Predatory Lenders The Law And Economics Of Predatory...

Predatory lenders are organizations, which offer loans with high interest rates to those who are in need of fast money, usually because of an emergency. Engel Kathleen, and Patricia McCoy, in their paper â€Å"A tale of three markets: The law and economics of predatory lending† defined predatory lending as Any serious attempt to address the problem of predatory lending, however, must be able to describe it. â€Å"predatory lending generally has been described as a catalogue of onerous lending practices, which are often targeted at vulnerable populations and result in devastating personal losses, including bankruptcy, poverty, and foreclosure. † which essentially means that while the methods of predatory lending have changed over the years, the concept of predatory lending has remained the same. Predatory lenders used to be loan sharks, who would loan people money from the local mob, but now predatory lenders operate as payday loan offices, and Car Title loaners. These c ompanies utilize the niche market of people living in low-income areas, who are desperate for quick cash and have stable paying jobs, and a willingness to pay the flat fees associated with said loans. Loans such as Payday Loans and Car title loans operate by preying on those who have no other alternatives. Predatory lending practices have had a predominately negative effect on lower income communities, forcing many families living in these communities to go into deeper debt trying to pay off the initial loan, leadingShow MoreRelated Legislation and Predatory Lending in the Mortgage Industry Essay1898 Words   |  8 PagesLegislation and Predatory Lending in the Mortgage Industry The American Dream has been one of this nations most enduring ideals of the past half-century. Presumably, every young couple, low-income family, and incoming immigrant hopes to one day produce 1.7 kids, obtain 1.3 cars, and of course purchase the house with the white picket fence. 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