Quote:
Originally Posted by disneysteve
That's a very good topic for this thread - predatory lending. It is perfectly legal, unfortunately, but is it a good honest business or does it take advantage of the poor and uneducated? Just because something is legal doesn't necessarily mean it is honest, or does it?
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Generally speaking I believe if something is legal, then it is possible to do it in an honest way.
In my opinion, predatory lending is a legal practice that was often executed with disregard to honesty. If a lender explained the types of loans, gave you multiple options, and you chose the risky one to get lower payments, that's your fault--the lender was honest about your options and consequences. If the lender forced you into a sub-prime 80/20 split with a 1/1 uncapped APM and acted like that was the "best" or "only" option, that is dishonest on the part of the lender.
The former happened to me when I refinanced a mortgage. Would my lender have given me the more risky loan if I wanted it? Sure. Was he being legal and honest? Absolutely--so honest in fact that he gave me an option that existed but was not the best idea. I wanted to know the options and he didn't omit anything at all, good or bad.