A lender refinanced an elderly borrower as loan knowing the borrower had insufficient income to repay the loan. this is an example of predatory lending.
Predatory lending means the process of imposing deceptive, unfair or abusive loan terms on borrowers. In many cases, these loans carry a very high fees as well as the interest rates.
Predatory lenders generally use aggressive sales tactics and exploit lack of borrower's understanding of the financial transactions. Through fraudulent or deceptive actions and with a lack of transparency, they try to induce, and assist a borrower in taking out a loan which they will not be reasonably able to pay back to the lender.
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