Predatory Practices

|

Predatory Practices |

|

|

|

|

Predatory business practices have lately become accepted by political parties. They are now seen as valid ways for creating revenues and satisfying investor’s needs and wants for profits. Examples of predatory business practices include marketing and selling unsafe products, making promises with no intention of keeping them. Results of these practices can include foreclosures and bankruptcies. But these predatory practices do not only affect consumers, they also affect businesses and the government. Smaller companies are not able to keep up with the larger, non-ethical companies who are putting forth false claims. In return, the government has to deal with the decreasing economy – using excess funds for fixing what has gone wrong instead of increasing areas that could use improvement. (Shepherd Law Group)

When speaking of predatory practices by businesses, the first thing that comes to my mind is the housing market. A few years back the housing market took a distinct plunge, which a lot of people claim is one of the main causes of the struggling United States economy. However, was the housing market plunge caused by buyers believing they could afford more than they could, or was it caused by the housing market pushing through with predatory practices? It could be either of the two. First, I am going to talk with the assumption that it was due to predatory business practices. Predatory lending is defined as “any unfair credit practice that harms the borrower and eventually affect the credit or ownership interest of the borrower” (Aurora Abella-Austriaco, 2006). A predatory loan is usually based on how much equity the borrower has in the property instead on how the borrower will be able to repay the loan. One of these predatory practices can be different lending techniques that were used by the mortgage companies, such as ballooned loans. Ballooned loans are defined as “a type of loan which does not...