Sharks In the Water
Banks are not lending; why help common people when you can pocket the money and run? It may seem odd, but there is no legal definition of so-called predatory lending. Turn on the financial news — or skim the business section of any newspaper — and see how corrupted our financial institutions have become. Need a loan? Forget it.
There is overwhelming evidence to support the fact predatory lenders target racial minorities, the undereducated, and the elderly. Although primarily associated with home mortgages, predatory lending can include credit cards, and payday loans. A working definition of predatory lending is the practice of deceptively convincing borrowers to agree to unfair and abusive loan terms or systematically violating those terms in surreptitious ways.
Though one may think such lenders are fly-by-night companies, but ACORN successfully pressured HSBC Finance and H&R Block into stopping some of their predatory practices. The man who steals you house more often than not does not wear a mask, he wears a tie. Predatory lending is collateralized. That is, the loans use vehicles and homes as collateral. The Association of Community Organizations for Reform Now (ACORN) supplies ample evidence to suggest the lenders, again, target poor and minority families.
The National Home Equity Mortgage Association (NHEMA) claims the practice of financing subprime mortgages is often the only way some families can afford to own a home. Do not be fooled: what we call predatory, others euphemize as subprime. They claim the regulations targeted at predatory practices in effect restrict the ability of low-income families to move up the social ladder.
The predatory nature of subprime loans has not subsided. ACORN maintains African Americans and other minorities were, and still are, disproportionately targeted as they are burdened with significantly higher interest rates than their white counterparts, even when median income levels were comparable. The ramifications of predatory lending are families that are straddled with tremendous interest rates and significant debt. The end result seems to be foreclosure. Pursuing debt settlement and mortgage refinancing are viable defenses against the predators.