan packing, loan flipping,
asset-based loans and reverse redlining.
Insufficient or incorrect disclosure
The borrower conceals or misrepresents the true cost, risk and / or
the eligibility of the terms of the loan, or the loan amount
changes the terms of the loan after the initial offer.
Risk-based Price
All borrower relies on some types of risk-based costs - interest
rates on credit history - violent borrowers resort to higher
interest rates to study by resorting to high rates of interest
which are usually defaults.
Increased fees
Charges and expenditure (eg valuation, closing costs, document
preparation fees) are more than the amount charged by reputable
borrowers and often hidden in great print.
Loan packing
Unnecessary products like credit insurance - which repay loans at
the death of home buyers - are included in the cost of the
loan.
Loan flipping
The loan interest rate loan encourages a large amount of
refinancing with higher interest rates and additional charges.