Predatory Lending

Predatory lending is not at all considered as the legal practice. In terms of capitalism and economics, this procedure is considered as the unfair and deceptive practice on part of lenders and they can then use these unfair means for the unfair loan origination procedures.

Reports on predatory lending

Legally the procedure of predatory lending has not been defined properly. However the audit reports on the procedure of predatory lending have been issued from the office of inspector general in the United States. According to this definition, the predatory lending has been defined as the imposition of the unfair and abusive terms on loan borrower on part of the lender. In this way the borrowers are burdened by the illegal and unfair terms regarding the paying off the loans and debts.

Laws against predatory lending

There are many laws and practices which are brought into action in order to curb the predatory and abusive actions. In the same way the federal agencies are also working and performing activities on the issue of prevention of predatory lending. Most of the federal agencies have referred the phrase or term of catch all for the action against predatory lending. According to this term, a broad action is taken against all these activities regarding the specific forgeries and actions taken in the loan industry. However there is a sheer difference between predatory lending and predatory mortgage. This is defined as the unfair and illegal practices during the loan or mortgage proceeding and origination after the loan has been taken.

Lender’s activities in predatory lending

There are many contentious explanations regarding the activity of lenders in the phenomenon of predatory lending. Usually the lenders convince the borrower deceptively and make them agree upon the unfair and abusive terms of loan. Ultimately these terms become so much difficult for the borrower to follow and defend against their loans. Sometimes the payday loans are also referred to as the predatory lending. In addition to this, the lenders also offer the credit cards which also practice the predatory lending activities. There are many consumer debts and overdraft loans included in the predatory lending activity.